Economics of Systemic Racism

Photo by Maria Oswalt on Unsplash

The Racial Wealth Gap

  • African Americans make up approximately 10 percent of the wealth owned by white America. In 2016, the median wealth for non-retired Black households 25 years old and older was less than one-tenth that of similarly situated white households.[1]
  • The Black-white wealth gap has not recovered from the Great Recession. In 2007, immediately before the Great Recession, the median wealth of Blacks was nearly 14 percent that of whites. Although Black wealth increased at a faster rate than white wealth in 2016, Blacks still owned less than 10 percent of the wealth owned by whites at the median.[2]
  • The wealth gap persists regardless of households’ education, marital status, age, or income. For instance, the median wealth for Black households with a college degree was about 70 percent of the median wealth for white households without a college degree. The gap worsens as households grow older.[3]

Systemic Obstacles



Photo by National Geographic: This 1939 map of Los Angeles ranks neighborhoods by desirability, as determined by the Home Owners’ Loan Corporation (HOLC). The scale from most to least desirable goes from green to blue to yellow to red. HOLC maps generally rated poorer or less white neighborhoods as less desirable.



Photo by New York City Department of Health and Mental Hygiene

Corporate America’s Current Response

Photo by Nike’s ‘Don’t Do It’ ad.

Wealth Transfer

Potential Systemic Solutions

Building savings

  • Expand housing and home ownership among Black families.
  • Improve access to retirement savings, expand opportunities for entrepreneurship.

Reducing debt load and cost

  • Protect the Consumer Financial Protection Bureau (CFPB), which is an agency of the United States government that promotes fairness and transparency for mortgages, credit cards, and other consumer financial products and services.
  • Improve access to banking, improve college affordability.

Improving income and employment

  • Improve opportunities for collective bargaining, raise the minimum wage.
  • Adopt fair chance hiring policies.

Final Thoughts: Continuity and Change

Photo by British Library on Unsplash


  1. The average non-retired African American household 25 years old and older had only 11 percent the wealth of the average non-retired white household 25 years or older in 2016. The racial wealth gaps differ little when considering the entire population.
  2. Authors’ calculations based on data in survey year 2016 from Board of Governors of the Federal Reserve System, “Survey of Consumer Finances (SCF),” available at (last accessed January 2018). See also Table 1.
  3. Hanks, Angela, et al. “Systematic Inequality.” Center for American Progress, 21 Feb. 2018,
  4. Economic Policy Institute. “Black Workers Endure Persistent Racial Disparities In Employment Outcomes.” Accessed Feb. 5, 2020.
  5. Abdul Latif Jameel Poverty Action Lab. “Discrimination in the Job Market in the United States.” Accessed Feb. 5, 2020.
  6. Marks Jarvis, Gail. “Why Black Homeownership Rates Lag Even as the Housing Market Recovers.”, Chicago Tribune, 3 June 2018,
  7. Fiel, Jeremy E. “Decomposing School Resegregation: Social Closure, Racial Imbalance, and Racial Isolation.” American Sociological Review. no. 5 (2013): 1–21. (accessed September 24, 2013).
  8. Duncan, Arne. “Civil Rights Data Collection.” Office for Civil Rights, 21 Mar. 2014,
  9. Goff, Phillip Atiba, et al. “The Essence of Innocence: Consequences of Dehumanizing Black Children.” American Psychological Association, 2014,
  10. staff, Science X. “‘Unconscious’ Racial Bias among Doctors Linked to Poor Communication with Patients.” Medical Xpress — Medical Research Advances and Health News, Medical Xpress, 15 Mar. 2012,–03-unconscious-racial-bias-doctors-linked.html.
  11. Agency for Healthcare Research and Quality. “National Healthcare Quality and Disparities Report.” Accessed Feb. 5, 2020.
  12. “Michigan Data.” Coronavirus — Michigan Data, 8 June 2020,,9753,7-406-98163_98173---,00.html.
  13. “COVID-19 Statistics.” COVID-19 Statistics | IDPH, 8 June 2020,
  14. Team, WDSU Digital, and Hearst Television Inc. “‘Big Disparity’: 70% of Louisiana’s Coronavirus Deaths Are African Americans, Governor Says.” WDSU, WDSU, 6 Apr. 2020, 9:02 PM,
  15. Rogers, Taylor Nicole. “BET Founder Robert Johnson Calls for $14 Trillion of Reparations for Slavery.” CNBC, CNBC, 1 June 2020,




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Matthew Lim

student w/ a passion for finance and other things

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