America’s racial wealth gap, pushed to the front of the nation’s agenda during the racial justice protests of last summer, has continued to widen and has indeed worsened during the COVID-19 pandemic.
The impact on Black lives, Black wealth and Black businesses has been enormous. According to the Federal Reserve Bank of New York, more than 40% of Black businesses shut down between February and April 2020. And 44% of Black workers say they have experienced income loss since March 2020, compared to 27% of white workers. Economists and business experts say it will take years for Black Americans, still staggering from the Great Recession of 2008, to recover.
“What COVID did was just peel back the ugly realities of the inequities that exist in the United States,” says Harold Epps, former director of commerce for the city of Philadelphia and senior advisor at Bellevue Strategies. “It just put a spotlight on us, just as the video cameras in Minnesota did.”
Last fall, a study by the RAND Corporation found that tens of millions of Americans could and should be making twice what they’re currently earning—for example, a full-time worker currently earning the national median wage of $50,000 would be making close to $100,000 now — if the country’s economic growth had been shared as broadly over the past 45 years as it was from the end of World War II until the early 1970s. Though the study found similar pay gaps between all racial groups, the wealth gap magnifies the loss of income experienced by Black workers. In other words, if a white and a Black worker each earn $50,000 for a job that should pay $100,000, the white worker is likely to still be far better off because their wealth is far greater than the Black worker’s. As the Federal Reserve Bank of Cleveland has determined, the income gap “is the primary driver behind the wealth gap and that it is large enough to explain the persistent difference in wealth accumulation.”
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