The $8 figure that shamed Boston gets an update
Massachusetts has a major wealth gap problem. And as The Globe’s 2017 Spotlight series demonstrated, the divide is more pronounced along racial lines: White residents are generally much wealthier than their black and Latino neighbors.
That’s why it’s good news that the Federal Reserve Bank of Boston is partnering with local business groups and nonprofits to conduct a deeper study of the distribution of wealth in the state. . The goal is to get a more complete picture of economic inequality, its magnitude, causes and possible solutions.
The commendable effort is in its infancy. The project’s backers, including the Boston Foundation, Greater Boston Chamber of Commerce, Eastern Bank Foundation and Barr Foundation, are still $250,000 short of their $1.5 million budget goal. A polling firm will be hired over the next year to complete the research, and it will take about three years to get its first results.
But for this effort to be truly successful, it is crucial not only that the project take a broad look at all the factors that contribute to economic inequality – including those that form along racial, ethnic and geographic lines – but also to ensure that research continues at regular intervals so that the success, or failure, of efforts to close the wealth gap can be measured over time.
The effort comes seven years after a jaw-dropping Boston Fed Color of Wealth report found that the median net worth of a U.S.-born citizen Black Boston-area resident was just $8. It comes as other studies continue to identify deep economic divides in the Commonwealth.
A study by the Boston Foundation, released Thursday on the economic situation of Latinos in Bay State, is an example. It shows that more than 24 percent of Latinos in Massachusetts — about 1 in 4 — live in poverty. This is worse than the national average of about 20%. It also shows that about 18% of black residents in the state live in poverty, compared to less than 7% of white residents in Massachusetts.
This is despite the fact that poverty rates among Latinos have actually declined in the state and labor force participation and entrepreneurship have increased. The persistent wealth gap has only widened during the pandemic, in part due to the slow recovery in the leisure and hospitality sectors.
But the main drivers of the wealth gap are clear: exorbitant housing costs, which plague Latino and black residents outside of Boston, far from its better-paying job opportunities and superior social services. The further you travel from Route 128, the less your access to upward job mobility, non-profits, well-funded community organizations, and interpretive services. Massachusetts’ premier technology sector, medical resources, academic and scientific communities, and tourism industries are largely out of reach for those outside of Boston’s urban core. Yet increasingly, remote areas are where the state’s Latino communities and growing numbers of black residents are located, because that’s what they can afford.
And that’s exactly what we know from the data we have – which is incomplete.
The Boston Fed is off to a good start with the first phase of the new research project, which is already underway and is examining disparities in residents’ assets, such as homes and investments, and their debts, such as mortgages. and bank loans. But for the project to have real impact, it must also examine the lack of certain assets and debts. For example, black and brown residents are much less likely to have mortgages, although they still have the burden of paying high rents – something that may not appear as debt. And, as the Emancipator – a new publication produced jointly by the Globe and Boston University – described in a recent series on Due to the racial wealth gap, black and brown people are more likely to have high student debt, be directed to payday loans and other second-tier lending practices, and struggle to obtain business capital to start and grow businesses in their communities.
The troubling picture painted by the data we have underscores the need to know more. The new effort led by the Boston Fed could have real impact and serve as a national model – as long as it is thorough, sustainable and carefully designed to understand what the state’s most underserved residents need to succeed and prosper. Hopefully those leading this new charge won’t let these residents down.
Editorials represent the opinions of the Editorial Board of The Boston Globe. Follow us on Twitter at @GlobeOpinion.