"As a starting point, there's a lot less money in the pockets and in the savings accounts of Black and Latino families," said Lindsay Daniels, associate director of the Wealth Building Initiative at the National Council of La Raza, a Latino-advocacy organization.
As Michael Madowitz, an economist with the Center for American Progress, said, "There are things you can do with wealth that you can't do with income."
With wealth, you can invest. If your income only supports your family paycheck-to-paycheck, that's not an option. Lose your job and you lose your income, but not necessarily your wealth. If you have money saved and invested, you're better equipped to handle a temporary loss of income because you have assets that can be liquidated or savings from which to draw.
It Starts With Financial Education
So one important question remains: Why is there less wealth among these families, particularly if the study looked specifically at college graduates?
Kids growing up in White and Asian families are more likely to have college-educated parents, who may be more likely to possess and transfer smart financial decision-making skills to their children.
While Emmons, one of the authors, said it's difficult to show "in a systematic way" exactly how much family wealth itself is a factor, he acknowledged that these families may pass on their "financial habits or awareness" to their kids. "There may be an argument that colleges should have simple financial literacy as part of the curriculum," Madowitz said.
Right now, we don't really talk to young people, at least formally, about putting money into things like a variable annuity or index fund, Madowitz added. Many people, he continued, focus on paying down their mortgage when it might make sense to take some of the money and invest it elsewhere.
Emmons disagrees. "I advise people, pay off your debt first," he said. Regardless, more financial education, like a college degree broadly, won't fix everything.
Citing Donald Trump, Madowitz said the real-estate mogul and presidential hopeful provides a "useful vignette" for looking at the issue. Sure, he deserves some credit for figuring out the real-estate game, but his father was also a real-estate developer and he grew up in the business.
Overcoming Inherent Bias
People who are the first in their families to graduate from college, particularly those from more of a "rags to riches" background, don't have the same leg up. Blatant discrimination and structural barriers also play a role and are also difficult to overcome.
"There's something going on with race, ethnicity, gender, and class. ... These are the secrets Americans like to keep from themselves." —Anthony Carnevale, director, Center on Education and the Workforce
Once things like type of degree, the school attended, and a host of other factors are accounted for, there remains a residual factor, Anthony Carnevale, director of Georgetown University's Center on Education and the Workforce, said, and it's tied to discrimination.