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 significantly higher than all other race and ethnic groups except for Indigenous people. For each 100,000 Americans (of their respective group), about 256 Indigenous people and 179 Black people, 176 Pacific Islanders and 147 Latinx people have died from the coronavirus, compared to 150 Whites and 96 Asians, as of March 2, 2021.
People of color are more likely to suffer severe illness if they are infected with Covid-19. As of November 20, 2021, 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 1500 Indigenous people, 1106 Black people, and 891 Latinx people have had Covid-19 symptoms serious enough to require hospitalization, compared to 368 Asian people and 577 Whites.
The racial disparities in Covid-related health indicators have contributed to a larger decline in U.S. life expectancy for people of color, according to data from the National Center for Health Statistics. In 2020, life expectancy dropped for all races, but most sharply for Latinx and Black people. It dropped by 1.2 years to 77.6 for Whites, by 3.0 years to 78.8 for Latinx, and by 2.9 to 71.8 for Black people.
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, the racial disparities remain. As of November, the unemployment rate was highest among Black Americans, at 6.7 percent, compared to 3.7 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.
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 Survey of Consumer Finances data, the median Black family has $24,100 in wealth. This is just 12.7 percent of the $189,100 in wealth owned by the typical White family. The median Latino family, with $36,050, owns just 19.1 percent of the wealth of the median White family. The Institute for Policy Studies Racial Wealth Divide report provides more detail on this disturbing trend and proposed solutions.
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. Institute for Policy Studies analysis of Federal Reserve data shows that while the racial wealth gap has improved slightly, an estimated 28 percent of Black households and 26 percent of Latinx households had zero or negative wealth in 2019, twice the level of 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 2020, Fortune 500 CEOs, who earned approximately $15.5 million on average, included just five Black people and 17 Latinx people — less than 5 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 31.9 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 second quarter of 2021, the median White worker made 26 percent more than the typical Black worker and around 30 percent more than the median Latinx worker, according to BLS data.
The Covid-19 pandemic drastically raised unemployment in America, but that impact has not been felt evenly across all racial groups, according to BLS data. In December 2020, as the recovery of the summer months started to fade, the unemployment rate was 9.9 percent for Blacks and 9.3 percent for Latinx, compared to 6.0 percent for Whites and 5.9 percent 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 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 — $37,558, on average — compared to $31,346 for White women and $29,862 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 in 2019 the U.S. poverty rate for White men is 6.0 percent, it is 18 percent for Black women, 15 percent for the Latinx community, and 18 percent for Native American women.