Snapshots of Black and White Disparities in Income, Wealth, Savings and More

Racial disparities have always existed with finances. With February being Black History Month, LendingTree researchers updated this compilation of data on income, wealth, savings, employment and credit to provide snapshots of Black and white economic inequality.

Here’s what we found.

Key findings

• The median income for Black households in 2022 was 32% lower than that of white households in the U.S. This is a modest improvement from the 35% gap in 2021.
• Full-time Black workers’ median weekly wages in the fourth quarter of 2023 were 16% lower than those of full-time white workers. As of March 2023, full-time Black workers in the agriculture industry made an average of 43 cents for every dollar their full-time white colleagues earned — the lowest among the sectors tracked. Next was transportation and utilities, where Black workers made an average of 68 cents for every dollar earned by their white colleagues.
• Black Americans had $4.9 trillion in wealth as of the third quarter of 2023, compared with the $120.4 trillion held by white Americans. White Americans held 85% of the country’s wealth, while Black Americans held 4%, despite representing 59% and 14% of the population, respectively.
• About 2 in 3 Black adults said they were doing OK financially as of 2022. 64% of Black adults said this about their finances, down from 68% in 2021. That compares with 77% of white adults in 2022, down from 81% the year before.
• Nearly double the rate of Black adults said they or another household member suffered a loss of employment income late in 2023. 17% of Black adults said this in October 2023 about the prior four weeks, versus 9% of white adults.
• Black adults with lower incomes were far more likely to be denied credit or approved for less than requested than their white counterparts in 2022. 58% of Black adults with a family income of less than $50,000 who applied for credit in the prior 12 months were denied or approved for less than requested, compared with 39% of white adults in the same income group.

Income

The Black and white income gap across the U.S. has remained substantial since 1970:

• 1970: The median income for Black households was $30,400, according to the Pew Research Center. That’s compared with $54,100 for white households — a difference of $23,700, or 44%.
• 2022: The median income for Black households was $52,860, according to the U.S. Census Bureau. That’s compared with $77,250 for white households — a difference of $24,390, or 32%.

Household income nationally (2022)

This compares to a 35% gap in median household incomes in 2021. The median income for Black households was $48,297 that year, compared with $74,262 for white households.

Average earnings vary widely by industry and race. For example, Census Bureau data shows that full-time Black workers in the agriculture industry earned $559 a week as of March 2023, while full-time white workers in that same industry earned $1,314 a week. That means Black agriculture workers made 43 cents for every dollar earned by their white colleagues. The next worst industry was transportation and utilities, where Black workers made an average of 68 cents for every dollar earned by their white colleagues.

Public administration was the only industry tracked in which the weekly wages for Black workers were almost as high as those for white workers — $1,416 versus $1,456.

How weekly wages vary by industry and race

Wealth

Median net worth for Black and white families continues to fluctuate, according to Federal Reserve Survey of Consumer Finances data, though the gap remains massive:

• Black and white families saw the same 28% drop in median net worth from 2007 to 2010 amid the Great Recession of 2007 to 2009. The median net worth for Black families went from $30,050 to $21,720, while the median net worth for white families went from $245,450 to $177,210.
• Between 2010 and 2013, the median net worth for Black families saw another significant decrease (23%) to $16,650, while white families’ net worth rebounded 2% to $180,620.
• Between 2013 and 2016, though, the median net worth for Black families dramatically increased by 27% to $21,150. It jumped 17% (to $210,910) for white families.
• That growth continued between 2016 and 2019, with median net worth rising 32% (to $27,940) for Black families and 4% (to $219,210) for white families.
• Between 2019 and 2022, the median net worth for Black families skyrocketed by 58% to $44,100, while the median net worth for white families spiked by 30% to $284,310.

That said, the difference in median net worth among Black and white families increased from $155,490 in 2010 to $240,210 in 2022 after peaking in the lead-up to the Great Recession.

It’s good there’s been some median wealth growth among Black families, says LendingTree chief credit analyst Matt Schulz, but he notes that data may not paint the whole picture.

In other words, if you used to make $20,000 and get a $5,000 raise, it marks a far bigger percentage increase than if you make $100,000 and get a $5,000 raise. Either way, Schulz says a $5,000 raise is great, but it’s likely much more significant to the person who started with the smaller income.

The data suggests similarly. In fact, Black families’ median and average net worth in 2022 was considerably lower than that of white families.

Black Americans had far less wealth as of the third quarter of 2023, according to the Federal Reserve. Black Americans held 4% — or $4.9 trillion — of the country’s wealth, versus 85% — or $120.4 trillion — among white Americans. This doesn’t align with the population, according to the Census Bureau. Black and white Americans represent 14% and 59% of the population, respectively.

Savings

In 2022, 13% of Black adults were unbanked, according to the Federal Reserve, while just 3% of white adults said the same. (Unbanked refers to respondents or their spouses without a checking, savings or money market account.)

Separately, 35% of Black families had retirement accounts — including 401(k) and individual retirement accounts — in 2022, while 62% of white families had them.

According to the Federal Reserve Board in 2022, 60% of white adults had three months of emergency savings, compared with 40% of Black adults.

Overall, 64% of Black adults said as of 2022 that they were doing OK financially, according to the Federal Reserve, down from 68% the previous year and up from 53% in 2013. Meanwhile, 77% of white adults said they were OK financially, down from 81% in 2021 and up from 65% in 2013.

“For many years, savings accounts gave savers minuscule returns,” he says. “That’s not the case anymore. While the Fed’s rate increases have been brutal on those with credit card debt, they’ve been amazing for savers. You can find savings accounts with APYs of 5% or higher, though you’ll likely have to look beyond the traditional megabanks to find them.”

Employment

Black adults reported feeling the effects of employment income loss more than white adults. Overall, 17% of Black adults in October 2023 said they or another household member suffered a loss of employment income in the past four weeks, according to Census Bureau data, while 9% of white adults said the same.

It’s not the first time something like this has happened, either. In fact, minorities — according to research — have historically been affected by a “last-hired, first-fired” phenomenon. In other words, racial and ethnic minority groups during an economic downturn are typically among the first laid off. During an economic recovery, however, they’re among the last hired.

That’s had an impact on the unemployment disparity, too. As of December 2023, the unemployment rate for white men and women ages 20 and older was 3.3% and 3.0%, respectively, according to the BLS. Meanwhile, it was 4.6% and 4.4%, respectively, for Black men and women in the same age group.

Credit

In 2022, 87% of white adults had a credit card, while only 71% of Black adults had one.

According to Schulz, the fact that Black applicants are likely to have lower incomes may be holding them back from having higher credit limits.

“When it comes to getting approved for less than requested, there’s no question that income levels play a big role,” he says. “While your income level isn’t factored into your credit score, it’s considered when, for example, banks decide how much credit to extend. People with higher incomes may receive higher limits on credit cards than those with lower incomes, all other things being equal.”

“Low-interest personal loans are amazing,” he says. “They can not only help you save a ton of money in interest payments, but they can also help you streamline your to-do list. Use a single personal loan to pay off several smaller debts so you’ll only have one debt payment to manage instead of wrestling with several simultaneously.”

Sources

• U.S. Census Bureau Current Population Survey (CPS) Annual Social and Economic (ASEC) Supplement
• U.S. Bureau of Labor Statistics (BLS)
• Federal Reserve Distributional Financial Accounts
• Federal Reserve Economic Well-Being of U.S. Households survey
• Census Bureau Household Pulse Survey
• Pew Research Center
• Federal Reserve Survey of Consumer Finances
• Federal Reserve Board Survey of Household Economics and Decisionmaking (SHED)