The racial wealth gap — the disparity in median wealth between the different races — is a persistent struggle, and it appears to be worsening, especially between White and Black Americans.
According to a recent study by McKinsey & Co., Black Americans can expect to earn up to $1 million less than White Americans over their lifetime. The median White family had more than 10 times the wealth of the median Black family in 2016, according to the Federal Reserve’s most recent Survey of Consumer Finances. White families had the highest level of median wealth, at $171,000, while Black families median wealth was $17,600 and Latino families was $20,700.
White workers, on average, are paid more than Black and Latinx workers at almost every education level, according to a 2018 report by the Economic Policy Institute. Whites with an advanced degree received an hourly wage of $44.46, while Latinx earned $38.47 and Blacks earned $36.23.
Many social, historical, political and institutional forces have contributed to this gap, and closing it is a daunting task. Yet many CEOs and other nonprofit leaders agree that financial education and job training can help individuals who are far behind gain some traction.
Research shows that Black Americans’ knowledge of saving and investing significantly lags behind Whites.A November 2019 study by the Global Financial Literacy Excellence Center at George Washington University and TIAA Institute found that, on average, African Americans answered 38% of their joint Personal Finance Index questions correctly. In comparison, Whites answered 55%