facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
The Racial Wealth Gap Thumbnail

The Racial Wealth Gap


From a financial standpoint, recent market growth gives reason to celebrate. As financial advisors, however, drawing attention to financial realities, good and bad, is part of the job. With that, we take pause to mention critical wealth disparities in our communities.

Following the latest jobs report showing a fall in the overall unemployment rate to 13.3%, the markets are up nicely today. But as markets rally, the unemployment rate for Latino workers declined just slightly to a still painful 17.6%. Black unemployment nudged up to 16.8%, its highest in more than a decade.1  These statistics highlight the differences we face in our country. We have a long way to go to reach economic equality. Our current reality makes clear that we cannot continue to disregard the experiences of people of color.

The income gap between men and women has received a lot of attention in recent years. The gender disparity is repeated when comparing men and women of different races. What may be less apparent is the gap in total wealth (assets minus liabilities) between not just men and women, but between people of different races.

While at Dimensional Fund Advisors, Bridget worked closely with the Women and Wealth Community, whose mission is to improve the way financial advice is delivered to women. Through that work, she had an aha moment that put statistics to something she had always suspected. The income gap between men and women is just one of the things that leads to a broader wealth gap. On top of lower wages, women are more likely than men to face other financial hurdles throughout their lives that add up to less wealth and higher expenses in retirement. Some of these hurdles include, but are not limited to, being more likely to take time off work to care for kids or aging parents, holding more cash when investing, living longer, having higher healthcare costs, the list goes on.

Recent events inspire us to more deeply consider racial disparities, and have given us a similar aha moment – something we knew to be true, but never quite put numbers to. Compared to the gender wealth gap, the racial wealth gap in our country is much starker. The median household wealth for a white household in the United States is $171,000. The median for a black household is just over $17,000.2  This disparity did not happen overnight. There is a long history of federal and economic policy behind it. As women face hurdles keeping them from reaching economic parity with men, people of color face obstacles keeping them from reaching economic parity with white people.

In the spirit of sharing these aha moments, we point you to an episode of Netflix’s series, Explained. They have made the episode on the Racial Wealth Gap publicly viewable on Youtube, linked below.
WATCH: Explained | Racial Wealth Gap (16:12)

As financial planners, we embrace difficult conversations, and this is no exception. We will continue listening and learning to effect change, and encourage you to do the same.

  1. https://www.bloomberg.com/news/articles/2020-06-05/black-unemployment-rate-rises-while-white-joblessness-falls
  2. https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/