By Jun Li
A 2018 study conducted by Pew Research Center found that the largest wealth gap in America is among Asian Americans.
The study, which was led by senior researcher Rakesh Kochhar and former research analyst Anthony Cilluffo, analyzed changes in wealth for whites, blacks, Asians and Hispanics from 1970 to 2016, finding that the income gap among all Americans increased by 8.7 times since 1970.
Most notable, however, was the change in income among Asian Americans.
“From 1970 to 2016, the gap in the standard of living between Asians near the top and the bottom of the income ladder nearly doubled, and the distribution of income among Asians transformed from being one of the most equal to being the most unequal among America’s major racial and ethnic groups,” the study wrote.
“Asians displaced blacks as the most economically divided racial or ethnic group in the U.S.,” the study wrote. “While Asians overall rank as the highest earning racial and ethnic group in the U.S., it is not a status shared by all Asians: From 1970 to 2016, the gains in income for lower-income Asians trailed well behind the gains for their counterparts in other groups.”
One reason for this disparity, the study notes, could be because of the history of Asian immigration to the United States. This finding disrupts the popular “model minority” myth, wherein people believe all Asians are a homogenous, inherently successful group of people rather than economically and culturally diverse.
The Immigration and Nationality Act of 1965, as well as the end of the Vietnam War in 1975, both allowed for a “surge” of Asian immigrants to enter the country early on.
“One result was that the share of new Asian immigrants working in high-skill occupations decreased from 1970 to 1990, and the share working in low-skill occupations increased,” the study wrote.
The Immigration Act of 1990 brought new changes — it effectively shifted the demographics of Asian Americans to encapsulate primarily “skilled immigrants,” and, when combined with the H-1B visa program, allowed for highly-educated Asian American professionals to make a living in the U.S.
Despite this, the income gap between Asians still remained, mostly due to the fact that large disparities in education exist within different Asian ethnic groups.
The study provided an example of the educational disparity between Indians, Bhutanese, and Burmese — 72 percent of Indians age 25 and older have a bachelor’s degree, compared to only 9 percent of Bhutanese. Additionally, the median household income of Indian families was $100,000, whereas for Burmese, it was $36,000.
“This diversity in their origins and experiences is reflected in the relatively high level of income inequality among Asians,” the study wrote.
In terms of standard of living, Asians in the top income bracket “held the edge” over all other groups. In contrast, Asians in the lower income bracket “lagged behind” whites — Asians in this bracket lived on 17 percent less income than their white counterparts.
“The Asian experience is distinguished by sharp differences in the growth in incomes across the distribution,” the study wrote.
“The trend observed nationally repeated within each racial and ethnic group,” the study wrote. “The slowdown in income growth this century did not alter the general trajectory toward a rise in income inequality, however. Those at the top of the economic ladder fared better than those at the bottom through the economic slowdowns this century.”
To discover these trends in inequality, the study analyzed data from the American Community Survey, the U.S. Census Bureau, and the decennial census. They used two separate measurements for inequality, each of which showed Asians being at the highest levels of wealth inequality compared to other groups.
“Asians and blacks are more economically divided than whites and Hispanics and, in this respect, there is a meaningful degree of separation between these two pairs of racial and ethnic groups,” the study wrote.
The study also noted that Asians did not always have the “highest level” of income inequality. In 1970, wealth inequality for Asians was comparable to whites and lower than that of Hispanics and blacks.
“Inequality among Asians increased every decade since 1970,” the study wrote.
The reason for this change, as mentioned before, is due to shifting economic demographics of Asian Americans.
“The change in the economic profile of the Asian population in recent decades reflects the immigrant experience to a large degree,” the study wrote. “Overall, Asian immigrants have higher levels of education than native-born Americans … As a result, many Asian immigrants are settling in at the top of the income distribution and likely stretching its boundaries into higher reaches.”
Despite this trend, however, the study notes that other ethnic groups within the term “Asian American” haven’t experienced the same economic growth. For example, poverty rates were “35 percent among Burmese, 33 percent among Bhutanese and 28 percent among Hmong and Malaysians, compared with 15.1 percent in the U.S. overall.”
“The wide diversity in the education and income profiles of Asian origin groups is reflected in the relatively wide gap in their income distribution,” the study wrote.
The study thus disproves the model minority myth that Asian Americans are all wealthy and successful — many Asians who don’t fit into this conventional mold are frequently erased because so many hold this false belief.
Although Asians make up those with the highest gap in income inequality, the study notes that this is a problem that pervades among all racial and ethnic groups in America.
“The state of income inequality within racial and ethnic groups and the gaps in incomes across them provide complementary, yet distinct, insights into the well-being of these groups of Americans,” the study wrote. “The fact that inequality increased within each racial and ethnic group shows that no community was immune to the factors said to have raised U.S. inequality since 1970.”
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