Urban Wire You Can’t Improve Black Women’s Economic Well-Being without Addressing Both Wealth and Income Gaps
Justyce Watson, Ofronama Biu
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This month marks two years since the mass protests for racial justice. They forced society to reckon with the racial inequities that have been deeply engrained in policies and practices that shape nearly every aspect of our lives. They also underscored the acutely disparate health and economic effects the COVID-19 pandemic had on Black people and other people of color.

Finally, public and private entities began examining the ways they historically contributed to or were sustaining such inequity. The federal government vowed to prioritize advancing racial equity, as did private companies and philanthropy.

Goldman Sachs chose to focus its efforts on Black women, who face dual barriers based on both race and gender. Black women are more likely than their white counterparts to work in low-paying jobs, experience higher levels of poverty, and remain disproportionally disadvantaged across a broad range of economic measures, including wealth.

Recently, Goldman Sachs announced the recipients of its One-Million Black Women: Closing the Wealth Gap. The grant program invests $10 million into Black-women-led, Black-women-serving nonprofits and other partners and has committed $100 million in philanthropic capital over the next decade to address the disproportionate gender and racial biases that Black households have faced for generations.

Goldman Sachs held a four-month listening tour to learn about the challenges Black women face, directly from Black women. They invited Black women across the country to share their challenges and offer suggestions. Participants included community advocates, small business owners, corporate leaders, union workers, college and university faculty, and more.

Through a partnership, the Urban Institute analyzed each session to find common themes that will inform Goldman Sachs’ future investments. We heard one thing over and over: systemic racism has created barriers for Black women to achieve economic well-being. To address this challenge, Goldman Sachs can focus on solutions that help Black women build and attain wealth and address income gaps.

Systemic racism and sexism created disparities in wealth and income for Black women 

Wealth and income are two components of economic well-being. Income is a flow of money that comes in from employment, social security, or other sources, yet wealth consists of assets (e.g., homes, cash, businesses, vehicles) minus debt (e.g., credit cards, student loans, mortgages, medical debt).

Wealth is critical. In its absence, families have difficulty managing financial emergencies, passing money down to the next generation and participating in activities that can build even more wealth like purchasing a home or starting a business. Research shows the racial wealth gap is even larger than the income gap.

But wealth is not equally accessible. Black households have just 15 percent of the wealth of white households, and this has not changed much over time. For Black women, the gap is also stark.

For instance, single Black women household heads with a college degree have 38 percent less wealth ($5,000) than single white women without one ($8,000). Among married women who are the head of the household, Black women with a bachelor’s degree have 79 percent less wealth ($45,000) than white women with no degree ($117,200) and 83 percent less wealth than those with one ($260,000). Marital status and education do not close the gap. 

On top of this, Black women also have greater student loan debt than Black men, white men, and white women. And Urban Institute research shows that in 2016, the typical Black woman heading a household had $0 in home equity. And white women had nearly 10 times the value of stocks and bonds as Black women. These factors contribute to the lack of wealth among older Black women as they approach retirement. 

Similarly, Black women earn less than white people, despite educational attainment. For example, Black women without a high school diploma earn 61 percent of the median white men’s wages, those with a bachelor’s degree earn 64 percent, and those with more than a bachelor’s degree earn just 60 percent.

Between 2009 and 2020, Black college-educated women experienced a 3.7 percent wage decrease, and Black women categorized as working class experienced a wage increase of 4.2 percent. Black women also face high level of unemployment compared with white people. Seventeen percent of Black women with less than a high school degree were unemployed in 2017, compared with 10 percent of white women and 9 percent of white men. 

And the COVID-19 pandemic (PDF) widened these disparities because Black women were more likely to work in occupations and sectors heavily affected by the economic downturn, such as health care and social services, educational services, retail, and accommodation and food services.

Black women who stayed employed during the pandemic faced a disproportionate risk of virus exposure because they are overrepresented in essential work, working in close physical proximity to others, and paid less when in those roles. 

None of these disparities are accidental. They stem from the interlocking systems of white supremacy and sexism that permeate US institutions’ policies and practices. These forces shaped the historical devaluing of Black women’s labor for centuries.

Solutions for Black women, directly from Black women 

Participants illustrated examples of these gaps in Goldman Sachs’s listening sessions. Then, they suggested the following solutions in various categories.


  • Eliminate second mortgages. The interest and loan costs for second mortgages are often higher than first mortgages.
  • Create and preserve more affordable housing so Black women have a greater chance to build wealth through purchasing a home.


  • Give Black women business owners more access to capital to jumpstart, maintain, and leverage businesses.
  • Give firms owned by Black women access to a suite of financial instruments at all stages of the business cycle: grants for startups, loans, angel investments for early-stage companies, venture capital, blended financing, factoring, and more for firms in their growth phase.


  • Cancel student loan debt to improve the racial and gender wealth gap Black, college-educated women face.
  • Cancel medical debt. Black women have disproportionately poor health later in life leading to extremely costly medical bills that eventually will erode most of their accumulated wealth, preventing intergenerational wealth transfer.

Employment and wages 

  • Hire Black women in leadership positions within companies and organizations.
  • Enforce equal pay.
  • Provide workforce development and professional development opportunities within companies.

To improve Black women’s economic well-being, philanthropies can invest in solutions that dismantle structural racism and are developed for and by the people most affected. Through our partnership with Goldman Sachs, the Urban Institute is developing a learning community for Historically Black College or University scholars to create research products and identify evidence-based actions that public- and private-sector actors can take to increase equitable economic outcomes for Black women. We look forward to sharing insights in future posts. 


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Research Areas Race and equity
Tags Black/African American communities Credit availability Economic well-being Employment discrimination Family savings Financial stability Foundations and philanthropy Inequality and mobility Job markets and labor force Mobility Race and equity in grantmaking Race, gender, class, and ethnicity Racial and ethnic disparities Racial wealth gap Structural racism Wages and economic mobility Wealth inequality
Policy Centers Office of Race and Equity Research
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