Investing in Racial Economic Equality

Income and Earnings Gaps

• The median income gap between Black and white men is just below 70% today.
• While this represents an improvement over the 100% gap in 1940, it is worse than the 50% gap recorded in 1970.
• Black men's relative earnings rank has shown almost no improvement over the last 70+ years; the average Black man is no better off than his grandfather.
• Earnings mobility remains significantly lower for Black men, who are roughly three times less likely than white men from similar bottom-tier families to reach the top of the income distribution.
• The earnings gap narrows at the top decile to less than 50%, a shift attributed largely to race-specific policies like affirmative action.
• Black male earners at the top have risen from the 50th percentile of the white earnings distribution in 1940 to the 75th percentile today.
• Conversely, the earnings gap between the median and the bottom has grown substantially, driven by increasing rates of non-employment.
• Approximately 35% of prime-age Black men are not working, compared to 17% of white men, due to factors including incarceration and lack of education.

Wealth Disparities

• The typical Black household holds approximately one-tenth the wealth of the typical white household.
• Wealth gaps are partly explained by disparities in home ownership rates and the persistent income gap.

Educational Inequities

• Black 12th-grade students currently rank in the 19th percentile in reading and math.
• Although this is an improvement from the 13th percentile 50 years ago, current progress rates suggest closing the achievement gap will take roughly 250 years.
• Experts emphasize early childhood education and college graduation as critical focus areas, noting that college graduates are both higher earners and significantly more likely to be employed.

Private Capital and Investment

• Private capital is identified as central to wealth creation for college access, home ownership, business building, and community investment.
• Goldman Sachs argues that mispriced risk creates business opportunities, where pent-up demand and public-private risk sharing offer compelling risk-adjusted returns.
• The Urban Investment Group has invested in Newark's affordable housing and schools serving primarily Black students, providing thousands of families with improved housing and educational opportunities.

Strategic Outlook

• Overcoming these inequities requires a holistic approach involving both the public and private sectors.
• Experts characterize this collaboration not merely as a moral imperative but as essential for the long-term health and vibrancy of the U.S. economy.