Today, the total racial wealth gap, the disparity between the wealth of Black and white Americans, is estimated to be $10.14 trillion. In addition, the median white household has a net worth 10 times that of the median Black household.
Wealth is defined “as the difference between what families own and what debt they owe.” Unfortunately, Black households hold a tiny fraction of national wealth. This is likely the result of centuries of federal and state policies that have systematically discriminated against Black Americans and inhibited their ability to build, maintain and pass on wealth. The historical injustices that have impeded Black Americans’ economic prosperity and access to financial education include: slavery, systematic inequality, employment discrimination and racist housing policies.
How do we change the wealth gap?
To start, the onus should not fall solely on the Black community, who often bear the burden of fixing centuries of racial inequity to close the gap. A report from Brookings shared that “even when Black people have advanced degrees, own their home, have high paying jobs and engage in other behaviors associated with asset building, their wealth is typically much lower than their white peers.”
The truth is there is not a one-size-fits-all solution. Many call for tax reform aimed at the wealthiest households. High and progressive taxation might include: reforms to income and estate taxation as well as taxes on wealth and inheritance. Some call for expanding financial literacy, education and job training resources for the African American community — which, according to an Annuity report, financial experts say is the key to achieving lifetime financial well-being.
Others believe it starts with radical and transformational investment from the government in Black households and communities. However, this call to action isn’t exclusive to the government. It requires more venture capitalists investing in Black entrepreneurs. While Black people comprise more than 13% of the U.S. population, Black entrepreneurs only receive 1.2 percent of the $147 billion of venture capital invested in U.S. startups.
What do Black female business leaders say about the wealth gap?
Here’s what Black female business leaders had to say about the wealth gap and the importance of getting more capital behind Black entrepreneurs.
On why she is passionate about closing the wealth gap:
“For entrepreneurs, you see a need, you fill a need. Realizing that I did not see a lot of men and women who looked like me in these entrepreneurial and startup incubators, that fueled something in me to break down this barrier. I am not going to allow, not only me, but my community to be left behind.”
— Erin Horne McKinney, Executive Vice President, Innovation & Strategy, AEO (Association for Enterprise Opportunity) and Founder, Black Female Founders (BFF)
“I am passionate about bridging the wealth gap because there’s a trillion dollar deficit. We are trying to build billionaires. I believe tech is one of the few sectors where it’s possible.”
— Christal Jackson, Founder, Mosaic Genius and Founder, Head and Heart Philanthropy
“When I think about women and people of color and this trend of the Great Resignation, it is impacting women of color to a great degree. When we look at the future of work, we have to talk about financial literacy and access to capital for entrepreneurs who are women of color.”
— Cleve Mesidor, Advisor, Blockchain Association
On the type of support needed for Black entrepreneurs:
“Don’t just get us in the door — help us make money. Some retailers, like Target, have marketing buy-ins that they suggest small businesses purchase once in the door. What small business has $20k to spend in one place on marketing? Offering free or low-cost marketing and advertising options, perhaps based on revenue, is a way to help these smaller brands succeed.”
— Ashley Rouse, founder and CEO of Trade Street Jam Co.
“Repeat business is key. Many vendors tend to order once and not return, signaling they may be initially supporting minority and female-owned businesses to check a box, not to build a long-term relationship.”
—Nikki Porcher, Founder of Buy From A Black Woman
On how Black women are changing the businesses world.
“Black women are the fastest-growing entrepreneurial group in the U.S., but Black women are getting less than 1% of dollars invested in companies. I don’t know why everyone isn’t investing in Black female founders. The trends show that the Black community tends to lead in setting trends and culture. It’s so surprising to see how many spaces have not been dominated yet. The table is not equitable and fair. So Black women have been creating their own table.”
— Erin Horne McKinney
“Black women are killing it. We have always been early influencers, adapters, innovators and leaders. We are creating differentiated value — innovation that is outside of what is already being done — that can be tied to dollars.”
— Regina Gwynn, Co-Founder, Black Women Talk Tech
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Stephanie, who affectionately goes by Stevie, is a walking paradox. A vagabond soul who craves adventure (she's crossed off 38 states on her travel list) but has a longing for a sense of home more than anything else. A lover of style, but adverse to shopping and price tags. A vegetarian with an appreciation for the smell of bacon. She has lived a number of lives from an event assistant to a creative writing teacher in juvenile halls to the former Online Managing Editor at Darling Magazine.
This article originally appeared in The Female Quotient. The Female Quotient (The FQ) is changing the equation and closing the gaps. The FQ’s diverse mix of live events, online forums, custom research, media, and corporate advisory services identifies challenges, surfaces effective strategies, forges powerful networks, and ultimately sparks measurable progress. Through its intensive engagement with women around the world, in multiple industries, and at every level, The FQ has a rare understanding of what is on the minds of working women and what specific needs must be addressed to confront existing inequalities. For more information, visit: www.thefemalequotient.com.