A new report from WalletHub, a personal finance website, has found that the racial wealth gap in the United States is alive and well. The report, titled “2024’s States with the Biggest & Smallest Wealth Gaps by Race/Ethnicity,” compared the 50 states and the District of Columbia across 21 key metrics, ranging from the median household income gap to the unemployment rate gap.
The report found that the median household wealth for Black Americans is just $14,100, compared to $187,300 for non-Hispanic White households. Hispanic households also lag behind, with a median household wealth of $31,700.
“The racial wealth gap is a persistent problem in the United States,” said Jill Gonzalez, a WalletHub analyst. “There are many factors that contribute to this gap, including unequal access to higher education and employment for minorities, as well as residential segregation.”
The report also found that the racial wealth gap is more expansive in some states than others. For example, the District of Columbia has the broadest racial wealth gap, with a median household wealth of $281,700 for non-Hispanic White households and just $11,100 for Black households.
“Even decades after the Civil Rights Movement, there is still a high degree of wealth inequality among racial groups in America,” WalletHub Analyst Cassandra Happe stated. “These gaps persist not just in held wealth but also in wages, poverty rates, homeownership rates, and unemployment rates. Part of this wealth disparity is due to unequal access to education, which can put some people on a better financial footing from the start.”
Statistics show that the racial income gap grows larger and larger each year, said Irving L. Joyner, a law professor at North Carolina Central University’s School of Law. Joyner said the growth of the gap has grown because those with more wealth have benefitted more abundantly from their investments and ability to survive the economic downturns within the economy while poorly individuals, mainly racial minorities, were forced to consume their meager resources to survive day-to-day and did not have resources which they could invest.
“For those individuals who have the financial capacity, knowledge, and needed resources to engage in entrepreneurial pursuits, those programs can and do benefit them,” Joyner remarked. “Those opportunities, however, are not readily available for the vast majority of African Americans because of the absence of the resources and business skills that are required to begin and sustain these efforts.
Hawaii has the smallest racial wealth gap, with a median household wealth of $104,300 for non-Hispanic White households and $87,300 for Black families.
“The racial wealth gap is a complex issue with no easy solutions,” said Gonzalez. “However, the findings of our report suggest that there are some states that are making progress in closing the gap. We hope that other states will learn from their example.”