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RPIC Policy Agenda – Advancing Economic Opportunities for Minority Communities

According to the Federal Reserve, in 2020 white families in the US had a median wealth of $188,200, compared to $24,100 for Black families.[i] Family wealth is an important tool for providing an economic safety net and for assisting the next generation in getting started. [ii] Wealth accumulation was systematically denied, and, in many cases, capital was even taken from Black communities and commuted to white institutions, resulting in the huge disparity seen today[iii]. The legacy of exclusionary practices in the twentieth century is the 800% difference in the median wealth of white versus Black families. Shapiro (2006) exclaims that “closing the racial wealth gap must be at the forefront of the civil rights agenda in the twenty-first century.”[iv]

The wage gap between white and Black workers is an important contributor to disparities in access to homeownership as well as just good quality housing, medical care, food access, and educational opportunities.[v] This wage differential narrowed between 1880, when “Blacks in the United States earned only about 34 percent of the income of whites,”[vi] to 51% by the 1950s.[vii] The gap narrowed further with improving labor rights for workers in the 1960s:“The black-white wage gap shrunk substantially from 1950 to 1980, and especially during the 1960s. Civil-rights laws and a decline in legally sanctioned racism most likely played some role. But the main reasons, Mr. Charles said, appear to have been trends that benefited all blue-collar workers, like strong unions and a rising minimum wage. Because black workers were disproportionately in blue-collar jobs, the general rise of incomes for the poor and middle class shrank the racial wage gap.”[viii]

Little has changed in the last 40 years. There remains a 38.8% gap in earnings today. According to the U.S. Census, the median income in 2020 was $45,870 for black households and $74,912 U.S. dollars for white, non-Hispanic families.[ix],[x] Across the South, these wage differentials are even more pronounced. For example, in Montgomery, Baton Rouge, Charlotte, and Memphis, Black households earn half the median income of white households. In some Southern cities the differential is even greater. For instance, in Atlanta, Georgia the Black median household income is $31,900 compared to the non-Hispanic white income of $96,065.[xi] As noted in national and state-level analysis by PayScale, Inc, “equal pay for equal work is not a reality for many people of color. When controlling for education, years of experience, occupation and other compensable factors, most men and women of color still earn less than white men…. these differences in annual earnings can amount to hundreds of thousands or even millions of dollars less for people of color over the course of their careers.”[xii]

Solution #1: Ensure equal pay protection for minorities & women

Reform(s) Needed:

  1. Reinstate the federal government’s collection of pay data from employers
  2. Ban the solicitation of applicant salary data in NC County and Municipal Governments
  3. Strengthen equal pay protections via federal Paycheck Fairness Act and the Raise the Wage Act

Solution #2: Increase access to credit & capital

Reform(s) Needed:

  1. Provide universal free basic checking accounts for unbanked individuals
  2. Addressing student loan debt and lower credit scores in minority communities
  3. Promote microlending (under $50k) for minority and women owned startups
  4. Expand resources for the Community Development Financial Institution (CDFI) Fund
  5. Promote “Baby Bonds” through the American Opportunity Accounts
  6. Hold commercial lenders accountable for making loans available to minorities and women at the same rates as others.

Solution #3: Stimulate growth entrepreneurship among minority owned businesses.

Reform(s) Needed:

  1. Increase the share of federal, state, and local contracts allocated to small, minority-owned businesses
  2. Provide wider training and technical assistance to HUB businesses to help them access HUB-related benefits
  3. Provide funding to technical assistance providers with experience supporting minorities and women (like NIMED).
  4. Promote minority business incubator and technical assistance programs by expanding Small Business Administration funding

Download the printable Research, Policy, and Impact Agenda Part 1 Advancing Economic Opportunities

[i] Bhutta, Neil, Andrew C. Chang, Lisa J. Dettling, and Joanne W. Hsu (2020). “Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances,” FEDS Notes. Board of Governors of the Federal Reserve System, DOI: 10.17016/2380-7172.2797.

[ii] Kriston McIntosh, Emily Moss, Ryan Nunn, and Jay Shambaugh. (2020). Examining the Black-white wealth gap. Up Front. The Brookings Institution.

[iii] Baradaran, Mehrsa. (2017). The Color of Money: Black Banks and the Racial Wealth Gap. Cambridge, Mass. Belknap Press, Harvard University Press.

[iv] Shapiro, Thomas. (2006). “Race, Homeownership and Wealth.” Journal of Law and Policy 20:53-74.

[v] National Academies of Sciences, Engineering, and Medicine; Health and Medicine Division; Board on Population Health and Public Health Practice; Committee on Community-Based Solutions to Promote Health Equity in the United States; Baciu A, Negussie Y, Geller A, et al. , editors. (2017). Communities in Action: Pathways to Health Equity. Washington (DC): National Academies Press (US); 11. 3, “The Root Causes of Health Inequity.” National Center for Biotechnology Information, U.S. National Library of Medicine

[vi] Ng, K., & Virts, N. (1993). “The Black-White Income Gap in 1880.” Agricultural History, 67(1), 1–15.

[vii] Leonhardt, David. (2020). “The Black-White Wage Gap Is as Big as It Was in 1950: Recent research indicates little progress since the Truman administration.” The New York Times.

[viii] Leonhardt, 2020.

[ix] Statista Research Department. (2021). “Median income of white, non-Hispanic private households in the United States from 1990 to 2020.” Statista.

[x] Statista Research Department. (2021). “Median income of black private households in the United States from 1990 to 2020.” Statista.

[xi] SimplyAnalytics (2021). “U.S. Census American Community Survey 2020 Current Estimates Data from SimplyAnalytics database.”

[xii] PayScale. (2021). “The Racial Wage Gap Persists in 2020.”