Alexia Fernández Campbell is a former staff writer at The Atlantic, where she covers immigration and business. She was previously a reporter at the South Florida Sun-Sentinel and the Spanish-language newspaper of The Palm Beach Post.
Two sociologists recently looked into whether the barriers facing people of color in the U.S. make it harder for most new arrivals to build wealth.
One hundred years ago, nearly all immigrants arriving to the United States were poor white Europeans. These newcomers from Ireland, Italy, and Eastern Europe were segregated into urban ghettos, living apart from the mostly Northern Europeans who arrived before them. Within a few generations, though, their families tended to build wealth and pull even with better-off segments of the population.
Now that the vast majority of immigrants are people of color from Asia and Latin America, will that pattern of wealth-building repeat itself?
There’s reason to think that might not be the case. After all, wealth inequality among Americans often comes down to race, with white families having the largest average net worth, followed by Asians, Latinos, and then African Americans. And more specifically, research has shown similar patterns of wealth inequality between native-born black and white Americans as black and white immigrants. Asian immigrants, on the other hand, are more likely to be nearly as affluent as white immigrants.
Recently, sociologists at the University of Wyoming and Brown University wondered if the barriers facing people of color in the United States also make it harder for immigrants of color to get ahead. Their research, published in June in the journal Sociological Perspectives, analyzed data from the New Immigrant Survey of 2003, which captured the experiences of more than 8,000 permanent residents who had been living in the United States for less than 10 years. Matthew Painter, the lead author of the study, and his colleague, Zhenchao Qian, looked closely at immigrants’ debts, homeownership rates, and investment portfolios to determine their net worth after having settled in the U.S. Their calculations showed that the average net worth for all new immigrants was about $63,000. As they expected, white immigrants had the highest average net worth ($92,965), followed by Asian immigrants ($83,500), then Latino immigrants ($40,073), and black immigrants ($34,318).
To see how much the wealth gaps were linked to an immigrant’s race, Painter adjusted for other factors that affect an immigrant’s wealth, such as how well someone speaks English, how long that person has lived in the United States, and whether they were educated in the United States. After removing the influence of these factors, Painter and Qian found that an immigrant’s race is strongly associated with their net worth. In fact, race alone cost Asian, black, and Latino immigrants an average of between $2,000 to $2,700 in net worth, compared to that of white immigrants with similar educational backgrounds, periods of residency, and fluency in English. When it comes to median net worth, as opposed to average, researchers found another pattern: Only white immigrants had a median net worth of more than $500; about 80 percent of all immigrants in the sample had almost no wealth (less than $500).
Though a couple thousand dollars may seem small, these gaps in wealth indicate that white immigrants, possibly because of their skin color, have an automatic advantage when moving to the United States, says Painter. “Our results show that white immigrants have made a more successful transition into U.S. society and begin to purchase assets and accumulate wealth,” he says.
Of course, Painter and Qian were not able to track these wealth-building processes precisely. Comparing net-worth figures to how much wealth immigrants had when they entered the U.S. is tricky, since the New Immigrant Survey does not indicate how much of it was acquired before immigrants moved to the United States, and how much wealth they built (or lost) after moving. “Ideally, we would survey them when they arrive at the airport, but that data doesn’t exist,” Painter says.
Also, it’s worth noting that the group studied does not represent a complete picture of immigrants in the United States, as they are all legal permanent residents with green cards. So this research does not examine the particular barriers faced by the estimated 11 million undocumented immigrants living in the United States.
Despite these limitations, Painter says that his research suggests that race alone may create economic barriers for new arrivals to the U.S. Black immigrants, for instance, likely experience the same obstacles to homeownership that black Americans face, such as discrimination in the real-estate market and getting less favorable mortgage loans. Latino immigrants may not have access to the same investment advice as white Americans, and may be, like Hispanics in general, less likely to invest in stocks, bonds, and mutual funds. Many American immigrants imagine their new country to be a land of opportunity, but those opportunities, it seems, are not available to everyone equally.
This post originally appeared on The Atlantic.
This article is part of The Atlantic’s Next America: Communities project, which is supported by a grant from Emerson Collective.