Urban Wire Local Data Are Key to Closing the Racial Wealth Gap
Leah Hendey, Lamar Gardere
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The racial wealth gap is a powerful number—it captures the structural racism that’s been baked into the American economy and social institutions, continued uneven opportunities, and hopes for a future of shared prosperity

But limited data on wealth exist. Well-respected national surveys like the Survey of Consumer Finances or Survey of Income and Program Participation (SIPP) provide broad insights but don’t allow for the local data necessary to fully understand community members’ lives and the local root causes of wealth disparities. This makes it hard to develop trusted solutions to those problems.

The limited local data we do have are powerful. Recent surveys revealed the average white household in the DC metropolitan area has 81 times the wealth of a Black household. This research catalyzed action across the region, including the creation of DC Council’s Office of Racial Equity, motivating arguments for reparations, powering advocacy for racially just tax and budget decisions, and supporting community wealth building.

For nearly 30 years, the National Neighborhood Indicators Partnership (NNIP) members have understood the power of local data to help communities develop a shared understanding and be used as a transformative tool to shape strategies and investments so all neighborhoods are places people can thrive. Urban, as the national partner in NNIP, partnered with the Black Wealth Data Center (BWDC) to help our members inform local efforts to build Black wealth.

The NNIP partner in New Orleans, The Data Center, has developed a new methodology for producing local disaggregated wealth estimates (PDF), which localities across the country can use to uncover wealth gaps, develop solutions, and measure progress toward their goals.

A new way to estimate local wealth

The Data Center is collaborating with the Urban League of Louisiana to provide data and research support for the SEE CHANGE Collective, a data-driven and collective impact-based initiative focused on building Black and Latino wealth in Greater New Orleans. The collaboration is exploring three areas: homeownership, income and wages, and business.

But there were no recent disaggregated data quantifying the wealth gap for New Orleans, much less any local data directly tying these or any other factors to the formation of wealth and the racial wealth gap. How can a data-driven initiative function with no data?

Through the NNIP and BWDC project, The Data Center set out to create a standardized method for generating detailed local wealth statistics that are capable of being deconstructed into tunable variables that accurately estimate local wealth for various demographics. Properly done, the design would provide a tool for quantifying the local racial wealth gap and a guide for developing solutions and measuring progress toward goals.

A Profile of Household Wealth in New Orleans Metro leverages American Community Survey microdata and 2018 SIPP data (the most recent year in which good data were available before the COVID-19 pandemic) to develop a flexible method that allows for disaggregation of wealth data by race, age, education, and other factors.

Data reveal local realities and the need for tailored solutions

The Data Center estimates the median wealth of a Black household in Greater New Orleans is $14,000, compared with $21,000 for Hispanic households and $185,000 for white households. Though some inequity can be observed across all levels of wealth, it sharply increases among the wealthier households, such that only relatively affluent Black households match or exceed the wealth of typical white households.

As expected, the model shows that wealth accumulates with age, but there are striking differences in the rate and extent of accumulation for different groups. Black households’ median net worth in the New Orleans metro peaks at just under $100,000 after age 65, when families begin drawing down on retirement savings. But median net worth for white households surpasses that peak after just 35 years of age, ultimately peaking above $300,000.

These findings underscore the importance of developing programs that target younger Black and Hispanic households and encourage investments that build wealth over the life course, in addition to typical shorter-term financial literacy programs. For the SEE CHANGE Collective, this could mean expanding programs to improve readiness for homeownership (PDF) facilitating wealth generation to also include efforts to get Black and Hispanic people responsibly invested in retirement accounts and a broader range of financial vehicles. This could help to build wealth later in life, supporting ongoing financial health.

The data also challenge common notions that disparities can be explained by socioeconomic differences alone. Although Black and white college graduates tend to be wealthier than their non-college-educated peers, Black college graduate householders only accumulated as much wealth as similarly aged white householders with no college degree.

These data bolster arguments that the basic systems supporting everyday activities in New Orleans should be upgraded to facilitate equitable outcomes.

What comes next?

Right now, these disaggregated data are only available for the New Orleans metro area, but The Data Center’s methodology can be applied to nearly any metropolitan area in the country interested in exploring, understanding, and addressing local wealth disparities. This method expands on the types of local wealth estimates already available from the BWDC, the Prosperity Now Scorecard, and Urban’s Financial Health and Wealth Dashboard.

These observations represent the tip of the iceberg on how novel methods can enhance our understanding of local wealth issues. Typical indicators like household income, poverty status, and employment often are points of reference for discussions of economic conditions. These are snapshots in time, but wealth builds gradually, stockpiling returns from economic opportunities realized and lost at earlier stages of life, even across generations. This partly explains why measures of wealth are so valuable: we can identify many individual data points on economic prosperity, but knowing their cumulative effect is difficult. Examining wealth is an intuitive and meaningful way to understand the interrelated nature of local issues.


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The Urban Institute podcast, Evidence in Action, inspires changemakers to lead with evidence and act with equity. Cohosted by Urban President Sarah Rosen Wartell and Executive Vice President Kimberlyn Leary, every episode features in-depth discussions with experts and leaders on topics ranging from how to advance equity, to designing innovative solutions that achieve community impact, to what it means to practice evidence-based leadership.


Research Areas Wealth and financial well-being
Tags Black/African American communities Economic well-being Financial stability Income and wealth distribution Racial and ethnic disparities Racial wealth gap Structural racism Wealth gap Wealth inequality
Policy Centers Metropolitan Housing and Communities Policy Center
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