The model minority myth is ― well ― a myth, as a new study on wealth inequality among Asian-Americans shows.
The Center for American Progress (CAP), released a report last month, revealing that the wealth inequality among Asian-Americans has exceeded that among white Americans.
And while Asians are often seen as categorically financially well-off, that’s not always true. In fact, such a stereotype can be harmful to the community, the report notes.
“"Asian-American wealth has been trending up, catching up to wealth levels for whites on average. But many Asian Americans are left behind with no or very little wealth."”
“Asian-American wealth has been trending up, catching up to wealth levels for whites on average. But many Asian-Americans are left behind with no or very little wealth,” the report says. “The bottom line is that wealth inequality across American families deserves policy attention. This is especially true for Asian Americans in the bottom half of the income distribution. ”
Those in the 90th percentile of the minority group possess about 168 times the wealth of those in the 20th percentile. That ratio is much larger than that among whites, whose 90th percentile has about 121 times the wealth of those in the bottom 20 percent. Essentially, the richer Asians are more wealthy than the richer whites, but the poorer Asians are also less wealthy than the poorer whites.
While the research mentions that the average and median wealth of both groups are comparable, solely looking to at these measures can be “misleading.” And those Asian-Americans who are struggling economically aren’t reflected.
““By only looking at averages, you’re papering over the substantial struggles of a huge chunk of lower-income, less wealthy Asian Americans.””
“By only looking at averages, you’re papering over the substantial struggles of a huge chunk of lower-income, less wealthy Asian Americans,” Christian E. Weller, a senior fellow at CAP who penned the report with economist Jeffrey Thompson, told The Washington Post.
The report points to the more unequally distributed assets among Asian-Americans compared to whites as one reason for the minority’s larger wealth gap. The group has lower rates of homeownership than whites. And the homeownership gap was further widened by the Great Recession ― a crisis which appeared to affect Asian-Americans more than it did whites.
“Homeownership can contribute to more stable communities, better educational outcomes, and more civic engagement,” the report explains. “These factors together help create more wealth for homeowners, suggesting that lower homeownership rates can result in rising wealth inequality within certain communities.”
The group also trails behind whites when looking at retirement savings, the second most highly-held asset among U.S. households. This is attributed to the fact that Asian-Americans have fewer retirement benefits than whites as they’re less likely to have direct benefit pensions.
And when it comes to debt, Asian-Americans owe larger mortgages than whites. This is largely due to residing in higher cost-of-living regions, and it makes them more financially vulnerable and susceptible to foreclosure. The group also has faster rising student and car loans in relation to whites. Low-income Asian-Americans, the report says, are no exception and are finding themselves in more costly debt.
As the Washington Post points out, Asian-Americans constitute 5 percent to 6 percent of the population, making data on the minority group difficult to collect and these findings more suggestive than conclusive. But ultimately, the report does show that it does much more harm than good to examine Asian-Americans as a monolithic average. And those that do so are ignoring the groups that are most in need.
“It doesn’t really make sense to compare recent Chinese, Korean or Pakistani immigrants who are working in tech and engineering jobs to people who came as refugees in the 1980s and their working-class descendants,”Philip Cohen, a sociology professor at the University of Maryland, told The Washington Post.