The role of income in mending the wealth gap

It may seem reasonable to assume higher incomes will mend the racial wealth gap, but this disparity is not explained solely by earnings among African Americans. Some 21 percent of the racial income gap is attributed to household incomes (Shapiro, Meschede, & Osoro, 2013), but income inequality is also highly correlated with social inequities in a number of different areas, such as education, health disparities, adequate housing, access to clean air and adequate neighborhoods. In 2012, the median incomes of African Americans were a little more than half those of Whites - $33,321 for black families in comparison to $57,009 for white families (DeNavas-Wall, Proctor, & Smith, 2012). These figures have a direct effect on wealth disparities among African Americans across all income levels (Hamilton et al., 2015). For instance, an African American family with an annual income of about $18,480 has no wealth, while the equivalent white family has $15,000 in overall wealth. Wealth is a far greater indicator of economic well-being relative to income, and African Americans tend to have less wealth compared to Whites at the same income levels.

Disparities in wealth are due, in part, to racism, discrimination, and hiring and promotion practices, among others. Many college graduates settle for low-level, manual-labor type jobs, sendee-sector positions, or other types of low-wage jobs. These types of jobs often come with few if any opportunities for advancement or adequate benefits. Low household incomes are followed by poverty and homeless. African American families have a poverty rate reported to be 2.8 times higher than for white families (DeNavas-Wall et al., 2012). This statistic is most likely considerably higher given the fact that those African Americans who are incarcerated, in jail, or on probation are not counted in poverty statistics.


The Great Recession, lasting over 18 months, is considered to be over, but its effects linger and will most likely have a permanent effect on many African American families. The recession has seriously damaged the lives of African Americans, including their savings accounts, predatory lending and housing foreclosures, high unemployment, job losses, college enrollment and completion, household income, retirement income and security, as well as numerous additional job-market issues. These economic effects are more pervasive for African American and Hispanic families than for white families in general. However, the consequences have a severe impact on all families. In 2015 the unemployment rate among African Americans was nearly 10 percent, double the rate among Whites (Bureau of Labor Statistics, 2019), which is a clear indication that the impact of the recession was still in effect and that economic recovery remains dismal for Blacks. African American families disproportionately experience low wages and the increasing cost of living prevents many from accumulating wealth, which has a direct negative effect on the resilience and vibrancy that is characteristic of the black population (Billingsley, 1992).

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