As February ushers in Black History Month, the latest LendingTree data uncovers the persistent racial economic inequalities in America. Despite some strides, disparities between Black and white citizens remain pronounced across various sectors such as income, wealth, savings, employment, credit, and retirement.
wealth disparities
Wealth divides between Black and white Americans are daunting. In the third quarter of 2024, the wealth held by Black Americans was a mere $5.39 trillion, representing only 3.4% of the nation’s total. Contrarily, white Americans commanded a staggering $134.58 trillion, approximately 84.2% of the total slice.
The gap in net worth has broadened to a staggering $240,210 as of 2022. Although there’s been a remarkable 57.8% uptick in the median net worth for Black families from 2019 to 2022, these financial advancements pale when juxtaposed with the overarching inequality.
income and employment
By 2023, Black households reported a median income of $56,490. In contrast, white households earned $84,630, resulting in a 33.3% gulf—an increase from the previous year’s 31.6%. Moreover, Black full-time workers pocketed a median weekly wage of $962 in the third quarter of 2024. This was 18.8% short of their white counterparts’ $1,184.
In some sectors, like agriculture, the gap widens alarmingly. Here, Black workers earned only 40% of what their white colleagues took home.
Regarding employment, the notion of “last-hired, first-fired” highlights the vulnerabilities faced by Black workers, who consistently bear higher unemployment rates than white peers. As of December 2024, the unemployment rates were 5.6% for Black men and 5.4% for Black women, overshadowing the 3.3% and 3.4% rates for their white counterparts.
savings and banking
Savings and banking habits further expose the stark contrasts. Around 14% of Black adults were unbanked in 2023, overshadowing the 4% of white adults. Moreover, overdraft fees stung 19% of Black Americans, compared to just 9% of whites. Financial cushions were less robust: only 42% of Black adults maintained at least three months’ emergency savings, unlike 59% of white adults.
credit and loan disparities
The credit landscape remains unforgiving for many Black Americans. In 2023, 65% of Black adults earning under $50,000 faced credit denial or received below-expected amounts. The figure for white applicants in the bracket was only 47%. Even among the wealthier, credit access woes persisted. Black applicants earning over $100,000 were declined or underfunded 29% of the time, while this fate befell only 13% of their white peers.
LendingTree’s chief credit analyst, Matt Schulz, underscored income’s influence. Although income doesn’t factor into a credit score, it does sway banks’ decisions on credit extensions. He advises using personal loans to consolidate smaller debts, a strategy that may offer some financial flexibility.
retirement readiness
Retirement planning paints a grim picture too. Only 34.8% of Black families had retirement accounts such as a 401(k) or IRA in 2022, compared to 61.8% of their white peers. The disparity in median retirement balances—$39,000 for Black families versus $100,000 for white ones—is glaring.
In the latest reports, a mere 51% of Black non-retired adults held tax-preferred retirement savings accounts compared to 68% of white adults. Schulz highlights the limited financial margins Black households face, exacerbated by inflation. “It’s particularly troubling,” he remarks, “when prices soar and financial leeway shrinks.”
For further reflection on these topics, consider reading related insights from the BBC or The Guardian.
Stacy M. Brown serves as an NNPA Newswire senior national correspondent and can be reached at social@StacyBrownMedia.
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