MassBudget Statement on New Federal Reserve Bank of Boston Wealth Study

Statement by MassBudget, a member of the Community Advisory Council for the first-ever survey of wealth in Massachusetts, newly released by Federal Reserve Bank of Boston 

Statement from Viviana Abreu-Hernandez, Ph.D., MassBudget President

“The Federal Reserve Bank of Boston has done a great service in advancing our understanding of the Massachusetts economy by producing this first-of-its-kind study. Its findings should serve as a wakeup call galvanizing the Commonwealth to close the unacceptable wealth gaps uncovered by this research.” said Viviana Abreu-Hernández, President of the Massachusetts Budget and Policy Center (MassBudget), which has been a member of the study’s Community Advisory Council for the last four years.

“A family’s wealth has profound impact on life chances. It determines how a family weathers misfortunes like an unexpected medical expense or job loss. Having wealth also influences whether a family can take advantage of additional wealth-building opportunities, such as going to college, buying a home, or starting a business. Disparities of wealth can be even more profound than differences in income. Gaps in wealth get inherited across generations, enlarging differences in individuals’ access to opportunity, and compounding disparities over time.”

The study reveals a number of disturbing facts about wealth and its distribution in Massachusetts:

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  The median white family net wealth is $549,200, while the median Black family net wealth is $7,800 and for Hispanic families is $1,200.

  
  


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  1-in-9 white families have zero or negative net wealth, compared to 3-in-10 Black families and 4-in-10 Hispanic families. In Gateway cities, 1-in-4 families have zero or negative net wealth.

  
  


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  Over a third of families in Massachusetts say they could not cover an emergency expense of $400 with money on hand (like cash, checks, debit cards) and among Black and Hispanic families the figure is two-thirds. Half of families in Gateway cities reported they could not afford this expense with money on hand.

  
  


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  Over 38 percent of families with a spouse 45 years or older hold no funds in any IRA or workplace retirement accounts like a 401K.

  
  


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  The average net family wealth in Massachusetts is just over one million dollars; although this high average largely reflects a high concentration of wealth among the richest families. For a typical (median) family in Massachusetts, the figure is $374,000.

  
  

“These wealth gaps are rooted in the economics of slavery and the inability to reduce such systemic gaps are the result of public policies,” said Abreu-Hernández. “Fiscal policies – such as cutting taxes on capital gains or the profits of financial trusts – protect and increase the assets of those already most fortunate, perpetuating and widening the existing wealth gap.” 

The Federal Reserve Bank of Boston study found that one in six Massachusetts families expect to receive an inheritance some time in the future. However, only 4 percent of Black or Hispanic families expect to receive an inheritance, underscoring the racial wealth gap in the Commonwealth.

The best policy tool we have dedicated to mitigating the compounding of wealth gaps across generations is the estate tax. The Commonwealth’s estate tax is projected to generate $719 million in revenue for the state’s Fiscal Year 2027 budget which began in July. Lawmakers cut the estate tax in 2023, giving a tax break of $99,600 to all estates over $2 million and eliminating all taxes on estates below that amount.

“The estate tax is a prime example of a fiscal policy that can be used to reduce wealth gaps in Massachusetts. I am confident that the findings of this study will be used to formulate and enact policies that reduce the existing racial wealth gap in Massachusetts resulting in a more inclusive and participatory democracy where every person has the same opportunity to live a thriving life.”   

The 2025 Massachusetts Economic Conditions and Household Opportunity Survey (Mass ECHOS) is the first study of statewide assets and debt. MassBudget served on the Community Advisory Council that ensured that the Mass ECHOS research was community-informed and successfully implemented across Massachusetts. The Council met regularly, providing critical discussion on research assumptions, survey question development, instrument design iterations, community engagement strategies, and organization of community conversations about the survey.

The new Federal Reserve Bank of Boston study can be found here.