Black History Month: 5 Facts About African Americans and Economic Mobility

Black History Month - 5 Facts About African Americans & Economic Mobility

Black History Month is a time to celebrate the contributions that African-Americans have made to our country. It’s also a time to reflect on our continued struggle for racial equity.

Throughout February, the Center for Advancing Opportunity (CAO) is highlighting the work of our three centers, with a focus on data points that encapsulate the African-American experience. This week, the Center for the Study of Economic Mobility at Winston Salem State University shares five facts about African-Americans and economic mobility including wealth, homeownership, household income, and health.

1. Wealth Inequity

At $171,000, the net worth of a typical White family is nearly ten times greater than that of a Black family ($17,150) in 2016.

A close examination of wealth in the U.S. finds evidence of staggering racial disparities. Gaps in wealth between Black and White households reveal the effects of accumulated inequality and discrimination, as well as differences in power and opportunity that can be traced back to this nation’s inception.

The Black-White wealth gap reflects a society that has not and does not afford equality of opportunity to all its citizens.

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2. The Large Gap Between Black and White Homeownership

Among Black families, 44% owned their own home as of the first quarter of 2020 compared to 73.7% of White families.

The gap in racial equity that persists in many facets of American life impacts homeownership as well.

Homeownership is critical to the accumulation of wealth and a factor in the stark difference between the net worth of white families vs. Black families.

While a house itself can be the inheritance passed on to the next generation, a family can tap a property’s equity to fund a child’s college education, start a business or give a child or grandchild the down payment to buy a home of their own.

Black families experienced a slight uptick in homeownership in 2019, but that progress is threatened by the coronavirus pandemic which is disproportionately affecting both the physical and financial health of Black Americans.

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3. The Rise of Black Household Income Across the U.S.

Though there are substantial gaps in average income between Blacks and Whites, from 2013 to 2018 Black median household income increased at a faster rate than White households, across most metropolitan areas.

CAO’s State of Opportunity in America Report finds that fragile community residents are almost twice as likely as U.S. adults overall to have annual household incomes under $35,000 — 53% vs. 28%, respectively — and less than one-third as likely to have household incomes of $90,000 or more. While Whites make up 63% of the total U.S. population, that figure falls to 38% in fragile communities, where most residents are Black (31%) or Hispanic (23%).

However, in 2018, African-American median household income (the level at which half of households have higher incomes, and half lower) in the U.S. reached $41,511. While that level only slightly exceeded that (and was statistically unchanged) from 2017, it continued to top 2007’s pre-recession peak for Black median household income of $41,134.

Equally promising was the geographically widespread increase in incomes Black households experienced. Of the 50 metropolitan areas with the largest Black populations, 18 registered a statistically significant increase in median income for those households between 2013 and 2018.

Metro areas in the West and South recorded the largest statistically significant increases in Black median household income. San Francisco and Seattle topped the list, with their typical Black households earning at least 30% more in 2018 than 2013.

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4. Black Households Own Fewer Cars

In the United States, Black households have the highest rates of vehicle non-ownership of any ethnic group, at 27%, followed by 17% of Hispanics and just 10% for white households.

A vehicle is necessary for most jobs. Those without, often have long commutes by bus and face a time tax of lost hours that could otherwise be spent earning more money, investing in family time, or having leisure time like other families with vehicles.

In addition to Black households owning fewer cars, the Bureau of Labor Statistics’ Consumer Expenditure Survey reports that minorities pay far more than Whites to insure each motor vehicle they own. Additional data indicate that minority consumers also receive less coverage for their expenditure.

In fact, after accounting for different levels of car ownership among the groups, Hispanics spend 26% more than non-Hispanic Whites to insure a single vehicle and African Americans spend 100% more than Whites for each car insured.

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5. African Americans Are Living Longer

The death rate for African Americans has declined about 25% over 17 years, primarily for those aged 65 years and older, but African Americans are still far more likely to die at early age from all causes.

Even with these improvements, new analysis shows that younger African Americans are living with or dying of many conditions typically found in white Americans at older ages.

The difference shows up in African Americans in their 20s, 30s, and 40s for diseases and causes of death. When diseases start early, they can lead to death earlier. Chronic diseases and some of their risk factors may be silent or not diagnosed during these early years.

According to the CDC, African Americans are 1.4 times more likely than Whites to get COVID-19, 3.7 times more likely than Whites to be hospitalized from COVID-19, and 2.8 times more likely than Whites to die from the virus.

CAO’s 2019 State of Opportunity in America Report looked at health in fragile communities, where most residents are Black (31%). One-third of fragile community residents (33%) described their health as “excellent” or “very good,” while a similar percentage (31%) said it was “fair” or “poor.”

Health differences are often due to economic and social conditions that are more common among African Americans than Whites. For example, African American adults are more likely to report they cannot see a doctor because of cost.

All Americans should have equal opportunities to pursue a healthy lifestyle.

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