Asset poverty is widespread but disproportionately affects families of color

A recently released study in the Journal of Marriage and Family documents racial-ethnic differences in “net-worth poverty” among households with children. Using consumer finance data from 1989 to 2019, the authors define net worth poverty as total household net worth, accounting for both assets and debt below 25 percent of the federal poverty line. This amounts to less than $6,500 in assets for a family of four in 2019. The authors note that asset poverty is much more prevalent than income poverty, affecting half of Hispanic families with children, 58 percent of Black families, and 23.5 percent of white families. While income poverty is important for meeting daily needs, the authors argue that asset poverty seriously limits families’ financial cushion for emergencies— like a pandemic—and their ability to invest in their children’s futures. #covid-19 #racialequity