For the last few days, I have written about the wealth gap, and how it changes based on educational attainment. The Federal Reserve Bank of St. Louis captures the data on the wealth gap for an annual report it produces. One other way the St. Louis Fed looks at the wealth gap is by race.
If you thought the educational attainment data were irritating, the race data is more so. According to the St. Louis Fed, Black households control about $0.25 of wealth for every dollar White households do. Hispanic households don’t fare much better. They control about $0.24 of wealth for every $1 of wealth that White households have.
In Q4 2022, the average wealth of a White household was $1.275M. For Black households, the average wealth was $319,000 and for Hispanic households, it was $306,000. That’s a colossal difference. Framed this way, it’s very easy to see why a community college degree doesn’t have much value for racial minorities.
The wealth gap is so great between White and minority households that a two-year degree simply provides no opportunity to amass wealth. If you remember back to my post from a couple of days ago regarding wealth and educational attainment, the household headed by someone with a high school diploma controlled about $0.24 for every $1 a person with a bachelor’s degree does. That is exactly the same amount of wealth that Hispanic households control.
So, you might say, “Well, maybe they’re predominantly high school graduates.” According to the Census Bureau in 2022, the percentage of Hispanic adults over the age of 25 who earned a bachelor’s degree was about 21%. The percentage of Black adults over the age of 25 with a bachelor’s degree was 27.6%. The percentage of White adults with a bachelor’s degree was 41.8%.
Community colleges could close wealth gap, but don’t
White adults earn bachelor’s degrees at twice the rate of Black and Hispanic adults, but control more than four times the wealth. There should be about twice as much additional wealth accumulation in Black and Hispanic households because of increased educational attainment, but that hasn’t happened.
It would be interesting to look at which WCC programs Black students enroll in and graduate from most frequently. I haven’t done the research yet, but I would not be surprised to see a high number of Black and Hispanic students finishing degree programs and non-degree certificates in programs with low earning potentials.
Were that the case, it would be yet another argument in favor of eliminating programs that train students for low-wage work. Once again, as a matter of public policy, we should not be providing “educational opportunities” that trap people in low-wage employment. Community colleges have the ability to lessen the wealth gap, so why do they continually work toward placing people into low-wage employment?
Photo Credit: COD Newsroom , via Flickr
