In this report, we document the correlation between becoming a professional (defined in this report as earning a bachelor’s degree or more or owning a business) and wealth accumulation. This report looks at two paths to becoming a professional—educational attainment and entrepreneurship—and finds that both coincide with greater wealth compared with nonprofessionals. These improved wealth outcomes reflect greater human capital investment and better labor market outcomes. These outcomes hold for both Black and white professionals compared with nonprofessionals. But at each step toward becoming a professional and building wealth, Black people typically have worse outcomes than white people. And even when achieved, net worth for the median Black professional lags that of white professionals.

Why This Matters

Occupational outcomes are a critical component of wealth-building potential; both educational attainment and entrepreneurship can improve short- and long-term financial outcomes for Black professionals. Entrepreneurship and education function as entryways into the US economy, especially for those who do not have generational wealth. But racial differences in occupational outcomes in part reflect a history of discrimination. Looking forward, artificial intelligence (AI) has the potential to widen racial gaps in professionalism and wealth building. But with the right supports, AI can work for all racial and ethnic groups.

What We Found

Financial outcomes for Black professionals remain marginal compared with the overall professional population and particularly when compared with white professionals. Disparities Black professionals face stem in part from different experiences becoming professionals.

• Black-owned businesses tend to be smaller and have less revenue relative to payroll.
• Black students are less likely to finish a degree on time, and they exit college with more debt.

These trends are evidence of barriers to entry for becoming a professional, with access to crucial prerequisites such as debt (both student loan and business) or generational wealth being less prevalent for Black individuals. But the disparities also point to evidence of disparate treatment, potentially linked to ongoing workforce discrimination.

How We Did It

We use data from various public sources that offer detailed information on the cross-section of race and ethnicity and education, entrepreneurship, income, and wealth.

• For data on income and wealth by professional status and race, we use the latest Survey of Consumer Finances and the US Census Bureau’s Current Population Survey.
• For detailed information on educational attainment, we use data from the National Center for Education Statistics via the Urban Institute’s Education Data Portal.
• Data on business ownership and entrepreneurship are sourced from the Bureau of Labor Statistics and the Census Bureau’s Annual Business Survey, formerly known as the Annual Survey of Entrepreneurs. The Annual Business Survey provides information on select economic and demographic characteristics for businesses and business owners.

These data are put together to create a novel collection of descriptive statistics on the state of the Black professional.