Jun 18, 2021 - Economy

The enduring wealth gap

Illustration of the Juneteenth flag made from U.S. money

Illustration: Annelise Capossela/Axios

As we prepare for tomorrow's federal Juneteenth holiday, commemorating the emancipation of enslaved Americans in Texas, our economy remains marred by the legacy of slavery and subsequent discrimination.

The big picture: This is particularly evident in the enduring wealth gap between Black and white Americans, and in how Black Americans broadly participate in the U.S. economy.

Inside the numbers: The median annual wage for Black workers is 30% lower than it is for white workers, according to a new report from the McKinsey Global Institute and its Institute for Black Economic Mobility. Were wages to be equal, Black Americans would have around $220 billion of additional income each year.

  • Shelley Stewart III, who leads McKinsey's Institute for Black Economic Mobility, tells the Axios Re:Cap podcast: "We looked at Black Americans as residents. We looked at Black Americans as workers to understand representation and wage gaps. We looked at Black Americans as business owners, as savers and investors, and finally as consumers."
  • In each case, there was a significant financial gap between Black and white Americans, built on decades of discrimination across generations, to the persistent detriment of Black economy stability, mobility and sustainability.

Responsibility: The report argues that both the public and private sectors have intersecting roles to play in closing the wealth gap and addressing other structural inequities.

  • It didn't address the issue of reparations, but Stewart did tell Axios Re:Cap: "Significant investment is needed into Black communities. And that's going to be investment through a combination of the public sector, as well as the private sector if we're going to really make a difference on wealth. I'll let others decide the exact form of that investment."
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