There is a significant economic gap between Black and white Americans when it comes to net worth, owning a house, owning stocks, starting a business, etc. according to a study from the McKinsey Global Institute.
From obtaining a credit card to paying for college, Black Americans face many barriers to achieving financial wealth.
Black Net Worth
New research from LendingTree shows that Black families have a net worth of $142,330, which is one-seventh of white families’ wealth of $980,550.
Similar disparities exist between median net worths of the two groups. Black families have a median wealth of $24,100, which is one-eighth that of white families, who have a median wealth of $189,100.
The economic state of Black America report estimates that 2 percent of Black families, or 340,000 households, are worth more than $1 million. Compared to that, nearly one out of every seven White families has a net worth of $1 million or more.
Negative Net Worth
McKinsey & Company reports that approximately 3.5 million (about 19%) Black American families have a negative net worth due to discriminatory policies implemented by both the government and the private sector.
Comparatively, the share of white families with negative net worth is 8 percent.
Effects of Racial Disparities
You can feel the effects of these differences for years to come.
“You can’t ignore the continued racial disparities that affect almost every aspect of wealth creation,” says Vicki Bogan, a Cornell University associate professor.
In order to help marginalized communities develop wealth, we have to start by “recognizing that this is a valid issue and not politicizing it,” Giovanetti explained. Then, we could pass laws to benefit Black communities, such as funding public schools, assisting minorities in becoming homeowners, and providing capital for Black business owners.
“Without that access and opportunity,” said Giovanetti, “I would expect to keep seeing these racial gaps increase if we can’t do something to make sure that we can raise everybody up and help Black Americans achieve the same economic prosperity as their peers.”