MS. SUSAN PAGEThanks for joining us. I'm Susan Page of USA Today, sitting in for Diane Rehm. She's on vacation. The recession called household wealth to drop across the board in the last few years. But it took an especially sharp decline for African-Americans and Hispanics. A new study from the Pew Research Center finds that declines in wealth have led to the widest disparities between whites and minorities in a generation.

MS. SUSAN PAGEJoining me to discuss what's behind the wealth gap, Paul Taylor, executive vice president of the Pew Research Center and a co-author of the report, Gary Burtless of the Brookings Institution and Roderick Harrison, a professor of sociology at Howard University. Welcome to "The Diane Rehm Show."

MR. PAUL TAYLORGood morning.

MR. GARY BURTLESSNice to be here.

PROF. RODERICK HARRISONGood morning.

PAGEWe invite our listeners to join our conversation. You can call our toll-free number, 1-800-433-8850. Send us an email at drshow@wamu.org, or find us on Facebook or Twitter. Well, Paul Taylor, this study looks not at employment or incomes and things that are pretty familiar, but at wealth. So tell us, what do you mean by wealth? And why is it important to look at that?

TAYLORSure. Wealth is all of a household's assets minus all of its debts. For most households, the biggest asset they have is their -- the home itself. It's the car. It's a savings account if you have one. It's a 401 (k) if you have one, et cetera. So you add all that up, and then you subtract from that all your debts, which is typically a home mortgage, a car loan, a student loan, a credit card debt, et cetera.

TAYLORAnd that's the net. It is a -- you're absolutely right that is a less well-known number to the American public. As we've been watching the economic difficulties of the last couple of years, we've all obviously paid a lot of attention to the unemployment rate, to income levels, which have been stagnant, to foreclosures, you know, one of the fallouts from the housing market decline. Wealth is difficult to get at.

TAYLORThe Census Bureau has a couple of instruments that asked about wealth, going to great detail and give you a very careful accounting of wealth so much so that you can make comparisons by race and ethnicity. They only do those, you know, those surveys periodically. And we were able to look at the most recent survey, which they did in 2009. So that was sort of at the official end of the Great Recession.

TAYLORWe've had two years of sort of a sluggish recovery since then. And it gave us the first direct snapshot not only of where different racial and ethnic groups stood vis-à-vis each other in 2009, but then we were able to compare it with a similar survey they took in 2005 to do a little bit of a before-and-after picture of what happened during that recession.

PAGEAnd, Roderick Harrison, I know that you were a former chief of racial statistics at the Census Bureau, so you're...

HARRISONYes.

PAGE...very familiar at looking these kind of numbers. What strikes you about this, this trend that Pew identified?

HARRISONWell, it's dramatic. You've had a 66 percent drop in Hispanic net worth, 50 percent drop in Asian and in black net worth. You never see things cut by half or two-thirds. The white loss was 16 percent. So these losses were considerably higher in the minority populations than in the white population. And it does -- particularly the black and Hispanic numbers. The wealth in -- as far as wealth is concerned, perhaps not on other indicators, it says two societies separate (word?).

PAGEGary Burtless, is it important to look at wealth, or are we better off trying to think about things like employment and income?

BURTLESSWell, I think the reason we think about the distribution of income and wages more frequently is because it's with those resources that people pay their day-to-day bills. But there is no doubt that wealth is very important. Because when you can't pay your bills with your wages and your other income, the wealth that you have is what you fall back on to pay those bills in tough times.

BURTLESSAnd so these drops in the wealth of people in the exact middle of the distribution, especially in racial minority communities, is very alarming for their capacity to deal with the setback of this recession.

PAGEAnd before the recession, Paul, was this gap getting narrower? What was happening before we saw the Great Recession hit?

TAYLORYeah, the census collection -- the census survey that looks at wealth has been around since the mid-'80s. And we're able to do an historic trend. And there were -- there have always been significant gaps by race and ethnicity in household wealth. The gaps were on the order of magnitude throughout the '80s and '90s and early 200 -- 2000s of about 10-1.

TAYLORFrom 2005 to 2009, those gaps spiked up to 20-1 in terms of whites to blacks and 18-1, whites to Hispanics -- never seen gaps of this level. Just to give you some numbers that make it a little more real, according to these surveys, the typical white household in this country has about $113,000 in accumulated wealth, net wealth, all assets minus all liabilities.

TAYLORThe typical Hispanic household has just over $6,000, and the typical black household just under $6,000. So these are enormous gaps. And on a ratio, they're far and away the biggest we've ever seen.

PAGESo, Roderick Harrison, we've seen, really, a generation of closing that gap wiped out?

HARRISONWe've seen much greater success in closing income gaps than wealth gaps, in part, because wealth is cumulative. And of the 10-1 ratio for blacks had held fairly steady for two or three decades now, ever since the survey of income and program participation, the survey that Paul mentioned, has been available to measure this. So what you're seeing is something that had not changed dramatically over decades, now just explode -- implode, really.

HARRISONAnd we might have expected what's predictable, that you would have losses of net worth of wealth given the recession. But what's dramatic about these numbers is how hard it's hit the minority communities.

PAGEAnd, Gary Burtless, why has it disproportionally (sic) affected African-American and Hispanic families?

BURTLESSWell, the Pew report is very good on outlining the reasons, the special factors that affect the Hispanic families. They are located in parts of the country disproportionately where house prices took a huge hit and...

PAGELike California, Arizona, Florida...

BURTLESSNevada, Florida.

PAGEYes.

BURTLESSAnd a lot of the net worth of American families right in the middle of the wealth distribution is in their home. They don't have other financial assets that add greatly to this. And a lot of the net worth losses that are documented in this report are in your -- the net worth that you have in your home. And so if you're disproportionately in those parts of the country that had jumping house prices and then deep falls in house prices, for middle-income families, that's going to be a heck of a hit.

PAGEPaul.

TAYLORYeah, I think that's right. What we document is sort of a double whammy for minority households. On the one hand, minority households are much less likely than white households to have financial assets: stocks, mutual funds, 401 (k) accounts. So a much -- what wealth they have -- and remember, even when this show began, they were at 10-1, so they started with a low base of wealth.

TAYLORAnd what wealth they had was disproportionately tied up in the value of their homes. So a hit to the housing, which affected almost all Americans, some worse than others, depending on where they might have lived, is going to take a bigger bite on minority households than it will on white households. And that was the case in these last several years.

PAGEYou know, you also mentioned in the report that Hispanics are disproportionately employed in the construction industry, which we know has taken a terrible hit in this economy.

TAYLORYeah, that adds an almost a kind of a poignant element. If you think about the immigration wave that's going on in this country led by Hispanics to some -- Asians as well over the last number of decades, what you see in Hispanics who come to this country is, like all immigrant groups, they are attracted to areas of economic activity.

TAYLORAnd in the '90s and early 2000s, those hot economies -- part of the heat in those economies was a lot of housing construction. And a lot Hispanics, you know, were literally building those homes. And in many cases, or in some cases, surely, they were then buying those homes. We had a national policy starting in the 1990s to encourage and to expand homeownership. It was thought to be good for the economy.

TAYLORIt was thought to be good for the social fabric. It became easier to purchase those homes. We now know after the ugliness of the collapse that, you know, there were plenty of first-time homebuyers who perhaps shouldn't have been. There were plenty of predatory lending practices. So, again, that big housing market collapse has obviously had profound consequences on individuals, on financial markets and everything else.

TAYLORBut disproportionately, you know, there's a sense of an immigrant group reaching for the economic opportunity, finding it, finding a job, reaching for that first house and then having their financial lives cave in on them. And that's a pretty hard bill for a lot of people as well.

PAGEYou know, we talk about the American Dream. And the idea of the American Dream, you can work hard and get ahead. Your children can have a better life than you have had. I wonder, Roderick Harrison, if you think that this means that we have a kind of reverse of the American Dream for a lot of these families, especially African-American and Hispanic families, in the idea of whether this American Dream is going to be achievable for them and their kids.

HARRISONMost definitely. I mean, going back to one of your earlier questions about the importance of wealth, these people draw on their assets. They draw on home equity often to help finance their children's education, help with tuition, some to help with perhaps a down payment on the purchase of a first home. And what we're seeing in these numbers is that the ability of black and Hispanic households to contribute has been decimated.

HARRISONSo it's -- this will play out not only until we see, which, I think, will take a long time -- the wealth net worth of these families rising back to the levels from which it fell in 2005 will play out in the life of their children.

PAGEWe're going to take a very short break. And when we come back, we'll go to the phones. We'll take some of your calls and questions. You can send us an email, too, at drshow@wamu.org. We're going to talk about whether this is a trend that could be curtailed when the economy gets better or whether it portend something that's going to be a little longer term. Stay with us.

PAGEWelcome back. I'm Susan Page of USA Today, sitting in for Diane Rehm. And with me in the studio this hour, Gary Burtless, he's a senior fellow in economic studies at the Brookings Institution. And Roderick Harrison, a professor of sociology at Howard University, he's also a senior research fellow at the Joint Center for Political and Economic Studies.

PAGEAnd Paul Taylor, he's executive vice president of the Pew Research Center and a co-author of the report on Americans' wealth that we're talking about this hour. So, Paul, looking at this study, which showed this growing disparity in wealth by racial and ethnic groups, is this something that's just a result of the terrible recession we've gone through? Or is this something that's going to persist even if the -- if and when the economy gets better?

TAYLORWell, I'm not going to predict the future. But what I can do is put these disparities, perhaps, in a little more context. We have seen, over the last couple of decades, an increasing disparity in income by social class, by -- when you measure income, it is clear, over the last several decades, the rich have gotten richer. The top 10 percent have pulled away from the bottom 90. The top one have pulled away from the top 10.

TAYLORThe top one-tenth of one has pulled away, et cetera, et cetera. You see the identical pattern on these wealth measures. Indeed, the disparities in wealth have not only increased in this five-year period that we looked at between racial and ethnic groups, they actually increased within every racial and ethnic group.

TAYLORBy that, I mean the share of the wealth among Hispanics, for example, held by the top 10 percent, rose during this four-year period, similarly for blacks, similarly for whites, similarly for the country as a whole. So we are in a pattern both with income and wealth. And, I guess, I should add, in this four-year period, which covered the housing meltdown, the financial meltdown and the steep unemployment spike, it's not necessarily that the rich got richer.

TAYLORIt's just that, proportionately, they lost less, you know, than the bottom 90 percent. That's been -- these are long-term trends, and I don't know -- I'm not smart enough to know what or when they will stop.

PAGEIs it a worrisome thing, Gary, do you think, for our society, our democracy, this trend, this growing disparity? Or is it just a consequence of a free market economy that does not -- that we shouldn't be alarmed about?

BURTLESSWell, one thing to bear in mind is that even a lot of the immigrants on the bottom who've suffered badly from their -- from the recession, most of them are probably better off in the United States compared with the countries they come from. So there is some sense in which the absolute standard of living at the bottom has not deteriorated nearly as much as the rise in inequality would suggest.

BURTLESSBut I do worry about the political consequences of this kind of rise in inequality because I do think wealth comes associated with a lot more political influence, even in a democracy. And that political influence pushes the government toward adopting policies that are even more favorable to the people who are very, very well-off.

PAGERoderick, what do you think about this? Is this something that you think is of concern? I know I sent out a tweet before the show, saying I was going to be guest-hosting. And I got some replies, saying this isn't a bad thing. This is a good thing. This is a spur to achievement, the ability to achieve great wealth in America.

HARRISONIt perhaps is, but it also comes at a cost. There's several things to be worried about. One of the underreported statistics in this very rich report is that a third of black and Hispanic households -- 31 percent of Hispanic, 35 of black -- have no net worth whatsoever or negative. So these are families, households that are under water, have nothing to fall back on. The second is that we've historically thought of ourselves as a land of opportunity.

HARRISONOur wealth inequalities are now larger than the inequalities in several European countries that we have thought of as class-ridden. And the implication of that is very important. Our intergenerational mobility in wealth and in income brackets is now lower, also, than several European countries.

HARRISONAnd what that means is that Europe is now more efficiently finding and allowing to rise talent that is born in the lowest income quartiles than we are. That was our -- one of our great strengths. And that's part of what made America, over the decades, the strongest economy on the globe. We're now losing that competitive advantage.

PAGEAll right. Let's go to the phones and let some of our listeners join this conversation. Dewey is calling us from Louisville, Ky. Dewey, thanks for joining us.

DEWEYHi. Thank you, Susan. I had a quick question. A very good program, excellent program this morning. But one of the questions I had was I wish your panelists would address why this income -- I'm sorry, excuse me -- why this wealth disparity happens to be so great. I mean, to me, it's actually amazing that Hispanics have more wealth than African-Americans.

DEWEYAnd so -- and then the white wealth, as it relates to Hispanics and blacks, is just -- I mean, that's just a phenomenal gap. And I was hoping your panelists would address, historically, why this has been the case.

PAGEAll right, Dewey. Thanks very much for your call. Paul?

TAYLORIt's a good question. I'm not sure I have a full answer, but, touching on some themes that we've already discussed, wealth is an accumulation. And the income gaps in this country by race and ethnicity are considerable. But they're not nearly of the order of magnitude of the gaps we're talking about now. But if you have an income gap, if you -- we're going now group to group rather than individual to individual.

TAYLORSo if, year after year, the typical white household has 1.7, 1.8, you know, 1.8-1, the income, 80 percent more income than the typical black household -- and those ratios have been pretty similar, and the same is true of white to Hispanic -- year after year, that will tend to widen the accumulated wealth or the negative wealth that people have.

TAYLORIf you have a little bit more and you have enough to sock a little bit away, to buy a better house, to put some into your 401 (k), and year after year you're going to build up a bigger nest egg, similarly, if you don't have that much to start with and you're hit with unexpected expenses -- if you lose a job, if you have an illness, you have the kind of setbacks that most people experience at some point in their lives and you don't have any wealth to fall back on -- you get in a hole.

TAYLORAnd then you start borrowing. And then you have to pay the interest on the borrowing. And all these things tend to reinforce themselves, and then you just blow that up not just to an individual, but to an entire group. And you see these very stark patterns.

PAGEDewey, thanks very much for giving us a call. Let's go to Detroit and talk to Daryl. Daryl, hi, you're on the air.

DARYLHow are you doing? Thanks for having me.

PAGESure.

DARYLMy only question is -- it's not really a question, but most of my friends that are black and Mexican don't understand the market, don't trust 401 (k), don't understand how it would be advantageous for them to invest in their company. And that, to me, is the reason why you have such great disparity in wealth right now.

PAGEWell, Daryl, that's an interesting point 'cause, of course, the stock market has been doing pretty well, so people with stocks have seen, after some problems with the stock market, stock market going back up, unlike the housing market. So, Roderick, do you think that it -- do you think that Daryl has a point, that African-Americans, Hispanics should be investing more in the stock market, should be thinking about that?

HARRISONI think the larger factor is first, as Paul just mentioned, having money to invest anywhere, whether it is in a home or in stocks. People do tend to invest first in the home. One asset that contributes things is automobiles that many people need to own. But then, yes, it's like you graduate from that to the stock market if you have disposable income beyond that to invest. And I think, at that point, it perhaps is true.

HARRISONBut I would also -- a lot of money from foundations, government agencies has gone into financial education over the past two decades. It's been emphasized as, I think, more than some other issues that need to be addressed around employment and regular income. But it is certainly something that policymakers, foundations have tried to pay a lot of attention to, the ownership society, really going back to Reagan.

HARRISONAnd it's one of the more compatible programs in a conservative political environment that you talk about ownership and wealth. And so there's been a great deal of that.

TAYLORSusan, can I just add a couple of statistics to answer the caller's question? Yeah, we have numbers on this. In 2009, 27 percent of white households had -- owned stocks from a mutual fund. This is apart from what they might have in their 401 (k) s and retirement accounts. So 27 percent of white households versus 5 percent of Hispanic households and 7 percent of black households, so there's a big disparity.

TAYLORBut there's another set of data there that go to this question of the role that wealth plays in people's lives. If you look at those white households in that four-year period that owned stocks and you look at what happened to their stock portfolios in that four-year period, they went down by about 12 percent, which is almost exactly what happened to the S&P or the Dow during that period.

TAYLORIf you look at that very small share of black households and what happened to their stock portfolios in that same four-year period, they went down by 71 percent. And you say to yourself, my goodness. Are they stuck with the world's worst stockbrokers or whatever? No. What they are is living life very much at the margins.

TAYLORAnd when bad times hit and when they're in -- when they lose a job or in danger of losing a home or in danger of foreclosure, they are obviously having to liquidate those assets at much, much higher rates. So it's not necessarily that the stock itself went down. It's that they had to sell the stock because they had to make ends meet, and they had to pay the rent.

PAGEWell, Gary, we know that the recession's had a big effect and some -- there are some reasons why Hispanics, for instance, disproportionately affected by that. Are there government policies that have also been at work that have made this wealth gap either grow or kept it from growing more than it might otherwise have done so?

BURTLESSWell, the things that the government does to boost the incomes of lower income people have somewhat offsetting effects. On the one hand, they certainly make it more feasible for people to save because, for some lower middle income families, their incomes are higher by virtue of things like the earned income tax credit and other supplements to income of working families.

BURTLESSBut, on the other hand, programs that protect you against destitution when you're very poor also reduce the need to have as high a saving rate when you are employed and you are enjoying reasonable prosperity. So, yes, the government has certainly tried to encourage homeownership, which is, as I said, for middle income families, the primary form of savings that they accumulate, that they have.

BURTLESSAnd the government, by encouraging that, unfortunately, also encouraged people to buy an asset that was overpriced in the middle of the last decade and whose price fell a lot. And those people have seen a tremendous erosion in their net worth.

PAGEI'm Susan Page. And you're listening to "The Diane Rehm Show." We're taking your calls, 1-800-433-8850. Roderick Harrison, what do you think about that?

HARRISONWell, in the context of the current deficit talks, the Bush tax cuts to Obama's and the Democratic desire to eliminate those cuts for those over $250,000, clearly, those -- that tax policy has favored the wealthy. And if you're talking about policies that would try to reduce this gap, the last thing you would want to do would be have tax breaks at that bracket.

HARRISONBut I think the wider context is to an extent far greater than most European and other industrialized countries. We do rely on market forces, and we allow whatever the outcomes are. And I think we're seeing outcomes that are leading to more rapid increases in wealth and equality in the United States than elsewhere.

PAGELet's go to John. He's calling us from Columbia, Md. John, you're on "The Diane Rehm Show."

JOHNThank you for taking my call. Your panel keeps mentioning a house as an asset. And my question revolves around when -- if I buy a house, if I buy it today, I owe a lot of money to the bank as in a mortgage. To me, that's not an asset. That is a debt that I must pay. And in the same way -- you haven't been mentioning cars very much, but I did hear it once that that is part of a person's wealth. If they own a car, that's a person's -- part of their wealth.

JOHNIf I buy a car today, I -- and I buy -- and I pay for it in five years, in five years, it's almost worth nothing, on top of which it cost me insurance and gas and maintenance. So, to me, a home or a house, unless one wants just to live there -- but as far as wealth, building wealth, one doesn't buy a house to build wealth. One doesn't buy a car to build wealth. Those are actually debts. And until that house is paid for, that's not part of wealth.

JOHNIt seems to me that there's a disparity on how people or at least how I count my wealth and how your panel and possibly other people calculate their wealth. I'll take my answer off the air. Thank you.

PAGEAll right, John. Thanks so much for your call. Gary Burtless.

BURTLESSWell, when you first buy your house, if you take out a very large mortgage, you're exactly right. There isn't any net worth there. If you take out a mortgage that's equal to the value of the house or even within 5 percent of the value of the house, you don't have much of an asset. But, gradually, as you pay down the mortgage, you are, after all, getting the benefit of living in a place without paying rent on it because you are the owner of that place.

BURTLESSAnd you are deriving really important advantages. And then, of course, you can sell the house and make net the difference between what you get in as a sale price and what you still owe on your mortgage.

TAYLORAnd, Susan, just to make it clear, the way the Census Bureau collects these data, they ask people to value their house. If my house is worth $100,000 in the market, someone would tell them, well, how much of a mortgage do you have on that house? Well, I have $90,000 mortgage on the house. That means that house has a net value, the way Census counts, of $10,000, not $100,000.

TAYLORNow, we know that a lot of people in this country have a mortgage now that they are "underwater." Their mortgage exceeds the market value of their house. This is something new in this country. We had a 10-, 20-year ride with housing prices that in retrospect it looks like that -- well, we know it was a bubble. But, boy, you would buy your house and the market would go up, and you felt richer. And the whole country felt richer.

TAYLORIt's one of the things that got us all into trouble, that we took out second mortgages on this paper wealth. We bought a lot of things. We spent beyond our means, and we all had a pretty big sobering up. But -- and now, for the first time, I think a lot of people are not thinking that houses automatically go up forever. But, boy, for a lot of the last generation or two, that was the absolute anchor of people's financial lives.

PAGEPaul Taylor, he is executive vice president of the Pew Research Center. We're also joined this hour by Gary Burtless from the Brookings Institution and Roderick Harrison from Howard University. We're going to take another short break. We'll come back. We'll go to the phones. We'll read some of your emails. Stay with us.

PAGEWe've got a couple emails along this line. This one is from Mark. He writes us, "I'm curious to know the percentage of white people with the most wealth and how they impact the wealth gap on behalf of white people as a whole. I assume that most of the incredibly wealthy are indeed white people, and that most white people don't have 20 times the wealth of the average black person or Hispanic family." Another emailer, Bill, writes along a similar aspect.

PAGEHe says, "Well, it's very easy to agree there's a wealth in income gap. The average and the median are very different. How do we get to these conclusions? All the ultra-rich white executives will change the averages of whites, but won't necessarily change the median numbers for whites." Paul, could you address this issue?

TAYLORYeah, well, it's a very good question, and it's one that statisticians think about all the time. What's the most appropriate way, the most descriptive way to describe disparities or make comparisons? In this report, we use medians rather than means. Medians is the middle point of a group, the point at which half the group has more of something, half the group has less of something.

TAYLORSo it gets you the picture of the typical person within that group. If you were to go with the mean or average, in the case of measuring wealth, that average would be very much influenced by the extraordinary wealth that a very small number of people have. So we believe that in -- for this kind of comparison, it's the median that is the most descriptive.

TAYLORAnd when we say there is a 20-1 wealth gap between median white household wealth and median black household wealth, what we are saying is that white household in the middle, that white household -- half of all whites have more wealth than that household, and half of all whites have less. That middle point for whites is $113,000 and for blacks, it's about $5,600. So that's the nature of the gap.

HARRISONBut the point is well-taken. There's some -- there are some excellent tables in the report. The top 10 percent of whites own about 56 percent of all white wealth. I think the top 10 percent of blacks, it's 72, or that's Hispanics, and 66 for Hispanics. So in -- within each group -- and getting back to the point that the gaps are growing across wealth levels, not just across racial line, the caller is exactly right.

HARRISONIf you start looking at the wealth of whites in the bottom 20 percent, these are also people who have very little to fall back on, more as you move into the second quintile and the third. But, clearly, there are blacks in the top 10 percent who would have more wealth than whites in the bottom, the second, even the third quintile.

PAGEHere's a related email from Jason, who says he's living right now in far East Tennessee. He says, "The people I know and meet are, for the most part, white like myself, and I see plenty of them struggling and failing. I, myself, have not been doing very well. No one is. The better question would be to focus on the disproportionate ratio of the very wealthy to the low income and poor."

PAGEBut I wonder, is there a reason also to look at this along racial and ethnic lines, Gary, do you think?

BURTLESSWell, I think that that writer is correct in the following respect. If we looked at white Americans and -- who have the same incomes and family circumstances as Hispanics or as black Americans, you would see the same tremendous drop in wealth. And that's because, like their counterparts who are Hispanic or African-American, much of their wealth is tied up in their house, and they would have suffered from the sharp drop at house prices.

BURTLESSNow, white Americans are not distributed around the country in the same way Hispanic Americans are, for example. And so, as this report documents, the really sharp fall in house prices did take place in areas where Hispanic Americans are concentrated. So the white population hasn't suffered quite so much.

BURTLESSBut, nonetheless, if you look at people like these Eastern Tennessee folks, they would not have that different a distribution of wealth compared with a lot of racial minorities who also have low incomes.

HARRISONAnother -- I think the caller's point is very astute. Most of the coverage of this report has emphasized the racial divide. But, again, if we go back to the point that the inequality has increased in wealth in the total population and within each race group, it does mean that within each group and across the entire American population, the divide between the wealthier and the less wealthy, the poor, as measured by wealth, is increasing.

HARRISONWe've historically seen ourselves as a society stratified by race and ethnicity, less by class, particularly when we compare ourselves with Europe and the European heritage. Again, the data are suggesting that class inequalities are increasing and they are now larger than many (word?) European countries.

PAGELet's go back to the phones and talk to Dorothy. She's calling us from Clearwater, Fla. Dorothy, hi. You're on the air.

DOROTHYHi. Thank you for taking my call. I was just wondering if instead of just comparing the skin color of people and the wealth distribution, whether this study or these experts think one also ought to consider what the educational levels are of those homes, whether the families are intact, whether single women are struggling to raise their children alone.

DOROTHYI mean, these are social factors that I would like to think are at least as important as the color of skin. And I'd like to hear what your experts have to say.

PAGEYeah, Dorothy, what a smart question. Paul, what do you think?

TAYLORIt's a great question. And we want to go back into these data and ask the data -- the very questions you posed. In fact, we've already begun to do that. We'll certainly do it by education. And I don't think we'll be surprised by the results that people with more education have, you know, have more income and they have more wealth. And there's a fairly linear relationship there. We also have taken a very preliminary look at marital status.

TAYLORWe are in an era where marriage is receding as an institution. Forty years ago, 72 percent of all adults in this country were married. Today, 52 percent of all adults in this country are married. So that's a profound sociological and cultural change that we're right in the middle of. But then when you start to deconstruct that change a little bit, by income and wealth, what you see is that the gaps between the married and the unmarried are getting wider and wider.

TAYLORWe did a report a year or so ago that documented the income gaps between the married and the unmarried. We will put out a report documenting the wealth gaps. And, by and large, married people have a much better economic life than unmarried people.

PAGEWe're in the middle of this fierce debate in Washington over raising the debt ceiling and cutting the -- for trying to curb federal spending to try to address people's concern about the debt. And I wonder, Gary Burtless, do you think this will have an impact on this kind of slice of the American economy on wealth and its disparity?

BURTLESSI think that there is evidence that, over the long haul, the way we structure the tax system and the government benefit system does have an influence on incomes at the very top and wealth at the very top. Over the last 15 years, almost all of the rise in inequality of the United States has not been between poor people and middle class people. It has been between the bottom 90 percent of the population and the very top of the income distribution.

BURTLESSAnd it is very hard to avoid the conclusion, looking at the history of the tax system of the United States, that it made a very big difference on income inequality at any way when the top tax rate was much, much higher than it is. I mean, there was a lot less inequality when the top tax rate was 70 percent or before President Kennedy, 91 percent, compared with what it has been since the early 1980s.

BURTLESSThere's almost a 1-1 relationship as the top tax, as the progressivity (sic) of the income tax system declined. After the election of President Reagan, the wealth gap and the income gap in the United States has soared.

PAGEAnd yet we've seen how difficult it is to have even a modest increase in the top tax rate these days.

BURTLESSYes. Well, that is what I said earlier when you asked whether I was worried about the long-term implications. And I said I do worry about the implication in that rising inequality can't feed on itself through the political channel. As wealthy people have more influence politically, it makes the government band more toward their interest compared to the interest of the broad middle.

PAGEAnd, Paul, of course, another aspect of these debt talks is trying to curb the growing cost of Medicare, perhaps trying to address Social Security. What could be the impact of steps like that?

TAYLORWell, it's a great question. I mean, the biggest thing, domestically, that this country did in the 20th century was build a public safety net led by programs for older folks, Social Security and Medicare, based on the notion that we want to make sure there's a floor through which people, in their older years, will not fall. Social Security is never meant to provide all your income.

TAYLORBut it was meant to provide enough of the floor to supplement, you hoped, the accumulated savings that you could bring with you into your own retirement. Well, again, with this pretty dramatic picture suggesting such a large share of the population -- and, particularly, minority communities don't have those accumulated savings -- it will put more pressure, I think, on the political spokespeople for those communities to say, we need to protect Social Security.

TAYLORWe need to protect Medicare and Medicaid. And then, of course, the other side will say, but we can't afford it. And we have a demographic challenge, and we all know that the baby boom generation is crossing the threshold of 65, putting enormous pressures on these programs. We see it in Europe, which has a more advanced social safety net, and we see that, the struggles that they are having.

TAYLORAnd I think this debt and deficit fight that we've been all watching for the last few weeks is the first chapter of what is going to be an ongoing fight that will last years, if not decades.

PAGEGoes to very fundamental issues.

HARRISONIt does. I think this, plus the -- these dilemmas that are raised in the deficit talks, the need to curb the deficit, will raise the questions: What responsibilities do we see ourselves as having? What floors are we going to set beneath people? And at what -- or at what point do you start to feel that groups are, or not, contributing their fair share to the solutions of these problems?

HARRISONOr at what point do you start feeling that you're trying to transfer income or wealth from one portion of the population, that has perhaps worked hard to achieve this, to another?

PAGEWe have an email from Casper, who writes, "I've noted the absence of Asian and other minorities in the analysis being addressed. What is the reason for this? And does it preclude any alternate conclusions in the ones being reached?" You know, Paul, this -- your report does, in fact, talk about Asians as a group that's position in this ladder has changed.

TAYLORIt is. And let me give a brief summary of it. What -- this report is based, as I said earlier, on two snapshots in time, one taken in 2005 and one taken again in 2009. In 2005, median Asian household wealth was actually above that of median white household wealth. But between 2005 and 2009, Asians suffered a much bigger decline, in part, because of their reliance on homeownership and part because they're disproportionally likely to live particularly on the West Coast in some of these hot real estate markets.

TAYLORAnd I think it was -- the 2005 snapshot probably captured the bubble that inflated their wealth, and by 2009 that bubble had burst. There's a complicating factor, which we get into on the report with Asians, in that Asians are a very active immigrant group still. And a part of the decline we probably saw in those four years was the arrival of new immigrants who tend not to arrive with a tremendous amount of wealth.

TAYLORSo if you took those recent immigrants out of the equation in those two years, you'd get a slightly smaller decline. But still, the Asian community, like blacks and Hispanics, suffered much bigger proportional loses than the whites. The difference is their wealth is in the order of magnitude of the wealth of whites and not at the 10 -- 20-1 ratios for the others.

PAGEI'm Susan Page, and you're listening to "The Diane Rehm Show." We've been taking your calls. Let's go back to phones and talk to Bill. He's calling us from Herndon, Va., and he's been holding on for quite a while. Bill, thanks for being patient.

BILLThanks for taking my call. Great panel. Just wanted to do a couple follow-ups. An extension of the thought of the fact that the Hispanic community has grown so much in recent years, what impact new immigrant families coming into the country in recent years might be skewing those numbers a bit? And then also -- and this is a chain of logic I never quite express clearly.

BILLBut in some ways, as the economy and the world grows, there's no upper boundary on how wealthy the wealthy can be. And it would seem that a natural progression of that would be that the numbers might be skewed by the fact that wealth, there's no upper boundary to it, and over time, the wealthiest will inevitably become wealthier. Just a couple of thoughts in terms of how they match up with the data your guys have collected.

PAGEAll right. Bill, thanks for your call. Gary?

BURTLESSWell, I'll let someone else discuss the Hispanic immigrants because my companion here has done the survey, and he knows about that. But on the natural boundary, bear in mind that we have had in the past long periods in which, in fact, there was a dramatic narrowing of the gap between the people who are best off and the people in the middle.

BURTLESSAnd that period of time, from the end of the Great Depression until 1970s, lasted a long time. It was a very -- it was a period in which the very top income recipients and wealth holders did not see their incomes rise faster than the people in the middle class. They saw them rise more slowly.

PAGEYou know, we -- before we go back to that, we just have a little bit of time left. We have a tweet that says, "So what do we do about this? Obviously, there's a problem. Is there a short-term fix or a long-term fix?" Just very quickly, are there things that you think policymakers or Americans ought to be doing because you've identified this situation, Paul?

TAYLORSusan, I'm in the let's-figure-out-what's-going-on and I leave the what-do-we-do-about-it to others.

PAGEAll right. Gary, do you have a fix or a suggestion?

BURTLESSWell, in the short run, the best thing we can do is make the economy grow faster and reduce the levels of unemployment. And we can do that through much more fiscal stimulus, in my view. And that's just the opposite of the direction we're going in.

PAGEAnd, Roderick, we're going to give you the last word.

HARRISONWell, again, to the extent that wealth is an accumulation from income, we do need to address the employment problems. We do need -- the share of income earned by the top 10 percent group, from about a third from – up to 1980 to now, nearly half, I think, that skewed, in income distribution, leaves too little purchasing power in the lower and middle income distributions to support the consumer portion of the economy.

PAGERoderick Harrison, he's a professor at Howard University. Gary Burtless from the Brooking Institution and Paul Taylor from the Pew Research Center, thank you all for joining us this hour on "The Diane Rehm Show."

HARRISONThanks for having me.

BURTLESSThank you.

PAGEI'm Susan Page of USA Today, sitting in for Diane Rehm. Thanks for listening.

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