Soon Asian Americans Will Be The Richest In All The Land
Asian Americans are doing great, financially. For the last two decades, their median incomes have been greater than those of whites, and soon enough their median wealth will catch up and exceed that of whites as well.
Kent Brockman would say, “I for one welcome our new Asian American overlords.” But Kent Brockman tends to be too quick to overlook the continued effects of discrimination, perhaps especially for people of South Asian descent. It is still hard to be a person of color in this country, even if you have money in the bank. Speaking of which, “Asian American” is such a hugely broad descriptor, covering so many disparate kinds of people, that it seems amazing to me that Research can draw useful conclusions. But drawing conclusions, useful or not, is what Research is all about.
What does Research have to say this time? According to Pew:
Asian Americans are more satisfied than the general public with their lives, finances and the direction of the country, and they place a greater value on marriage, parenthood, hard work and career success. … Asian Americans stand out for their strong emphasis on family. They are more likely to be intermarried with other racial groups, their children are more likely to live in households with two married parents and they place a higher priority than the general public on having a successful marriage.
Wait, the general public doesn’t prioritize having a successful marriage or being a good parent?
The survey isn’t even asking is this the most important aspect of your life; it’s just saying, is being a good parent or maintaing your relationship one of the most important aspects of your life. Americans in general — despite the fact that we pay lip service to family values, at least during election years — say eh, not so much. Bizarre.
One of the other important things Asian Americans do that sets them on an upward trajectory is relatively simple: on average, they make better financial decisions.
Part of the explanation for the wealth disparity involves financial decision-making. African-Americans and Hispanics show less asset diversification, and they hold twice as much debt as their Asian-American and white counterparts. They appear to be borrowing at higher interest rates and investing in assets that have low returns, such as housing.
To evaluate financial decision-making, the authors of the Fed report looked at people’s savings rates, credit-card balances, debt-to-income ratios and missed payments over the course of a year. On these measures, which the researchers combined to produce a “financial health scorecard,” Asian-Americans and whites have been quite comparable since 1992 (with Asian-Americans doing better from 2007-2013)
It’s not merely an issue of education, either.
At every level of education, Asian-Americans show much better financial health …. Holding income constant, they have managed to do relatively well in both saving money and avoiding debt.
At least making better financial decisions is something everyone can learn, or try to learn, anyway. Which is kind of the whole point of the Billfold. Thanks, Mike Dang.
Related: This great #longread profile of Roy Choi, Korean-American food-truck king of Los Angeles.