An estimated 3.5 million households, or 19 percent of Black American families, have a negative net worth because of systemic racism, which has hampered their ability to build wealth, according to a new McKinsey & Company study released Thursday (June17).
According to CBSN, the report indicates not only 19 percent of Black families have a negative net worth compared to 9 percent of white families with similar net worths, but there’s a 220 billion wage gap between black and white workers. The gap between the two is one of many that was found during research but also has different connections to other racial disparities Black Americans face in medicine, housing, and even the judicial system.
“We took a holistic look at the black experience through the different roles and found out the disparities are everywhere,” says Shelley Stewart III, leader of the Institute for Black Economic Mobility at McKinsey & Company. “We need more Black lawyers, Black teachers, and Black doctors...a significant part of the gap can be closed off with those three positions. ”
The report also identifies the wage gap shared between non-black-owned and black-owned small businesses, concluding that the gaps between the two range in the 1.6 trillion.
Although the data shows much of the obstacles Black Americans face financially, the research company has found possible solutions to how these gaps can be closed off. “We have got to re-evaluate our definition of diversity within the workplace,” says Stewart III, “Really, it starts at the front-end with recruiting, progression, [and] pay equity.” Stewart also mentioned that holding lending companies accountable for their practices could affect the net worth of Black Americans in the long run.
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