Black Americans Earn Over 50% Less Than White Americans in This State

24/7 Wall St. Insights

We used data from the US Census Bureau’s 2022 American Community Report, Bureau of Justice statistics, and data from the Centers for Disease Control
In 18 states, Black households earn even less than 63.6% of white households
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In 1968, the United States passed the Fair Housing Act, banning discrimination in the sale, rental, and financing of houses. The resulting discrimination, despite legislation working against it, has produced inequality that still exists today. The US continues to face significant wealth gaps between upper-income households and the majority of Americans.

Racial inequality continues to affect Black Americans due to many years of unfair laws and policies, such as Jim Crow laws and housing discrimination. The problem of economic inequality is rooted in more than just differences in income and higher rates of poverty. Other contributing factors include disparities in employment, housing, education, rates of incarceration, and many more.

To determine the worst states for Black Americans, 24/7 Wall St. created an index consisting of eight measures to assess race-based gaps in socioeconomic outcomes. Six of the measures – median household income, poverty, adult high school and bachelor’s degree attainment, homeownership, and unemployment rates – are based on five-year estimates from the U.S. Census Bureau’s 2022 American Community. The seventh measure, prisoners under the jurisdiction of state or federal correctional authorities by race per 100,000 residents, is based on Bureau of Justice Statistics data for 2021. The eighth measure, age-adjusted mortality rate by race, is based on data from 2018 to 2020 from the Centers for Disease Control and Prevention.

Nationwide, Black households earn $50,901 annually, or just 63.6% of the $80,042 income white households earn a year. Similarly, Black Americans are more than twice as likely to live below the poverty line (21.5% vs. 10.1%) or be unemployed (9.2% vs. 4.6%) as white Americans and are nearly five times as likely to be incarcerated (1,020.4 per 100,000 Black Americans vs 217.7 per 100,000 white Americans).

In 18 states, Black households earn even less than 63.6% of white households, including in all ten worst states for Black Americans. In Wisconsin, the Black median household income is just 51.1% of the white median household income — the largest income disparity of any state. And while the poverty rate for white Americans is lower than 10% in 23 states, this is true for Black Americans in only one state, Hawaii.

Many of the lowest-ranking states on the list are in the Midwest, where millions of Black Americans moved during the Great Migration of the early 20th century. But redlining — a discriminatory practice of designating neighborhoods as high risk because of race, thus denying residents loans — created segregated neighborhoods, enforcing racial disparity. To this day, the gap in homeownership rates in the worst states for Black Americans is significantly higher than the 28-point gap nationwide (71.7% white homeownership rate vs 43.1% for Blacks). In Minnesota, for example, the gap is 48.4 points.

Why This Matters

Racist concepts in employment and promotion. Miniature people and miniature wooden ladders.

New policies continue to address the issues of racial inequality and disparity in the United States. However, years of unfair treatment have created pervasive problems that are difficult to undo. By increasing awareness of the issues by looking at facts and figures, individuals and decision-makers can understand the need for change.