The racial wealth gap, or the difference in median household wealth among different races, is a longstanding problem.
In 2019, the median white family had more than 8 times the wealth of the median Black family, according to the latest Federal Reserve data on the subject. That's roughly the same as in 1983, the first year the Fed conducted the survey.
Conversations around the wealth gap became more prominent in 2020, with worldwide racial justice protests in response to the death of George Floyd in Minneapolis. With a recession caused by the coronavirus pandemic, Black and Latinx families have been hit hardest.
Lawmakers have proposed a variety of policies that could help close the gap, including one that would require the Federal Reserve to make reducing racial employment and wage gaps part of its mission and another that would issue baby bonds. And one of President Joe Biden's first signatures in the Oval Office was an executive order to promote racial equity.
But fixing such a complex problem — one that's embedded in banking practices, housing policies, and the minimum wage — isn't easy. Some proposed solutions only tackle one part of the overall problem.
Here's what Black personal finance experts, entrepreneurs, and career coaches say regarding what's missing from the conversation about closing the racial wealth gap.
Wages and income are a significant part of this equation, too. Companies must be held accountable for pay gaps, says career coach Angelina Darrisaw, founder and CEO of C-Suite Coach. Citing Apple's effort to fix its gender pay inequality, Darrisaw says she thinks companies should do the same for Black and Latinx employees: "We need to hold more companies accountable for being open with any of the pay inequity that they may have and having a plan to address it."
She underlines the importance of negotiating your salary and discussing salary with co-workers.
"We have to talk about money to address the fact that there is an inequity there," Darrisaw says. "If we don't know what our peers are making, if we don't know the expectations of what we should be getting paid in a role, then we're missing out on the opportunity to properly negotiate for ourselves and hold our companies as accountable for paying us fairly."
Bola Sokunbi, CEO and founder of Clever Girl Finance, says the "most obvious" thing missing from the conversation is financial literacy. Financial literacy is crucial in closing the gap because it not only teaches you how to be the boss of your money, but it also helps you not fall prey to damaging money schemes like payday loans and predatory lending practices, she says.
For that reason, technological literacy is also essential to closing the gap, says Rich & Regular co-founder Julien Saunders. You need to be able to understand and use technology these days to become financially literate and to grow and invest in businesses. Technological literacy isn't just a problem for the older generation, it affects people of all ages, says Saunders.
It's crucial, Saunders says, to discern the difference between truthful information and "something that's really just an ad, that's trying to lure [someone] into something."
Video by Courtney Stith
Freelance writer Rainier Harris says one of the frustrating parts of the racial wealth gap is that everyday Black Americans can feel erased.
"Many people point to success, like billionaire Black people like, 'Yeah, all fine,'" he says. "They say it's all good because Oprah exists and it's like, no, she's just one of the very few class of ultrawealthy African Americans."
A similarly frustrating experience for Kiersten Saunders, co-founder of Rich & Regular, is when apps and social platforms use the social capital of Black people to succeed. "Black people have been the heart of that for this country for hundreds of years," she says.
"Where's the equity in that conversation?" she asks. "How do we convert some of the capital and the value that we add to so many different places into actual dollars and cents?"
"There's not a simple solution to kind of reverse and undo all those years and years and decades and centuries of issues and inequality that we've experienced here in the country," says Chris Browning, founder of the podcast Popcorn Finance. A multilayered solution is needed, he says: "There's not really one solution because it's just built into society."
Current financial policies around issues like the minimum wage, affordable housing, and the concentration of educational resources in wealthy neighborhoods all tie into the racial wealth gap, says Browning. Policies aimed at fixing these problems will help build a stronger foundation for working families.
Personal money coach Melissa Jean-Baptiste also says the onus on closing the racial wealth gap falls on Congress. Although she's happy the conversation has reached a political level, Jean-Baptiste is looking to the Biden administration for concrete action on key issues such as pay inequity and biased housing policies.
"What are we now going to do to ensure that Black women aren't being paid 60 cents to every white man's dollar? What are we going to do to ensure that housing is being provided fairly?" she asks.
Darrisaw agrees, noting that while people of color can get promotions or grow profitable businesses, they can't "level up systems that are designed with inequity in mind."
This story has been updated to include new data on the racial wealth gap.
More from Grow: