In the U.S., there is a noticeable gap in income and wealth between White and Black households (HowMuch, 2018; Derenoncourt et al., 2022). In almost every state, White workers earn more than Black workers and affect everyday life, from stress and mental health to access to quality healthcare and opportunities for their children (HowMuch, 2020; Derenoncourt et al., 2022). By understanding why this gap exists, we can see and understand the real human stories behind the statistics.
These differences have deep historical roots. Many White families have benefited from advantages passed down through generations, including access to better-paying jobs, homes they can call their own, and family support that helps them handle life’s ups and downs. Meanwhile, most Black families have faced systemic obstacles like unfair housing policies, limited access to credit, and fewer inherited resources (Broady et al., 2022; Aladangady et al., 2023). These obstacles have real consequences, affecting families’ capacity to build savings, purchase homes, and support their children’s opportunities for the future (Broady et al., 2022; Derenoncourt et al., 2022).
Research shows the wealth and income gaps remain wide (Derenoncourt et al., 2022; Kochhar & Moslimani, 2023). White households not only earn more but also accumulate wealth faster than Black households (Derenoncourt et al., 2022; Kochhar & Moslimani, 2023). Historic disadvantages, unequal access to quality education, and ongoing barriers in employment and housing contribute to this gap. Experts emphasize that these are systemic issues, not reflections of individual effort or work ethic.
For example, a Black family trying to buy their first home may face higher mortgage rates, fewer loan options, and neighborhoods with less access to quality schools. Meanwhile, White families with inherited wealth can leverage these advantages to invest, save, and pass resources to the next generation, reinforcing the gap.
The racial income and wealth gap in the U.S. reflects both history and ongoing systemic inequalities. Addressing it requires coordinated efforts at every level, from personal financial planning to policy reforms. By taking action, society can help families live healthier, more secure, and hopeful lives while fostering greater fairness and opportunity for future generations.
References:
Data visualization:
Howmuch.net (2018) Racial income inequality in the U.S.: Difference in median household income – White vs. Black [Infographic]. Web Archive. https://web.archive.org/web/20190805213002/https://howmuch.net/articles/racial-income-wealth-inequality-us
Broady, K., Booth-Bell, D., & Griffin, T. (2022, July). Seven economic facts about the U.S. racial wealth gap (Working Paper No. 2022‑32). Federal Reserve Bank of Chicago. https://www.chicagofed.org/-/media/publications/working-papers/2022/wp2022-32-pdf.pdf
Original data & further reading:
Aladangady, A., Chang, A. C., & Krimmel, J. (2023, October 18). Greater wealth, greater uncertainty: Changes in racial inequality in the Survey of Consumer Finances. Board of Governors of the Federal Reserve System. https://www.federalreserve.gov/econres/notes/feds-notes/greater-wealth-greater-uncertainty-changes-in-racial-inequality-in-the-survey-of-consumer-finances-20231018.html
Derenoncourt, E., Kim, C. H., Kuhn, M., & Schularick, M. (2022). Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860‑2020 (Working Paper No. 30101). National Bureau of Economic Research. https://doi.org/10.3386/w30101
Kochhar, R., & Moslimani, M. (2023, December 4). Wealth gaps within racial and ethnic groups. Pew Research Center. https://www.pewresearch.org/2023/12/04/wealth-gaps-within-racial-and-ethnic-groups/
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