But Asian Americans have tremendously divergent experiences. Some are upwardly mobile, but many others struggle with poverty. The differences are hard to see in the average numbers.
A new report from the Center for American Progress, a left-leaning think tank, highlights the problem with lumping Asian Americans together. According to economists Christian Weller and Jeffrey Thompson, Asian Americans are such an economically diverse group that wealth inequality is actually worse among Asian Americans than among white Americans.
The economists used hard-to-obtain government data to provide a clearer look at Asian American wealth. Census figures already show that income inequality is higher among Asian Americans. Indian American households, for example, earn nearly twice the national average, while Bangladeshi and Cambodian Americans have lower-than-average household incomes. Asian Americans earn more than whites on average, but they also have higher rates of poverty.
The new report suggests that for Asian Americans, wealth inequality is also more pronounced.
There are many ways to measure inequality — in this case, the economists compared different wealth thresholds. According to the data, white families in the top 10 percent each had more than $1.26 million in 2010-2013, while white families in the bottom 20 percent each had less than $10,468. In other words, a typical rich white family was about 120 times wealthier than a typical poor white family.
Among Asian Americans, the cutoff to make it into the top 10 percent was actually higher — about $1.44 million. And the families at the bottom end seemed to be worse off — the poorest 20 percent of families were each worth less than $9,319. So a rich Asian household was about 168 times richer than a poor Asian household.
Such disparities are completely invisible according to the usual way we consider racial differences, which focuses on averages, not levels of inequality. Asian American households and white American households in fact have about the same amount of mean wealth — about $680,000, according to CAP’s calculations. That creates the illusion that Asians are about as well off as whites. But as the report suggests, the richest Asian Americans are far more affluent than the poorest Asian Americans — so much so that they skew the data and obscure the problems of the people at the bottom.
“The communities that we know aren’t doing so well — people from countries like Vietnam, Laos, Cambodia — they make up close to 40 [percent] to 45 percent of the Asian American population,” said Weller, a professor of public policy at the University of Massachusetts at Boston and a senior fellow at CAP. “By only looking at averages, you’re papering over the substantial struggles of a huge chunk of lower-income, less wealthy Asian Americans.”
“The problem is that ‘Asian American’ doesn’t hold together as a category,” said Philip Cohen, a sociology professor at the University of Maryland. “The group is too diverse. 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.”
It’s hard to collect data on Asian Americans because they are still only about 5 percent to 6 percent of the population, so some parts of the CAP report should be taken with caution. The conclusions are based on national surveys conducted every three years by the Federal Reserve, each covering several thousand Americans, including a few hundred Asian Americans. The economists say that the recent differences in wealth inequality are large enough to be statistically significant at the 10 percent level. So this is suggestive, but not slam-dunk evidence.
The CAP report also contains some good news. In terms of mean wealth, Asian Americans seem to have more or less closed the gap with white Americans, largely because the richest Asians have become richer. In terms of median wealth, Asian Americans may have even surpassed white Americans in the years between 2001 and 2007. (These trends square with similar data from the Census Bureau, which has a much larger, but in some ways perhaps less accurate, survey on American wealth.)
The housing boom and bust explains a lot of the patterns in inequality. Homes tend to be the most expensive asset a family owns, and although the Asian American homeownership rate (about 60 percent) is lower than the white homeownership rate (about 74 percent), Asian Americans also tend to live in coastal metropolises where homes are expensive. In the early 2000s, the Asian Americans who were fortunate enough to own homes had their net worth skyrocket, increasing wealth inequality between Asian American homeowners and Asian American renters, as well as helping Asian Americans catch up to white Americans.
Another reason that Asian American wealth has been creeping upward is that the Asian American population is getting older on average. In 2015, the median age for Asian Americans was 36.3, up from 32.7 in 2000. (Whites, in contrast, are the oldest on average — their median age in 2015 was 43.) People in their 50s and 60s, of course, tend to be the wealthiest because they’ve been saving for retirement.
It’s important to keep all of these findings in perspective. Compared with whites and Asians, African Americans and Hispanics are much less wealthy, and they don’t seem to be making much progress. Data from the same survey shows that both groups have actually been losing ground relative to whites in recent years. Part of the problem is that these groups earn less on average. But they also seem to suffer from inferior opportunities.
“It appears that the returns that African Americans and Hispanics get on similar assets are lower,” said Ray Boshara, director of the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis. “So buying a home or pursuing an education does not yield the same amount of wealth.”
Taken in that light, the gains in wealth among Asian Americans seem all the more remarkable. As the CAP report shows, this is mostly a phenomenon of the richest Asians pulling away from the rest. Even so, hasn’t inequality been the story of the United States recently? In that sense, at least, Asian Americans really have been a model minority.