Asian-Americans Now the Most Economically Divided Group in the U.S.

While some groups have suffered more from the rising gap in income, the biggest rise in income inequality is among Asian-Americans. (Image:  pixabay /  CC0 1.0)
While some groups have suffered more from the rising gap in income, the biggest rise in income inequality is among Asian-Americans. (Image: pixabay / CC0 1.0)

It’s no secret that income inequality has been on the rise in the U.S. for decades. Since the 1970s, the middle class has been losing ground while the wealthier become better off. But while some groups have suffered more from the rising gap in income, the biggest rise in income inequality is among Asian-Americans — displacing African-Americans as the most economically divided racial or ethnic group in the U.S.

In fact, a study from the Pew Research Center entitled Income Inequality in the U.S. Is Rising Most Rapidly Among Asians has concluded that Asians experienced the greatest growth in income disparity between 1970 and 2016. The study noted that during that period:

Asian-Americans overall have the highest-earning racial and ethnic group in the U.S., but that’s not to say that all Asians are at that level of income. And during that period, lower-income Asians gained far less in income compared with their counterparts in other groups.

Chinese have been the group of asylum seekers in the United States for many years. (Image: pixabay / CC0 1.0)

Asians transformed from being one of the most equal to being the most unequal among America’s major racial and ethnic groups. (Image: pixabay / CC0 1.0)

How wide a gap?

According to the study, overall, the income gap between those with the most and the least income during the period increased 27 percent, with those near the top bringing in 8.7 times as much income as those near the bottom. In 2016, that amounted to US$109,578, compared with US$12,523. In 1970, Americans in the top range had 6.9 percent as much income as those near the bottom — US$63,512 compared with US$9,212.

But when it comes to racial and ethnic groups, Asians in the top income range had 10.7 times the income of Asians in the bottom range. Among African-Americans, those at the top had 9.8 times more than those at the bottom; among whites and also among Hispanics, those at the top made 7.8 times more than those at the bottom.

An increase in income inequality matters, the study noted:

People with less money also save less for retirement, and those at the low end of the pay spectrum are also less likely even to have access to a retirement plan in which to save — which means they will be suffering from their low economic status probably throughout retirement.

Rising inequality among Asians, the country’s fastest-growing minority, can be largely explained by immigration patterns and the diverse reasons immigrants from an array of Asian countries settle in the U.S. (Image: Pew Research Center)

Asians in the top income range had 10.7 times the income of Asians in the bottom range. (Image: Pew Research Center)

Add to that the effect on the overall economy because of lower consumption, excessive borrowing, and less investment in education and it becomes obvious that income inequality takes a toll on a wide range of activities throughout the population.

Who and when?

Immigrants, largely from China, India, Korea, the Philippines, and Vietnam, accounted for 81 percent of the growth in the Asian adult population between 1970 and 2016. Nearly 80 percent of Asian adults in 2016 were foreign-born, compared with 45 percent in 1970.

Asian immigration surged after the 1965 Immigration and Nationality Act, which favored family reunification. The end of the Vietnam War in 1975 brought a wave of refugees. One result, the report said, was that the share of new Asian immigrants working in higher-paid, high-skilled jobs dropped between 1970 and 1990.

A new wave of Asian immigrants came to the country after the 1990 Immigration Act that sought skilled workers during the tech boom. Many of the latest arrivals came from India, initially under the high-skilled H−1B visa program.

Still, researchers do not expect the gaping income divide among Asian Americans to last because of changing immigration patterns. As the U.S. becomes a more settled native-born Asian-American population, the rapid rise in inequality in this population may be a transitory story.

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