Economic inequality in America makes for stark reading with white families having a net worth ten times more than the average Black family. These are the findings of the latest Top of the Mind report by Goldman Sachs (GS) which addresses Investing in Racial Economic Equality.
The wealth gap is being driven by the ability to create wealth through entrepreneurship, earn a higher income over a lifetime due to education, and to avoid reduced economic prosperity due to health disparities. All of these factors are greatly reduced for Black communities due to racial gaps in education, healthcare, access to capital and professional advancement, according to report editor Allison Nathan. “Overcoming these inequities will require a holistic approach from all areas of society, and coming together to achieve this goal is not only a moral imperative, but also essential for the health and vibrancy of our economy,” added Nathan.
One of the most striking findings of the report is that Black men’s earnings have barely risen in the past 80 years meaning an average Black man today ranks in roughly the same place as his grandfather. “The economic gaps between Black and white Americans are stark, and in many cases haven’t improved in decades. Black Americans on average experience higher levels of unemployment, earn lower wages, and accumulate less wealth than white Americans.
“How to close the large and persistent earnings and wealth gaps between Black and white Americans is one of the most pressing questions of our time, with enormous implications for our economic future and the future of America more broadly,” warned Nathan. Meanwhile the coronavirus pandemic has highlighted racial disparities among small businesses. Some 18% of Black-owned businesses are temporarily closed, compared to just 8% of white-owned businesses and 44% of Black business owners expect to see dramatic changes in the way their business operates after the pandemic, compared to 29% of white business owners.
The COVID-19 outbreak has also highlighted the huge gap in US health equality. Infection rates for Black and Hispanic Americans are three times greater than for white Americans, and the mortality rate for these groups is nearly two times the rate for white Americans. “With society’s recent focus on achieving racial justice and tackling systemic racism, we have a window of opportunity now for healthcare organisations, politicians, and corporate leaders to accelerate efforts to reduce, and ultimately eliminate, racial health disparities in America,” said John Ayanian, director of the Institute for Healthcare Policy and Innovation at the University of Michigan, in the report.