Black Americans are concentrated in the South both because and in spite of the region’s history. In 1900, 90 percent of Black people in the US lived in the South. Following Emancipation, many Black people were in deep poverty and lacked the financial resources or social capital needed to relocate to the North or West, and they had family and community connections in the South. Slavery was gradually replaced with a new system of economic exploitation: sharecropping, tenant farming, and debt peonage. Then, the Great Migration started in the early 1900s, which saw millions head north through the 1970s seeking safety, jobs, and a chance for a better future.

To achieve that better future, Black Americans needed to pursue better jobs and educational opportunities, and at that time, the North offered more opportunity than the South.In the US, wealth is key to generational prosperity. Whether it’s a home (PDF), an investment account, or a family trust, assets that can increase in value over time allow for one generation to build wealth and pass it on to the next. Black families—particularly Southern Black families—have historically had less access to these resources.

But in recent years, Southern economies have grown faster than the national average, and many Southern cities have seen a significant increase in Black entrepreneurs because of a higher share of Black residents. However, Black workers and families still face economic challenges in the South and across the country. Nationwide, white families have an average wealth six times that of Black families, with the gap growing still. But the economic and demographic realities of the South mean this gap is narrower there than in any other part of the country.

How have Black families in the South built wealth?

While Black families nationwide still have much lower average wealth than white families, Black families in the South have fared slightly better, which can be partially attributed to regional differences. For one, the median white family’s wealth is lower in the South than in other parts of the country because of the high rates of rural poverty. And two, the cost of living in many Southern states is lower, meaning many families have more opportunity to purchase a home or invest.

But these macroeconomic forces cannot fully explain the gains Black families in the South have made. Experts we spoke with also pointed to the following:

• Homeownership. Owning a home, which generally gains value and can be passed from generation to generation, has long represented a key wealth-building pathway. In the South, lower median home prices have enabled greater homeownership rates for Black families. Nationally, 38 percent of Black families own homes, whereas 47 percent of Southern Black families own homes, with states like Mississippi (54 percent), South Carolina (54 percent), and Maryland (53 percent) having the highest Black homeownership rates in the country.
• Community and connection. Because so many Black Americans are concentrated in the South, there’s often a greater sense of Black community in Southern states. Through these networks, families can enable each other to build wealth by buying homes, starting businesses, and offering jobs. As Steven Brown, director of insights and evidence for the Aspen Institute’s Financial Security Program said, “That rich sense of networks and the rich economic diversity you have in the South… provide more opportunity for people to find both the resources and financial resources to support their family.”
• Job opportunities. In recent years, the South’s economy has grown significantly, with major cities like Raleigh, Austin, Atlanta, and Nashville experiencing population and job growth. As a result, many Black people have moved back to the South and started businesses. The rate of Black-owned small businesses in the South (4.8 percent) nearly doubles the national rate (2.9 percent), and some states like Maryland (9.3 percent) and Georgia (8.2 percent) far outpace it. One study estimates that a 10 percent increase in business ownership among Black Americans increases their average wealth by $50,000.

How local leaders can continue to support wealth building

Despite these gains, the racial wealth gap in the South and nationwide is still growing. Black families—and all Southern families—need support.

Student loan debt, property loss across generations, wage disparities, and more keep Black families in the South from achieving the same level of financial stability as many white families, or even Black families in other parts of the country.

Employers, financial institutions, community organizations, and policymakers all have a role to play in breaking down the barriers to long-term wealth building. To do so, these local and state leaders can:

• address student loan debt through forgiveness or more-manageable repayment plans,
• offer fair and livable wages,
• support employment benefits like subsidized child care and retirement accounts, and
• make savings accounts and credit lines more accessible.

Additionally, more research on wealth building and who makes up the middle class is needed. The Black Family Thriving Initiative seeks to fill these gaps and ultimately improve Black American’s ability to establish and sustain wealth.