Massachusetts families hold a median wealth of $370,000, yet more than a third can't afford a $400 emergency. How is Beacon Hill reacting to striking new data on the state's wealth gap?
A new Federal Reserve Bank of Boston survey shows median family wealth in the state is over $370,000. But buried in that headline is a staggering divide. More than a third of families don't have $400 in cash for an emergency. And for Black and Latino households, that jumps to nearly two-thirds. Reporter Alison Kuznitz of the State House News Service shares what stood out to her in this data.
Alison Kuznitz, SHNS: The data is really eye-popping when you look beyond that median number. The survey found that the 25th percentile of families are earning $10,000. That means a quarter of the Commonwealth's population are earning at or below $10,000. Meanwhile, the 75th percentile is over $1 million. That means a quarter of Bay Staters are earning above $1 million.
Carrie Healy, NEPM: Wow.
Alison Kuznitz, SHNS: Also, looking at how widely wealth can vary based on other factors in the study, whether it's educational attainment, where somebody lives, their age, or home ownership, for homeowners median family wealth is over $790,000. Meanwhile, for renters, their wealth is only $1,500.
State House leaders have talked about closing the racial wealth gap for years, given we already know these disparities existed. How are lawmakers responding to seeing it spelled out like this? Is anyone on Beacon Hill surprised?
It's honestly been very quiet on Beacon Hill following the end of formal scheduled sessions on July 31, but we have seen reaction pouring in. For example, the Massachusetts Budget and Policy Center pointed to the estate tax as a lever lawmakers could continue to use to handle how wealth and generational wealth is passed on. Lawmakers changed the estate tax several years ago and bumped up the threshold for when the estate tax would apply.
So, when we talk about shifting wealth metrics long term, what policy tools does the Legislature actually have right now? Are we seeing movement on housing, tax relief, or wage bills aimed at this?
Sure. Numerous housing policies are at play and under negotiation in an economic development bill. The Legislature is also very interested in accelerating and helping the adoption of commercial office buildings being converted into residential units. Also this November, voters will have a chance to vote on a ballot question that would legalize starter homes.
Looking ahead, lawmakers are facing economic uncertainty and potential Trump administration rollbacks to public health benefits. Does this new report create urgency for the fall, or does it just complicate an already tough budget picture?
I think it puts more pressure on the administration and the state overall to intervene. If we're seeing that families already are going to struggle to afford a $400 emergency expense, imagine what's going to happen when Bay Staters lose their health coverage, turn up in the hospital, and face a medical bill that's far higher than $400. That's going to put an incredible strain on the state's health safety net and will require some type of intervention.
