Apr 15, 2021

It’s Our Collective Responsibility to Close the Racial Wealth Gap

Robin Hood, Goldman Sachs, Starbucks, the ACLU and more have joined forces to take it from 90% to 0.

By Fritz Bondoa, Special Assistant to the CEO for External Relations and Operations and Michael Roberts, Strategic Initiatives Fellow

There is no racial equity without economic equity

In America right now, there is a 90% wealth gap between Black and white families.

And it’s our collective responsibility to take it from ninety to zero.

The gap exists at every point along the spectrum of wealth (a household’s net assets minus their debt). While white households near the poverty line have an average net worth of $18,000, Black households at the same income level have an average net worth at or below zero — in other words, they owe as much or even more than they own.

Though the need for a remedy is urgent, this gap did not come on quickly: The centuries-long legacy of inequality has been inherited by generations, passed down and supported by racist policies and concerted efforts to stall the accumulation of Black wealth. Black Americans have been consistently denied access to the economy they helped build.

The barriers to building wealth that have been used to leave Black Americans behind are there by design. Slavery made way for discrimination, segregation and financial exploitation. This current wealth gap is the clearest distillation of long-term and structural racial inequity in our country.

The hard numbers are borne out in softer realities: 47% of Black households in the US are either under- or un-banked. Only 1% of venture backed founders are Black, and Black small business owners are twice as likely to be turned down for a loan as their white counterparts. All of this points to the reality that structural racism is deep and pervasive in our economic systems. To combat these issues, we need collective action from all players in our economy from corporations to nonprofits to large banks to foundations to universities and beyond.

In partnership with corporations and organizations like Goldman Sachs, the ACLU, the Children’s Defense Fund, McKinsey & Company, Starbucks and more, NinetyToZero will take deliberate, collective action to advance racial equity through deliberate and impactful economic levers.

Though it’s incubated within Robin Hood, NinetyToZero will eventually be independent of the foundation.

Because financial commitments only make an impact when they address the root issues Black Americans face, this initiative ensures that money works to empower Black Americans to have full economic participation.

Why close the racial wealth gap? Because:

  • Closing the racial wealth gap will help close the racial health gap.
    13.6% of Black Americans but 9.8% of whites don’t have health insurance. The average American family spends 11% of household income on health care premiums and out-of-pocket costs, but that amount approaches 20% for Black households. Black Americans who live below the poverty level are more than 10 times as likely to report mental health and psychological distress than Black Americans who live at the highest income level.
  • Closing the racial wealth gap will save lives.
    In the COVID-19 pandemic, Black and Hispanic New Yorkers are dying at twice the rate as their white neighbors. That health inequity mirrors race-based vaccine inequity: Wealthy zip codes that experienced the lowest rates of COVID infection and death have eight times the rate of fully vaccinated residents in poorer neighborhoods.
  • Closing the racial wealth gap could increase the U.S. GDP.
    That number? $1.5 trillion in the next 10 years. When Black families have economic security and agency, everyone benefits. Companies and organizations’ commitment to ensuring Black Americans have equitable access to wealth can permanently transform the country’s economic landscape for the better.

NinetyToZero partners have pledged internal actions based on The Wharton School’s data-driven research on best practices that will open pathways to wealth for Black Americans, from implementing measurable goals for hiring Black talent to working with Black-owned banks, minority depository institutions, community development financial institutions and other Black-owned financial institutions.

They’ll improve employees’ access to asset-building tools and establish employee resource groups whose champions are C-suite equivalent.

And they’ll compel the current federal administration to double down on their efforts towards racial equity and create a systemic equality agenda for the country.

Our CEO Wes Moore put it best: “Now is the time to be reflective, bold, and transparent.”

Are you ready to join us?