Growing up, LaToya Council never felt like she was part of the middle class. Sure, her mom worked a stable nursing job. And, yes, her family took trips out of the country. But in rural North Carolina, where her grandparents had pulled themselves up from sharecropping to owning a local grocery store, her family’s financial well-being felt less than secure.

By some measures, Council was middle class. But “middle class” is a surprisingly subjective term in the United States. And for Black families, defining who is middle class is even more difficult. 

“If we think about it in an objective way, the markers that are typically used to define middle class are education, income, occupation, and wealth,” said Kris Marsh, professor, sociologist, and demographer at the University of Maryland. But individually, these markers cannot paint a full picture of the middle class. 

For one: what cutoffs do you use? A 2018 study of income found that—depending on the measure—households with annual incomes anywhere from $46,000 to $230,000 could reasonably be called middle class. Large income gaps between racial and ethnic groups mean Black families are less likely to meet an income-based definition of middle class, even with its broad range. And income does not necessarily guarantee financial stability—especially for Black families who are less likely than white families to have savings or familial assets to supplement their income than white families.

Further complicating the definition, the cost and future value of typical measures of middle-class status, such as a college degree and homeownership, have changed over time. That is why some researchers, including LaToya Council, now an assistant professor of sociology at Lehigh University, use a broader definition.

Rather than thinking about family financial security as a snapshot based on income, these researchers consider how people fare over time and how that can influence different experiences of class by race and ethnicity. For Council, being Black middle class means having economic security for generations.

Some incomes and education levels might guarantee that white families stay in the middle class, but they are less likely to create long-term financial stability for Black families. Given the extensive legacy of enslavement, sharecropping, residential and school segregation, mass incarceration, and continued everyday racial discrimination in policies and practices, including but not limited to hiring and home appraisals, “talking about [middle-class status] and not including that historical context is very dangerous,” Council said.

So how can we define the Black middle class and the role that wealth plays in conceptualizing middle-classness? To answer this question, the Urban Institute launched the Black Family Thriving Initiative. We find that wealth—the full sum of assets that a person can draw on—can paint a more accurate, holistic picture of financial security. Wealth can allow families to pursue educational opportunities, buy a home, and most importantly, pass on financial security to the next generation. But racial wealth gaps between white and Black Americans have persisted almost unchanged for decades.

To show why wealth is the key to defining the Black middle class, we spoke with experts about how to accurately conceptualize the Black middle class and with middle-class Black Americans about the opportunities they have to build wealth and barriers they continue to face.

How have Black Americans traditionally entered the middle class?

A college education is, and has been for decades, the entry point to the middle class. A college degree usually leads to a huge income boost for new graduates and offers a professional network that can support a career long term. Data show that college graduates earn nearly twice as much as those without a college degree.

For Courtney Brunson, who grew up on the west side of Detroit, a college degree was essential for entering the middle class. His dad passed away from kidney failure when he was 10, which led to his mom having to “break her neck” to take care of him and his brother. In the summers, Brunson worked for his grandfather’s carpentry business to help support the family.

To get the life he wanted—a house in the suburbs with more trees and fewer sirens—Brunson knew he had to go to college. When the time came, he filled out the federal financial aid forms on his own and earned a spot at Michigan State University. Although his education paid off, and he now owns a house in the suburbs with his wife and children, it came with a catch.

“Combined, me and my wife both have a lot of student loans,” Brunson said. “We probably can buy a nice house with [our] student loan debt.”

The student loan debt crisis has undermined the return on investment on college education, especially for Black people. More Black graduates have student debt: in 2022, 36 percent of Black graduates had some student debt, compared with 20 percent of white graduates. Furthermore, Black graduates carry more student debt than white graduates from the moment they leave college. And this debt compounds because of interest, with the Black-white debt gap tripling four years after graduation.

As a result, it takes Black graduates—particularly Black women—longer to pay off student debt, with a greater likelihood of defaulting at some point. Unsurprisingly, having a larger debt burden diminishes the benefits that a college degree can offer and hinders the ability to save and invest for the future.

Black graduates may earn higher incomes, but they often have fewer opportunities in the job market than white graduates. Urban research has shown that even when Black and white workers have the same educational attainment, Black workers are more likely to earn less and work in lower-quality jobs. And a recent Supreme Court decision mandating race-neutral admissions systems in higher education could lead to less diverse college cohorts and less access to selective schools for Black Americans.

Ultimately, for Black households seeking to enter the middle class, “education is not a panacea,” said Fenaba Addo, an associate professor of public policy specializing in debt, wealth inequality, and higher education at the University of North Carolina. She explained that “the returns on assets tend to be higher for white households, whereas the scarring effects of debt tend to hit Black households harder.”

The same issue extends to another common entry point into the middle class: homeownership. Amid the country’s current housing crisis, homeownership remains out of reach for millions of Americans, with rising unaffordability disproportionately hurting Black Americans.

“We know that becoming middle class with homeownership is a lot harder than it was a decade or two decades ago,” Council said. This is true particularly for people in their 20s and 30s today. That difficulty not only removes a key avenue for wealth-building, but it can also erode wealth over generations as the children of middle-class parents can’t “get what they grew up with,” she explained.

Black households own homes at a rate nearly 30 percentage points lower than white households

In 2021, Black households’ homeownership rate lagged behind that of white households by nearly 30 percentage points, in part because Black homebuyers are less likely to receive familial assistance than their white counterparts. Furthermore, homes in predominantly Black neighborhoods with similar socioeconomic status and amenities are appraised nearly $371,000 less than comparable homes in white neighborhoods.

While an education, a job, or a home can each connote a sense of comfort and stability, these pathways are less reliable for younger generations. Therefore, achieving—and maintaining—middle-class status necessitates different strategies and a broader understanding of what financial stability means.

What helps Black people maintain middle-class status?

For many Americans, the sign that they had officially entered the middle class is a sense of comfort in knowing that they have savings to get through emergencies; can put away money for retirement; and, more than anything, are able to leave something for their children and grandchildren.

That’s why Carla Barbour and her husband set an aggressive goal in 2016: they were going to be debt-free. Although the couple had four degrees, two high-paying jobs, and a home, Barbour felt as if their debt were keeping her family’s hard-won comfort from being truly secure. So the pair listed all their debt—from smallest (credit cards) to largest (student loans)—and got to work.

“We got used to living below our means, got used to just sacrificing on things,” Barbour said. By paying off so much of their debt, she explained, they created opportunities to invest and put money away for emergencies and their daughter’s college fund.

This aspect of leaving something for the next generation, or intergenerational wealth, has only recently been included in the definition of middle class. Traditionally, research had focused more on income, but this narrow focus ignored how some people can draw on family wealth—such as a parent’s assets—to get through times when their incomes are low or to make progress on their own wealth-building goals.

Research from the Black Family Thriving Initiative shows how wealth can ensure families are able to maintain and transfer middle-class status to their children, regardless of income. “Wealth opens a broader set of opportunities less dependent on the existing market forces,” said Thomas Shapiro, research professor of law and sociology at Brandeis University, who has studied the Black middle class since the 1990s.

Currently, Black Americans are less likely to have a will than white Americans, with 18 percent saying they felt they didn’t have enough assets for a will. Even among homeowners—people who have an asset to pass along—Black Americans are less likely to have a will or trust. This shows that building a nest egg and preparing to transfer these assets to their children takes time, planning, and access to certain knowledge and tools.

Carla Barbour and her husband, for instance, work for the federal government and their jobs come with a pension plan. For Barbour, this means that after she has worked at the Department of Veterans Affairs for 30 years, she can retire and receive a percentage of her previous salary each month, in addition to the savings plan that she also contributes to with each paycheck.

But many Black families do not have access to such savings and retirement benefits. In 2022, only 54 percent of full-time Black workers had an employer-sponsored retirement plan. As a result, Black families had median retirement savings of $39,000, far less than the $100,000 median for white families. Research shows that families with lower retirement savings are more likely to depend on safety net benefits after retirement and less likely to have money to leave to their families.

Black families had median retirement savings of $39,000, less than half the savings of the median white family.

Other job protections are also necessary to nurture and grow wealth. Research from the Center for American Progress find that a typical worker covered by a union had twice the wealth of a typical nonunion worker. Unionized workers are also more likely to have employer-sponsored retirement plans (PDF).

Because Black Americans are less likely to have access to these benefits and protections, it’s common among Black families to rely on someone in their network who has achieved a greater degree of financial security as a resource when they need help. While this type of social and financial support is helpful, researchers generally see this type of resource sharing as counterproductive.

During his research on Black wealth, Shapiro often heard of people who had helped their niece pay for college, their nephew with a car payment, or their goddaughter with a medical bill. He explained that while most people would generally approve of these acts of generosity, economists would see them as “wasted wealth” because these acts don’t directly build wealth for the families providing the support.

Maintaining the Black middle class, therefore, requires a new way of supplementing these familial based financial supports. Kris Marsh, the University of Maryland sociologist, believes that effort should be made to redefine what constitutes a family in the tax code and other policies. For many, including Marsh, caregiver responsibilities of “chosen family” do not come with the same financial benefits—such as familial leave—that relatives by blood or marriage generally have.

“I think when we use the word family, we can be discriminating in plain sight and don’t even really think about it,” Marsh said. By limiting who qualifies as family, policies that govern the passage of wealth from one generation to another can often exclude people from building up a broader community comprised of extended family and chosen kin.

Ultimately, Black Americans need access to mechanisms that allow for financial security for themselves, their families, and their future generations. Just entering the middle class does not protect Black households from economic precarity. In fact, more than most other racial and ethnic groups, Black households are at risk of falling out of the middle class.

How can policymakers mitigate the risks of falling out of the middle class?

Neshell Robinson doesn’t have to imagine what could put her at risk of falling out of the middle class. She can quantify it: 28 days, 10 surgeries, 2 skin grafts, 1 car accident, and tens of thousands of dollars in medical bills. For many Americans, these things would mean financial disaster. But not for Robinson.

“To be honest, I have learned what [being] financially secure has meant,” Robinson said, about four months after her accident. “I have not lacked anything, so that has shown me that I have planned for my financial future, and it’s been wonderful.”

Robinson’s story has a happy ending. However, for thousands of Americans, medical debt can destroy a lifetime of work. More than 4 in 10 adults nationwide have some form of medical debt, but there’s a large gap between white and Black adults. About 56 percent of Black adults have health care debt compared with 37 percent of white adults. This discrepancy leads to Black adults being roughly twice as likely to be denied care because of debt or to have to take out a loan or move in with friends and family.

Medical debt isn’t the only pervasive risk a family faces of falling out of middle-class status. So much of wealth-building depends on financial services and investing opportunities, but Black Americans have long endured a separate and unequal banking system built on a legacy of racism and segregation, from sharecropping after emancipation to present-day discrimination in access to financial services and mortgage lending.

This unfair system has pushed many Black Americans to rely on alternative financial providers and investment pathways. Black-owned banks have filled some of the gaps, but the capacity and number of these institutions are declining. In recent years, a disproportionate share of Black people have turned to cryptocurrency as a wealth-building opportunity, partially because it’s adjacent to the mainstream system and potentially offers a faster way to build wealth. But crypto is a lightly regulated and volatile venture and has yet to prove that it can be a consistent pathway toward financial security.

Without access to trustworthy and effective banking services and with other systemic factors influencing access to opportunities (e.g., discriminatory housing practices that create lower-valued homes in segregated neighborhoods, inequitable access to high-quality educational and employment opportunities, etc.), Black families continually face the risk of losing wealth they have amassed. While many white families can turn to their parents or grandparents as a safety net in unexpected times of crises, Black families are less likely to have access to generational wealth, meaning that a job loss or an unexpected bill or expense can be catastrophic.

To Robinson, this difference illustrates how being in the middle class can sometimes offer Black people a “false safety net,” allowing them to live comfortably but not fully without financial concern.

“That fragility is not because they aren’t doing the very best they can,” Marsh said, based on her research. “It’s because we look at the generation before them and the generation before that and before that who were actually property, so they didn’t own property. We cannot have an ahistorical conversation when we talk about the Black middle class.”

American history shows that intentional policies and practices created the white middle class at the expense of the Black middle class. Therefore, moving forward, intentional policies and practices are needed to cultivate the Black middle class and rectify the harms of that history.

Black Family Thriving Initiative’s 2024 study of Black middle-class families shows that improvements to traditional middle-class pathways—such as downpayment assistance for first-, second-, and third-time homeowners and policies to increase college affordability—as well as increased protections against workplace discrimination would help solidify the Black middle class.

New research from the Urban Institute has also pointed toward baby bonds and other guaranteed income programs as ways to jump-start long-term wealth. Policymakers can learn from these programs to create a new reparations strategy that addresses the discrimination, exclusion, and racial violence inflicted on generations of Black Americans.

No matter the specific program, policymakers and other leaders must keep wealth-building at the forefront of their work to improve the lives of Black families. Cultivating a strong and resilient Black middle class necessitates more than just providing equal access to degrees, jobs, and homebuying, it requires a concentrated effort to build, maintain, and protect Black familial wealth now and for future generations.

About

The Black Family Thriving Initiative aims to amplify the intergenerational strengths of Black people and families and to reframe the narrative of being Black and middle class in America. It also aims to describe the distinct challenges Black families, specifically Black middle-class families, face in achieving the American dream for themselves and their children.

PROJECT CREDITS

This feature was funded by the Ballmer Group and MetLife Foundation. We are grateful to them and to all our funders, who make it possible for Urban to advance its mission. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. Funders do not determine research findings or the insights and recommendations of our experts. More information on our funding principles is available here. Read our terms of service here.

RESEARCH LesLeigh D. Ford, Claire Cusella, Leandra Lacy, Nyla Holland

DESIGN Christina Baird

DEVELOPMENT Jerry Ta, Lydia Nguyen

EDITING Sujin Hong

WRITING Wesley Jenkins

VIDEOGRAPHY Tissue