National Journal

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Debt is not all the same.

Debt goes beyond using your credit card too much and going deep into the red. People go into what they consider "good debt" to invest in their future, whether that comes from student loans or taking out a mortgage.

This is a widely held belief. A new survey from the Pew Charitable Trusts shows that 7-in-10 Americans think that debt is necessary for their lives. It makes sense, then, that 80 percent of those surveyed said they owed some type of debt.

But debt looks different between Americans who are white, black, and Latino. While the percentage of people who have debt is around the 80 percent mark for all three races, they differ in the amount of debt and type they hold. Whites have much more debt than their black and Latino counterparts.


(Pew Charitable Trusts)On average, whites have $41,500 in total debt, while African Americans have $18,950 and Latinos have $19,875. You can then draw a line directly from the higher levels of debt to the striking difference in wealth between races.

While African Americans have median total assets of $40,000 and Latinos around $80,000, whites have a walloping $275,000, according to the survey. Since whites on average make more money than blacks and Latinos, they also have greater access to debt and are able to build their wealth through buying homes and starting small businesses.

With greater access to wealth, whites have jumped far ahead of Latinos and African Americans in wealth. According to the survey, whites have a median total net worth of $159,400, while blacks have $6,000 and Latinos have $16,300. That gap is startling.

It's hard to overstate the importance of being able to accrue sustainable debt. It allows people to have greater access to investment, and could close the wealth gap between races.

This article is from the archive of our partner National Journal.

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