|Overwhelming evidence indicates that growing up in a family whose income is below the poverty line can have profound impacts on children’s short- and long-term outcomes. Of critical importance for family and child well-being is also household assets, or wealth, as highlighted in the latest Dialogue on Racial/Ethnic Equity and Policy Proposals to Reduce Child Poverty convening.
The strengths and abilities children develop from infancy through adolescence are vital for their physical, emotional, and cognitive growth, helping them to achieve success in school and to become responsible, self-sufficient, and healthy adults. These form the foundation of a well-functioning and rich society, yet America’s future is not as secure as it could be because millions of children live in families with incomes at or below the poverty line.
A lack of adequate economic resources for families with children compromises these children’s ability to grow and achieve adult success, hurting them and society at large.
Income is what families typically use to meet their basic daily needs such as food, rent, and utilities. Assets provide a buffer that families can draw on when unexpected hardships – such as job loss or unanticipated medical expenses – occur.
Assets also make it possible for families to “invest” in ways that are likely to result in long-term financial security, such as supporting educational opportunities for their children or saving for retirement.
Although much of the research on racial disparities in wealth focuses on blacks and whites, a new body of work has found that Hispanics face similar disadvantages. In 2016, the typical Hispanic family had about $21,000 in net worth (assets minus debts), while the typical white family had $171,000 in net worth. Basically, a Hispanic family had about 12 cents of wealth for every dollar of wealth that a white family had.