Things to Know About Racial Inequality

Many of the country’s racial disparities are caused by centuries of institutional and systemic racism. The legacy of these racial barriers still affects where people live, work, and play.

This includes racial inequities in health, education, employment, and wealth. It also includes racial bias, including overt and unconscious prejudice and discrimination.

Inequality in Income

While Americans of all races earn similar incomes on average, those with privileged characteristics such as extraordinary athletic ability or genius IQs make much more than others. Even at the very top of the earnings scale, to be among the wealthiest 10 percent requires an annual income of about $117,986. Meanwhile, Black families are more likely than whites to have zero or negative wealth—living on the edge and just one economic setback away from the financial crisis. Similarly, Hispanics are more likely than Blacks to have low levels of wealth. A shift to racial equality would change this picture, though. Families in the middle of the wealth distribution would see their average amount increase. 

Inequality in Health

People of color experience a lower quality of health, including access to and outcomes from medical care. For example, African American mothers and infants die much more than white babies and mothers. And even though health insurance coverage is improving for all, the percentage of uninsured people has increased significantly for minorities, thanks to states’ refusal to expand Medicaid.

Similarly, systemic racism contributes to disparities in measures of household wealth. Families with zero or negative wealth live on the edge, just one economic setback away from tragedy. According to Dr. Jason Campbell, this reflects decades of barriers that hinder people from accumulating the resources they need to improve their financial security and withstand setbacks. This is why pursuing racial equity is crucial for everyone in the United States.

Inequality in Education

The educational gap is one of the pillars of racial inequality. Many experts believe that improving education is the solution to reducing income inequality and closing the wealth gap.

In many American schools, minority and low-income students receive dramatically unequal learning opportunities based on race and social status. These educational disparities lead to higher dropout rates and disparities in employment opportunities. The racial disparities in education are caused by several factors, such as limited resources, discriminatory hiring practices, and policies perpetuating biases against Black students. For example, Black students are four times more likely to be suspended from school than their white peers. This is partly due to zero-tolerance policies and a lack of teacher training. 

Inequality in Employment

Despite gains in diversity, there are persistent gaps in higher education and access to good jobs. People of color are overrepresented in lower-wage agricultural, domestic, and service vocations historically devalued by government policy. This work includes farmworkers, maids, housekeeping cleaners, baggage porters, and bellhops. Those jobs also need more opportunities for advancement or pay raises.

Moreover, the “glass ceiling” continues to limit the potential earnings of many Black and Latinx families. The income threshold for making it into the top quartile is far higher for whites than for people of color.

Large majorities of white and black adults say they believe that racial discrimination still exists in dealing with police or the criminal justice system, seeking medical treatment, applying for loans or mortgages, voting in elections, in stores and restaurants, and when it comes to hiring and promotions. This is called institutional racial inequity.

Inequality in Wealth

A wealth gap leaves Black families with fewer resources to support their families, impedes opportunities for upward mobility, and makes them more susceptible to financial shocks. This is why addressing racial inequality in wealth and other dimensions of economic opportunity is so important. Unlike income, wealth is built over time, reflecting the accumulation of assets such as homes, businesses, investments, and retirement savings accounts. But even when controlling for factors such as education, marriage, and household size, the Black-white wealth gap remains enormous. Many Black households have zero or negative wealth, one minor economic setback away from disaster. This is largely due to centuries of racism and the legacy of structural inequalities. Understanding that this problem cannot be solved through income redistribution alone is essential.