Study finds Latinos with college degrees aren’t earning as much as white and Asian graduates

Everyone has their own, indelible version of the American dream.

It's the generational ideal centered on the belief that a college degree leads to financial stability, career growth, and each person's interpretation of a dream home. To some, it means an airy loft along a big-city skyline. Others think of it as the suburban home, protected by rustic white picket fences, earned through a straining four-year education.

Schooling has, for as long as one can remember, decided between the haves and have nots. A new study, however, finds black and Latino college graduates are leaning toward the latter despite earning significantly more than non-graduates of the same ethnicity.

The Federal Reserve Bank of St. Louis found that, from 2007 to 2013, median wealth for Hispanic families fell 72 percent versus 41 percent for families without a college graduate. The dip for whites was just 16 percent.

Granted, figures are taken from the precipice of the collapse of the housing bubble. But study author William Emmons points out these minorities were less prepared than white and Asian families because of differing monetary priorities.

"Black and Hispanic families had a lot more of their assets concentrated in housing and had much higher debt burdens," said Emmons in speaking with NPR. "So we think that probably really increased the sensitivity to many, many black and Hispanic families to a big housing downturn. And that would be very consistent, then, with these enormous losses of wealth."

From 1992 to 2013, the median net worth for Latinos who finished college dropped about 25 percent while worth of white graduates rose 86 percent. The debt-to-income ratio for Latinos when compared to Caucasians was 25 percent higher. Compared to Asians, it was nearly 50 percent higher.

While a racial wealth gap is evident, its root is hard to pinpoint. One's major of choice plays a pivotal role, as does their career path. Income and wealth ratios were higher among whites and Asians because they sought professional degrees directly linked to higher earnings.

Emmons says job-market difficulties "probably played a role" in finding lucrative work, but other studies and surveys suggest it may boil down to discrimination.

Last December, the Center for Economic and Policy Research compared the jobless rate for black and white individuals between 22 and 27 years of age. The black unemployment rate was always higher - twice as high in some cases - when compare to their counterparts.

A separate research firm found employers repeatedly discriminated by calling back candidates with white-sounding names more often than those with African-American-like names.

Emmons' study doesn't find why, for example, median Hispanic and black college-graduate incomes fell by as much as 12 percent while median incomes for white and Asians rose 16 and 17 percent, respectively. If anything, he finds it to be a social problem rather than an educational one.

"Evidence presented here suggests that college degrees alone do not provide short-term wealth protection, not do they guarantee long-term wealth accumulation," Emmons wrote. "The underlying facts causing racial and ethnic wealth disparities undoubtedly are complex and deeply rooted."