African Americans and the Racial Wealth Divide in 2020

There are over 47.8 million African Americans residing in the United States, with the largest black populations found in Texas with about 3.3 million (11.7% of population). In terms of racial concentration, the highest percentage of African Americans were found in District of Columbia, which population was 46% Black. Mississippi follows, with their population 37.5%. 55% of the total African American population is found in the South, 18% in the Northeast, 17% in the Midwest, and 10% in the West[1].

Though the African American population continues to rise, incomes do not reflect the increasing demographics. In 2018, the annual median income of African Americans reached $41,361, which is below the national average of $61,937, and far below the white median income valued at $70,642[2]. The Bureau of Labor Statistics[3] reported a national African American unemployment rate of 6.5%, mirrored very closely by Native American unemployment at 6.6%. This level of unemployment for African Americans is a record low nationally. Yet even with this record low level of unemployment there are still substantial disparities when compared with other racial groups. The national unemployment rates is at 3.9%.

Education levels have been overall on the rise for African Americans. High school completion rates for African American students have been increasing since 2010, in which graduation rates for African Americans were at 67%. In 2017, graduation rates reached 78%, totaling to an 11% increase in high school graduation rates from 2010 to 2017[4]. This was the largest improvement in graduation rates among racial groups. Postsecondary educational attainment also increased from 2010 to 2017; attainment of a bachelor’s degree or higher increased from 17.5% to 21.6%[5]. Yet, there is still great disparity with white Americans who have a bachelor’s attainment rate of 36% and a high school graduation rate of 93%.

Income and employment only display partial components of economic well being. Wealth levels account for total debt, financial assets such as investment funds, and nonfinancial assets such as residential property ownership. Thus, net worth is a broader depiction of wealth, and starkly highlights the racial wealth divide. While White households have a median family net worth of $147,000, Black households have a median family net worth of a mere $3,600; in other words, the median white family has 41 times more wealth than the median black family[6].

About 20 years into the 21st century we see that the African American journey to equality in the United States is still quite distant, particularly as it relates to economics and wealth.

The structural regeneration of debt and poverty is something that must be acknowledged, and efforts must be made to eliminate the harm it has done. Such policy that can be enacted to ameliorate the harm inflicted by the racial wealth divide includes taxing the top through a wealth and inheritance tax, and directing revenue earned towards improving the wealth-building capacity of low-wealth families and communities. A deeper understanding of the racial wealth divide and its roots at the systemic level is desperately needed. A common understanding of the racial wealth divide can allow for such policies to be readily enacted, and for America’s extreme divides to end.

(The above is a summary of the African-American Racial Wealth Divide Snapshot.)

By Dedrick Asante-Muhammad and Jamie Buell of the Race, Wealth and Community Division of NCRC.

[1] http://worldpopulationreview.com/states/black-population-by-state/#undefined

[2] United States Census Bureau, Current Population Survey, 2018 and 2019 Annual Social and Economic Supplements.

[3] U.S. Bureau of Labor Statistics, Labor Force Characteristics by Race and Ethnicity, 2018.

[4] National Center for Education Statistics, Public High School Graduation Rates.

[5] United States Census Bureau, 2010 & 2017 American Community Survey, 1-Year Estimates.

[6] Collins, Hamilton, Asante-Muhammad, Hoxie. Ten Solutions to Bridge The Racial Wealth Divide, April 2019. Institute for Policy Studies.