Wealth accrual for Black women and their families has been an uphill climb from the start. For the first two-and-a-half centuries of US history, Black women generally weren’t paid at all. For at least the next 100 years, Jim Crow policies, like redlining, suppressed their ability to accrue wealth.

Since the police murder of George Floyd in 2020 and continuing national racial reckoning, many organizations have made unprecedented commitments to advancing racial equity in various areas, including wealth. However, the racial gap in wealth for Black women shows no signs of abating. 

In May 2022, Goldman Sachs and the Urban Institute launched the One Million Black Women (OMBW) Research Partnership to elevate the research of scholars of color working to inform ways to narrow the racial wealth gap for Black women. Since its inception, four scholars from Historically Black Colleges and Universities (HBCUs) were selected to join the inaugural learning community cohort.

This first cohort (the second starts in April 2023) comprises Angelino Viceisza, Carolette Norwood, Danielle Dickens, and Taura Taylor, who, together, bring a mix of academic perspectives in psychology, sociology, criminology, and economics. Their research findings point to four solutions that address the root causes of the gap and could help ensure Black women have an equal chance to build wealth.

How can we solve the wealth gap?

Research shows Black women face a 90 percent wealth gap, and the earnings gap drives two-thirds of this divide. Black women lose $907,680 over a 40-year career because of the earnings gap. But we know the well-being of Black women won’t improve unless both the earnings and wealth gap are addressed. According to Dickens, “historical and ongoing structural factors” drive racial disparities in earnings and wealth for Black women.

To identify solutions to fully address the systemic nature of today’s racial wealth gap, Urban hosted a convening in January, during which each OMBW scholar discussed their evidence frameworks. They offered four evidence-based ways federal and local policymakers and employers could help narrow the racial wealth gap for Black women.

1. Understand and address the role of intersectionality in salary negotiations

It is well documented that race and gender, independently, can affect an employee’s paycheck, but when racism and sexism intersect, Black women’s prospects for fair pay worsen. Dickens and colleagues found that when racism and sexism overlap, the “double jeopardy” can hamper pay negotiation and reduce paychecks for Black women. 

Their findings show how multiple oppressions—like an employer prejudging a Black woman’s disposition, or other racial and gender stereotyping—can create disadvantages in hiring, interviewing, and pay for Black women. As one study participant said, Black women are “working against a narrative that has denigrated the value of a Black woman.” 

To address the earnings gap for Black women, policymakers could consider providing greater support for federal policies that end wage discrimination, such as through the Paycheck Fairness Act, and state-level policies that mandate salary history bans, paid leave, and salary transparency. Employers could increase efforts to intentionally promote employment opportunities to Black women jobseekers.

2. Align fringe benefits and work-life supports with the needs of Black women and their families

Alone, increasing Black women’s earnings isn’t enough to minimize their economic vulnerabilities. Taylor and colleagues find that Black women stand to benefit when they, their partners, and their extended family members all have access to three core areas of fringe benefits and policies: universal work-life balance supports, such as flexible work schedules, remote work options, paid time off, mental health days, and family medical leave; holistic dependent care resources and family discounts; and legacy benefits, such as employee-share ownership, tuition reimbursement, pension, credit union access, and financial, retirement, and legal counseling. Taylor’s report suggests employers can adopt such policies to advance a proactive wealth-building agenda while supporting similar efforts at the state and local level.

3. Address causal factors tied to retirement preparedness

Black women have the highest labor force participation rates among women overall but face a significant gap in retirement readiness. Viceisza identified four factors that lead to racial and gender disparities in retirement readiness for Black women: employment discrimination, occupational segregation, and low-paying jobs; limited intergenerational wealth transfers; limited home equity and homeownership caused by lending market discrimination; and health-related drains on savings.

Viceisza highlights a range of promising approaches for improving retirement readiness for Black women. For employer practices, he supports accelerated C-suite programs, retroactive “catch-up” on retirement savings, and increased outreach about existing policies. With regard to public policy interventions, Viceisza recommends pay transparency laws; wealth-building policies that reduce the costs of housing, health care, and child care; increased Social Security Administration service delivery; and a reparations program that could close systemic racial inequities in wealth and other areas. 

4. Create wealth-building opportunities beyond homeownership

Black women’s economic mobility plays a key role in their wealth-building capacity across the life course and intergenerationally. In her forthcoming research on Black women’s mobility in Cincinnati, Norwood found that the ubiquity of gendered racism impedes mobility and “punctuates every area of life” for Black women. Norwood defines homeownership as a critical component of economic mobility and concludes that the absence of intergenerational homeownership for Black women impairs wealth transmission from one generation to the next.

But homeownership isn’t the only pathway to wealth. Norwood highlights three additional essential areas for wealth building: policies that dismantle gendered racism and promote wage equity; reparations policies, such as student loan debt cancellation, subsidized homebuying and rent, and guaranteed health coverage; and reform of the criminal legal system, which disproportionally affects Black families.

Moving forward

The body of work produced by the inaugural cohort of the OMBW Research Partnership provides compelling insights and evidence on the root causes of the wealth gap for Black women and the structural transformation needed to close it. Their vital work shouldn’t exist in isolation.

Now, opportunity arises for researchers and funders to continue building evidence and for federal and local policymakers and employers to turn evidence into action. Together, they hold the power to advance bold solutions that could close the earnings and wealth gap facing Black women and their families.