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Trends Newsletter February 2022

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Racial Mix of US Households

Fifty-five years ago there were few interracial households (HHs) in the United States. In fact,16 states had laws prohibiting marriage between Whites and Blacks or Whites and Asians in efforts to ensure the 'purity of races;' basically, White lawmakers' efforts to prevent miscegenation (interbreeding). In 1967, the Supreme Court struck down state laws preventing marriage between people solely on the basis of race (Loving v. Virginia) as a violation of the 14th Amendment. Coincidentally, that same year the Senate confirmed the first Black Supreme Court justice, Thurgood Marshall; Marshall and his multiracial wife (a Hawaiian of Filipino heritage) were an interracial couple.

In 1980, "7% of all newlyweds were in an intermarriage" according to Pew Research. By 2015, the share of intermarriage newlyweds was more than 17%; that same year, 10% of US newborns had parents of different races. Then, as today, the largest portion (42%) of "multiracial children have one parent who is Hispanic and one who is non-Hispanic white." Often geography is a factor in the prevalence of multiracial HHs. For example, a high proportion are found in Hawaii (44%) and low proportions (4% or less) in bastions of conservativism: Maine, North Dakota, Mississippi, and West Virginia.

Today we have a Black, a Hispanic, and three women who serve on the Supreme Court, a mixed-race vice president in an interracial marriage, and 124 (23%) Congressional members of racial or ethnic minorities—the most diverse Congress in history. There are almost 13 million multiracial US households (HHs), according to the 2020–21 MacroMonitor; the number is trending up. Although the majority of HHs are White only, the proportion has fallen from 67% of all HHs in 2012 to 62% of all HHs in 2020. Because the proportion of interracial households will grow exponentially, financial-services providers are increasingly interested in single multiracial and (married) interracial HHs as a target for potential business.

Trend: Racial Composition of US Households

Between race, ethnicity, and culture (not to mention sexual identity), there are a lot of factors to consider before you get excited about targeting HHs on the basis of race. People identify through customs, language, and experiences. Physical features may denote racial identity to outsiders, but not necessarily within a family or community; children within a multiracial family for example, don't always share the same racial identity. Ethnicity within race is influenced by family attachments, support, and experience with racial groups. Language doesn't always correlate to culture or customs; all members of a family might or might not speak the same, or only one language at home. Marriages between different races produce different types of HHs. In short... it's complicated.

Overall, multiracial HH heads (HHHs) are somewhat more likely than all HHHs—or only Black, Hispanic, or White HHHs—to hold a master's degree or higher, to have a professional or technical career, and to have a higher than average mean HH income. Asian and Asian-mixed HHs are exceptional. They represent the smallest racial group but are the most highly educated; they out-earn all other types of HHs. Whereas discrimination against Blacks was/is driven by fear of property loss, interbreeding and diminished white privilege, the increasing violence against Asians may be a fear of America's decline as a world leader (exceptionalism) and loss of jobs to the far East (China). Unproven and insensitive references to Covid‑19 as the 'China virus' as millions of Americans lost jobs has likely fueled Asian violence.

Ethnic and cultural differences have varying degrees of influence on choice of financial products and service providers. The less HHs are forced to select on price, provider integrity increases in importance.

Future success depends in part on how well your workforce reflects the composition and balance of the marketplace. Organizations can't afford to be myopic in their consumer view because the marketplace is poised to become even more blended than it is today. A 2016 survey found that "47% of white teens, 60% of black teens, and 90% of Hispanic teens said they had dated someone of another race." Generation Z is comfortable with diversity in a backdrop of climate change, the ongoing pandemic, and governments perceived to be ineffective. Messages about universal commonalities will likely be received better than messages that pander to differences. Commonalities are important because going forward, there will be fewer and fewer differences between coveted consumers with respect to race or language.

To learn how we define multiracial or mixed households for this newsletter, and to discuss how your organization can understand better different types of households, please contact us.