Systemic racism has contributed to the persistence of race-based gaps that manifest in many different economic indicators. The starkest divides are in measures of household wealth, reflecting centuries of white privilege that have made it particularly difficult for people of color to achieve economic security. This series of charts begins with a look at the widening of racial wealth gaps in the United States that have coincided with the extreme concentration of U.S. wealth.
According to the APM Research Lab, Black Americans have mortality rates that are more than twice as high as other races, and Indigenous people have significantly higher mortality rates as well. For each 100,000 Americans (of their respective group), about 133 Indigenous people and 124 Black people, 90 Pacific Islanders and 87 Latinx people have died from the coronavirus, compared to 52 Asians, and 76 Whites, as of December 8, 2020.
The pandemic-related economic crisis has been particularly devastating for people of color. When the shutdown sent unemployment levels skyrocketing in March and April, Black and Latinx workers were much more likely to be among the jobless than Whites, according to the Bureau of Labor Statistics data. This was true despite the fact that people of color make up a disproportionate share of essential workers who had to remain on the job. While the jobs picture has improved slightly, the racial disparities remain. As of November, the unemployment rate was significantly lower for White workers than for workers of color. The rate was highest among Black Americans, at 10.3 percent, compared to 5.9 percent among White workers.
The Covid-19 pandemic has forced many workers into remote and telework as offices have closed around the country. But not everyone has the same ability to work from home. The most recent Bureau of Labor Statistics data on this are from 2017-2018. These pre-pandemic figures indicate that only 19.7 percent of Black and 16.2 percent of Latinx people work in jobs where they are able to telework, compared to 29.9 percent of White and 37.0 percent of Asian workers. This gap, combined with research documenting that Black and Latinx people now make up disproportionate numbers of jobs deemed “essential,” explains why people of color have been exposed to greater virus risks.
People of color are more likely to suffer severe illness if they are infected with Covid-19. As of November 21, Center for Disease Control and Prevention data shows that hospitalization rates for Indigenous, Black, and Hispanic and Latinx people are significantly higher than for Whites and Asians, regardless of their age. Per 100,000 people, around 446 Indigenous people, 391 Black people, and 369 Latinx people have had Covid-19 symptoms serious enough to require hospitalization, compared to 135 Asian people and 146 Whites.
By the middle of the 21st century, the United States will be a “majority minority” nation. If we hope to ensure a strong middle class, historically the backbone of the national economy, then improving the financial health of households of color will become even more urgent than it is today. Closing the persistent “wealth divide” between white households and households of color, already a matter of social justice, must become a priority for broader economic policy.
According to our Racial Wealth Divide report, the median Black family, with just over $3,500, owns just 2 percent of the wealth of the nearly $147,000 the median White family owns. The median Latino family, with just over $6,500, owns just 4 percent of the wealth of the median White family. Put differently, the median White family has 41 times more wealth than the median Black family and 22 times more wealth than the median Latino family.
Families that have zero or even “negative” wealth (meaning the value of their debts exceeds the value of their assets) live on the edge, just one minor economic setback away from tragedy. Our Racial Wealth Divide report shows that Black and Latino families are much more likely to be in this precarious situation. The proportion of Black families with zero or negative wealth rose by 8.5 percent to 37 percent between 1983 and 2016. The proportion of Latino families with zero or negative net worth declined by 19 percent over the past 30 years but is still more than twice as high as the rate for Whites.
As with total wealth, homeownership is heavily skewed towards White families, our Racial Wealth Divide report shows. In 2016, 72 percent of White families owned their home, compared to just 44 percent of Black families. Between 1983 and 2016, Latino homeownership increased by a dramatic nearly 40 percent, but it remains far below the rate for Whites, at just 45 percent.
Black people also have to deal with larger student debt burdens. Black students on average have to take out larger loans to get through college than their White peers. A National Center for Education Statistics study reveals that Black Bachelor’s degree and Associate’s degree graduates face 13 percent and 26 percent more student debt, respectively, than their White peers. The challenge of paying off greater student debt is also worsened for Black graduates due to their lower average incomes. Black Bachelor’s degree and Associate’s degree holders earn 27 percent and 14 percent lower incomes, respectively, than Whites with the same degree.
In 2018, Fortune 500 CEOs, who earned approximately $14.5 million on average, included just four Black people and 10 Latinos — less than 3 percent of the total. By contrast, these groups made up 44.1 percent of the U.S. workers who would benefit from a raise in the federal minimum wage to $15 per hour by 2025, according to the Economic Policy Institute. Blacks and Latinos comprise 31.7 percent of the U.S. population.
One indicator of racial disparities at the top of the U.S. earnings scale is the threshold for entry into the top 10 percent. According to the Pew Research Center, for White families to make it into this tier of earners in their racial group, they need to have annual income of at least $117,986 — nearly twice as much as the threshold for Black families.
Racial discrimination in many forms, including in education, hiring, and pay practices, contributes to persistent earnings gaps. As of the last quarter of 2019, the median White worker made 28 percent more than the typical Black worker and more than 35 more than the median Latino worker), according to BLS data.
Although the official U.S. unemployment rate has dropped considerably since the Great Recession, the unemployment rate for Black job-seekers remains nearly twice as high as for Whites, according to Bureau of Labor Statistics data. In December 2019, when many were celebrating “full employment,” the unemployment rate for Blacks was 5.9%, compared to just 3.2% for Whites and 2.5% for Asians. These rates only count those who are actively seeking work, leaving out those who have given up finding a job.
Within racial groups, Bureau of Labor Statistics data shows the largest pay gaps between men and women appear among Whites and Asians — not because Latinas and Black women have made faster progress towards equity but because average pay for men in these groups falls far below the compensation of White and Asian men.
While student loan burdens have grown significantly for all racial groups, they are particularly heavy for Black and Latino students— especially women. Women comprise 56 percent of college students, but hold nearly two-thirds of outstanding student loan debt. According to the American Association of University Women, Black women graduate with the most debt — $30,400, on average — compared to $22,000 for White women and $19,500 for White men.
Racial inequality in terms of the official poverty rate is also particularly acute for women of color. As National Women’s Law Center research shows, while the U.S. poverty rate for White men is 7.0 percent, it is 20 percent for Black women, 18 percent for Latinas, and 22 percent for Native American women.