Unrest Spotlights Depth of Black Americans’ Economic Struggle

(Bloomberg) -- Protests sweeping U.S. cities over the videotaped death of an unarmed black man at the hands of police are accentuating other grim realities of racial disparity in America: African-Americans lag other groups by nearly every economic measure.

In Minneapolis, where George Floyd’s death set off the protests, the median income of a black household is about a third of the $77,224 a white household takes in. Nationwide, black households earn about two-thirds of the median white household.

“You start off with inequality and it can easily expand on its own,” Seth Carpenter, chief U.S. economist at UBS Securities LLC, said about the wealth gap. “You combine inequality with the de-facto rules preventing more wealth accumulation with housing policies and rules like that, it clearly expands over time.”

In addition to the lack of buying parity, the gap also means African-Americans have less money to help shield against illnesses and other disasters. The coronavirus pandemic is killing black people at a rate 2.4 times that of white people.

Wealth

Building wealth -- which can include savings and investments as well as home ownership -- is a cornerstone of increasing economic mobility and, more simply, the American Dream. The median white family had a $171,000 net worth in 2016, 10 times that of median black households, which stood at $17,150.

Joblessness

Black workers have seen a higher unemployment rate than other races or ethnicities for decades. It reached 16.7% in April amid the pandemic’s catastrophic job losses. Even at its low in August, the black unemployment rate was 2 percentage points above white Americans’ 3.4%.

Job losses since February have been greater among people of color. Almost 20% fewer black Americans were employed in April compared with two months earlier, a bigger loss than among white people, with May data Friday expected to show further job cuts.

21% Poverty

Almost 21% of black people in the U.S. live below the poverty level, a rate more than double that of white people. Long-term poverty and the restrictions that often go with it -- being born in a poor neighborhood, lacking access to quality education, among others -- can stay with an individual for life.

Coronavirus Effect

Covid-19 has disproportionately affected people of color, especially black people. In the U.S. overall, the rate of deaths among black people is more than double that of white people. The rate is also a bit higher in Minnesota, where Floyd was killed and protests began.

©2020 Bloomberg L.P.