Economics & Labor

Wealth Accessibility for Black America

Access to wealth is essential in providing families with the health and security that leads to successful lives. According to Federal Reserve economist William Emmons, because of slowing wage growth, owning wealth has never been more important for families’ financial success.1 Wealth not only enhances a family’s livelihood, but also provides a blanket of security in times of economic distress. 

Throughout this nation’s history, Black Americans have been deprived of numerous wealth building opportunities that were afforded to white Americans. For example, The Homestead Act of 1862 provided millions of acres of land for white American ownership; this included white men, white women and European immigrants. Additionally, the massive land grant initiative, as well as subsequent land grant initiatives like the Timber Culture Act of 1873, The Kincaid Amendment of 1904, the Enlarged Homestead Act of 1909, and the Stock- Raising Homestead Act of 1916 all excluded Black Americans. 

Preserving the legacy of exclusion, The Social Security Act of 1935 provided a safety net for workers, assuring income in retirement. However, the Act excluded two professions, agricultural and domestic workers, of which 65% were descendants of chattel slavery in the U.S. These kinds of exclusionary injections of resources into white families created wealth that continues to exacerbate the expanding racial wealth gap.

Today, it would take the net worth of 11.5 Black households to equal the worth of one white U.S. household.2 In 2016, the median Black American household possessed $13,024 in wealth.2 In the same year, white Americans were worth $149,703.2 Highlighting the lack of progress, the Federal Reserve Bank reported that the racial wealth gap was wider in 2016 than it was in 1968.2 According to Edward Wolff, a New York University economist, the median Black family—minus vehicles and other depreciating assets—is worth just $1,700.3 Thirty years ago, that same Black family was worth $6,800, when adjusted for inflation.3 In 2013, 40% of Black households had zero or negative wealth.4 Pre-pandemic, the Institute for Policy Studies projected that 50% of Black Americans are on the road to zero [or negative] wealth by 2053.4 Covid-19’s economic impact has likely accelerated Black America’s approach to zero wealth. 


In 1953, the U.S. Bureau of Labor Statistics (BLS) published an article titled, “Employment and Income of Negro Workers”, which reported that, in June of 1950, 10.5% of Black Americans and 3.8% of whites were unemployed among the 25-34 year old demographic.5

Today, despite the litany of anti-discrimination policies implemented since the 1950s, the BLS reported that the unemployment rate for Black Americans was 9.9 percent and 5.6 percent for white Americans. This disparity isn’t limited to the era of Jim Crow. The Pew Research Center found that the Black unemployment rate has consistently been twice that of whites since the BLS started recording unemployment data in the 1950s.6 More alarmingly, the unemployment gaps usually widen beyond a 2 to 1 ratio during periods of recession. In 2020, 83.7% of Black workers in California filed for unemployment benefits at some point during the COVID-19 pandemic.7 However, only people who are jobless, looking for a job, and available for work are included in the BLS unemployment calculations. Discouraged workers, those who are institutionalized, or are no longer looking for work, are not included in unemployment data. In May 2021, only 55.4% of Black workers were employed meaning 44.6% of Black workers were unemployed or uncounted in the labor force.8

In the past, many programs created to lift Americans out of economic despair left Black Americans behind. For example, Black American enrollment in the 1930s Civilian Conservation Corps (CCC), a New Deal jobless program, was capped at 10 percent. This quota reflected the racial profile of the national population at the time but ignored the fact that Black Americans faced disproportionately worse economic situations than whites. CCC camps in some Southern states outright denied Black Americans, arguing that they were needed to “tend fields”.9 As a consequence, Black Americans were excluded from most of the major provisions of New Deal policy that stabilized white American communities.

To combat the legacy of unemployment that has haunted Black Americans, the Biden-Harris administration must implement transformative Black employment programs.

  • Employing the American Jobs Plan, The Biden-Harris administration must institute a new $10 billion CCC program focused on the Black Belt and Great Migration Enclaves, as specified in the ADOS Matrix, which explicitly targets Black American residents and assigns them to initiatives under the American Jobs Plan. Implementing unemployment “strike teams” that recruit and solicit enrollment of Black Americans in these programs would ensure race-neutral policy does not result in exclusion akin to the original New Deal programs. Participating employers should receive tax credit for employing workers who reside in communities which have been excluded or harmed by policy.

  • Establish a federal jobs program that imposes a living wage that is based on location and is tied to inflation. Applicants should be targeted using the ADOS Matrix.

  • In California, over 4,400 prisoners helped the state battle wildfires for approximately $2 per day.10 To end the legacy of slave labor in the U.S, a living wage based on the location of the conviction must be imposed for prison labor programs.

  • Reparations 

  • For at least a century, the federal government has hired Black Americans at higher rates than the private sector.11 Today, nearly 1 in 5 Black workers are employed in the public sector.11 These jobs provide income stability and economic security in retirement.12 The Biden-Harris administration must increase the number of Black workers in the public sector by creating an employment program that targets recruits using the ADOS Matrix.

Banking & Capital

Access to capital is important for the economic growth and development of any community. In the past, that access was denied to Black Americans through explicit discriminatory practices and is now sustained through colorblindness and race-neutral policy enforcement.

In 1865, Congress chartered The Freedman’s Savings and Trust to administer financial programs to the formerly enslaved after the Civil War. The goal of the bank was to, as Frederick Douglass put it, “Foster lessons of sobriety, wisdom, and economy, and to show them how to rise in the world.” The bank was overseen by white members of Congress but was nevertheless festered with corruption and risky investments made with depositor’s savings. Ultimately, the bank failed in 1874 and was swallowed by the forces that undermined Reconstruction. Remaining were 61,144 depositors with losses of nearly $3 million.13 The newly freed had been betrayed by white, greedy bankers and failed by congressional oversight.

Negative outcomes for Black Americans in banking have displayed an unwavering endurance. A Northwestern University study found that discrimination and racial disparities in the mortgage market have remained unchanged since the late 1970’s.14 According to the Board of Governors Report on Economic Well-Being, 46% of Black Americans are underbanked or unbanked. When applying for loans, Black Americans are rejected at higher rates than others or charged higher interest rates when approved, regardless of credit and income.15 In 2016, 28.4% of black firms reported that their profits were negatively impacted due to lack of access to capital, compared to only 10.1% of white firms.16 In addition, 22.6% of black firms reported that the cost of capital had negative impacts on their profits, compared to 10.6% of white firms.16

The Community Reinvestment Act (CRA) was introduced in 1977, in the wake of civil rights legislation secured by Black Americans, to ensure Black Americans were afforded access to capital and to correct market failures experienced during Jim Crow. As a means to enforce the CRA, regulators audit banking institutions and issue CRA credits, or points, when banks engage in qualifying activities—such as mortgage, consumer, and business lending; community investments; and services that would benefit low & moderate income (LMI) individuals within a designated assessment area. Bank auditors evaluate loans by the number, amount, and distribution across income and geographic classifications—race is excluded. Using the same factors, auditors also issue credits based on how LMI suppliers are included in supporting a bank’s business operations. These credits are then used to issue each bank a performance rating, which are taken into consideration when banks apply for charters, branches, mergers, and acquisitions, etc. This race-neutral policy was originally intended to penalize discriminatory practices and encourage the inclusion of Black Americans in the banking system. Yet, Black Americans remain undercapitalized, face discrimination, and the racial wealth gap persists.17

Colorblind policy making has sustained or expanded disparities created by racism. President Lyndon B. Johnson’s remarks on June 4, 1965, at Howard University’s commencement embody the attitude that should shape policy intended to uplift and heal Black Americans:

“You do not take a person who, for years, has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, ‘You are free to compete with all the others,’ and still justly believe that you have been completely fair. Thus, it is not enough just to open the gates of opportunity. All our citizens must have the ability to walk through those gates.” 18 

According to the signer of The Civil Rights Act of 1964 and Voting Rights Act of 1965, Lyndon B. Johnson, America has not been fair to Black Americans, more specifically ADOS. In order to fulfill these rights, policy makers must explicitly prioritize race and lineage by doing the following: 

  • The Biden-Harris administration must refocus the CRA by enforcing policy that explicitly details race & ethnicity and directs financial institutions to invest in Black American wealth creation. Additionally, the CRA should annually audit and mandate the access that Black American suppliers have to depository institutions. Lastly, banks which do not meet regulatory lending standards should be met with sanctions that include fines and loss of FDIC insurance.

  • The Biden-Harris administration must direct Congress to establish a $1 billion pilot regional commission, with the power to cultivate economic development in the Black Belt and Great Migration Enclaves, which explicitly targets Black American workers and suppliers. The commission will support economic growth by providing the consulting, investment, and workforce development that rural and urban Black households need. This commission should receive annual funding and be a part of the mandatory spending budget. In addition, a member of ADOS Advocacy Foundation is to be appointed to the commission. This will ensure that the commission’s goals and objectives remain in line with the mission of uplifting ADOS.

  • The Federal Reserve Bank of Minneapolis’ Center for Indian Country Development serves as an example of the kind of targeted research that can be produced by a federally funded center dedicated to ADOS economic research. The Center for Indian Country Development produces academic research for reservations, but also hosts educational events that inform the public on the history and current needs of Native Americans. The Biden-Harris administration must direct the Federal Reserve Board of Governors to establish an ADOS Center for Policy Development in Washington, D.C. Establishing a research center for ADOS through the Federal Reserve System can arm state & local advocacy with disaggregated reports focused on ADOS issues. The research center must also create an outlet for Black economists who have faced barriers in the economics profession.19

Banking & Access

Access to banking that offers a complete portfolio of financial products gives communities flexibility in meeting their needs for wealth building. Today, only half of Black Americans are fully banked, meaning they have a traditional bank account and don’t rely on alternative financial services like payday loans and check cashing services.20 For comparison, 85% of white Americans are fully banked.20 Additionally, 14% of Black Americans are unbanked entirely, meaning they have no checking or savings account and rely on alternative methods for financial services whereas 4% of white Americans are unbanked.20 A higher reliance on non-traditional banking means financial services are more expensive for Black Americans.21 For example, in Alabama, the average pay-day loan interest rates were 456% during the pandemic.22 A higher number of Black Americans experienced a delay in receiving their economic impact payments because they had to wait on mailed checks instead of automatic deposits into their checking account. According to former bank examiner Mehrsa Baradaran, “The driving factor in households being either unbanked and underbanked is a lack of access to mainstream banking institutions in their communities.” 21 

Given this landscape, addressing how Black Americans access and engage with the banking system is necessary.

  • In order to expand access to banking the Biden-Harris administration must extend the U.S. Postal Service responsibilities to include banking services. This will provide millions of unbanked Americans with accessible low-cost financial services.

  • The Biden-Harris administration must place limits on subprime financial products including but not limited to payday loan interest rates in order to protect consumers from the cycle of predatory lending.

  • Mandate private sector banks service Black American neighborhoods and ensure they are in compliance with regulatory requirements.

  • The Biden-Harris administration must issue an executive order recognizing the need for the specific economic uplift of Black Americans, like those issued for Hispanics and AAPIs. This order must create a permanent White House Initiative on Black Americans’ Economic Uplift and Full Economic Inclusion.

  • The Biden-Harris administration must commit to providing grants and zero to low-interest loans specifically targeted to Black-owned businesses of all types (including, but not limited to, sole proprietorships, single-member LLCs, and 1099s) to keep existing businesses open and to help reopen businesses that are now closed due to the disproportionate economic fallout from COVID-19.23

  • 15% of SBA loans must go to Black-owned businesses. These loans must be sufficient for Black-owned businesses to scale and employ workers. Such loans should not be secured by collateral, as the government—through policies such as redlining—has intentionally devalued Black-owned property. These loans must be federally backed and forgivable.

  • 15% of government contracts must go to Black-owned businesses.

  • 15% of the government’s media expenditures must go to Black-owned media companies.


  1. Emmons, Wiliam and Lowell Ricketts  “The Importance of Wealth Is Growing.” Federal Reserve Bank of St. Louis, Accessed June 30, 2021.

  2. Long, Heather, and Andrew Dam. “The Black-White Economic Gap Remains as Wide as in 1968 – The Washington Post.” The Washington Post, 4 June 2020,

  3. Wolff, Edward N. “Household Wealth Trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered?” National Bureau of Economic Research, December 4, 2017.


  4. Collins, Chuck. “Report: The Road to Zero Wealth.” Institute for Policy Studies, September 11, 2017.

  5. Bedell, Mary. “Employment and Income of Negro Workers – 1940-52.” U.S. Bureau of Labor Statistics, June 1953.

  6. DeSilver, Drew. “Black Unemployment Rate Is Consistently Twice That of Whites.” Pew Research Center, August 21, 2013.

  7. Lightman, David. “Here’s How Hard the Coronavirus Pandemic Hit Black Workers in California.” The Sacramento Bee, November 19, 2020.

  8. “Table A-2. Employment Status of the Civilian Population by Race, Sex, and Age.” Accessed June 30, 2021.

  9. McNeil, Ashley, and Hannah Traverse. “Moving Forward Initiative: The African American Experience in the Civilian Conservation Corps.” The Corps Network, 17 Aug. 2017,

  10. Lewis, Amanda Chicago. “The Prisoners Fighting California’s Wildfires.” BuzzFeed. Accessed July 6, 2021.

  11. Madowitz, Michael, Anne Price, and Christian E. Weller. “Public Work Provides Economic Security for Black Families and Communities.” Center for American Progress. Accessed July 6, 2021.

  12. Hiltonsmith, Robert. “Twin Threats: How Disappearing Public Pensions Hurt Black Workers.” Demos,  Accessed 13 July 2021.

  13. “The Freedman’s Savings Bank: Good Intentions Were Not Enough; A Noble Experiment Goes Awry,” OCC,  March 14, 2019.

  14. Harney, Kenneth R. “Large Numbers of Loan Applications Get Denied. But for Blacks, Hispanics and Asians, the Rejection Rate Is Even Higher” The Washington Post, 22 May 2018,

  15. Nance-Nash, Sheryl. “Racial Bias in Mortgage Lending Is Real — How to Get a Mortgage Anyway.” Business Insider, 9 June 2020,

  16. Robb, Alicia, and Arnobio Morelix. “Startup Financing Trends by Race: How Access to Capital Impacts Profitability” Ewing Marion Kauffman Foundation | Kauffman.Org, Kauffman Foundation, Oct. 2016,

  17. Getter, Darryl. “The Effectiveness of The Community Reinvestment Act.” Congressional Research Service, 28 Feb. 2019,

  18. Kirkland, Pamela. “For Howard Grads, LBJ’s ‘To Fulfill These Rights’ Remarks Are Still Relevant Half a Century Later.” Washington Post. Accessed July 6, 2021.

  19. Smialek, Jeanna. “Why Are There So Few Black Economists at the Fed?” The New York Times, February 2, 2021, sec. Business.

  20. Board of Governors of the Federal Reserve System. “The Fed – Banking and Credit.” Federal Reserve, Accessed June 23, 2021.

  21. Solomon, Danyelle, Mehrsa Baradaran, and Lily Roberts. “Creating a Postal Banking System Would Help Address Structural Inequality.” Center for American Progress. Accessed June 29, 2021.

  22. Leonhardt, Megan. “Payday Loans Can Have Interest Rates over 600%—Here’s the Typical Rate in Every U.S. State.” CNBC, February 16, 2021.

  23. Washington, Kemberley. “Covid-19 Has Had A Disproportionate Financial Impact On Black Small Businesses.” Forbes. Forbes Magazine, June 3, 2021. 

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