Startling Facts about Racial Financial Inequality

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As if 2020 wasn’t already one for the record books, this past week has seen another upswell of rioting over racial inequality.  The response to George Floyd’s murder by a white police officer has been swift and furious, and the week since his death has led to a ripple effect of protesting, violence, and serious questioning about system failures.  Everything is broken, it would seem, and racial financial inequality is one staggering example.

I couldn’t find the words

I was slow on the uptake, having spent last week enjoying time with my daughter in her first week of summer vacation and largely ignoring the news.  (My apologies for my entirely tone-deaf newsletter on Saturday: chalk it up to being oblivious due to my news fast.)  On Sunday, however, I dug in and started paying attention to what was happening around the country.  I originally intended a completely different blog post for Monday, but I just couldn’t write it.  Instead, I wanted to write something that might be helpful in this time of pain and sorrow, but I couldn’t find the words.

Tuesday came and went as I read further and deeper on the issues facing black people in particular, but people of color in general.  Certainly, I recognize that these issues are not new.  Not one single bit.  Periodically we see uprisings of anger, and it saddens me beyond belief that those uprisings eventually simmer down and life moves on. . . without much, if any, resolution.

Still I could not find the words.

So here we are again, addressing the same awful truths that have been ever-present, but often overlooked by white people like me: well meaning, eager to help, yet caught up in our own lives, making sure our families are fed and the work gets done.  Not an excuse – simply an admission.

Today I finally found the words, inspired by an article I read on CNN.com about financial inequality between black and white people in the United States.  The graphical comparisons between how black and white families are doing financially is both shocking and horrifying.

Household net worth

For example, white households have a median net worth that is ten times that of black households ($171,000 compared to $17,600).1  Net worth is computed by totaling your assets (the things you own) and subtracting the amount of debt you carry (the things you owe).

Household income

The median income comparison is no better, with white households at $71,000 compared to black households at $41,000.2  The percentage of the black population that lives in poverty is more than twice the percentage of white population (20.8% compared to 8.1%)2.

These statistics are unacceptable.  Similar to women, black people have had an uphill battle gaining acceptance and equity with white males in the workforce.  And clearly, black people have not made nearly the inroads that women have on this issue.  While I do not have the statistics handy, I feel certain that other people of color experience these discrepancies, too.

Solution seeking

Unfortunately, I do not have a magic-bullet answer here.  What I do have is gratitude that I am being reminded, yet again, that we all must work together to bring the necessary changes to inequities of all sorts in our society.

I wish I did, but I do not have the answer to how best to solve this.  All I know is what I can do, as a white person in this country.  I can work to better educate myself on the issues, and make sure I am sharing this knowledge with my daughter.  I can promote and support causes that are doing the heavy lifting to make real, lasting changes in corporate and government arenas.  And I can do a better job of maintaining my awareness of the situation as it progresses.

I do have some ideas, though

Change must start with us as individuals, but it must continue with ongoing, steady pressure of our various levels of government to implement (or improve if already existing) programs to help more people of color to become homeowners if they wish (without getting taken advantage of by bad actors in the mortgage industry).  We need better oversight to help all minorities get a fair shake when it comes to job opportunities and the pay that accompanies them.

We need better hiring practices to recruit, train, and retain black talent in professional careers.  (As one example, an embarrassingly small percentage of financial advisors are black or Hispanic.  How can we better recruit talent among minorities?)  And maybe we could focus less attention on holding up black professional athletes as role models for our youth and instead focus on black professional. . . everything else: teachers, scientists, firemen, lawyers, accountants, social workers, etc.  Give our children, particularly black children, better choices about what the future could hold for them with regard to a career choice.

It starts with education

Lastly, how can we improve the education that ALL our youth, but specifically young people of color, get with regard to personal finance?  I will gather resources on the SimpleMoney site that might be geared more specifically to people of color.  Technically, personal finance advice is personal finance advice, but since I am not a person of color, I quite likely do not have the well of experience to pull from that would resonate with the experiences of people of color.

We need to work harder at this.

What else can we do to make this a truly multi-cultural country?  How can we improve racial financial inequality?  Comment below or join the free SimpleMoney Community on Facebook to share your thoughts!

 

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  1. Source: CNN.com article that cited the Federal Reserve Survey of Consumer Finances, 2016. Figures are for non-Hispanic whites and non-Hispanic blacks.
  2. Source: CNN.com article that cited U.S. Census Bureau, 2018. Figures are for non-Hispanic whites and non-Hispanic blacks.

 

 

 

 

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