Thomas M Shapiro

Since the beginning of the COVID-19 pandemic, essential workers continuously put themselves in harm’s way to keep the United States running. We are deeply grateful for the labor of all essential workers over the past year, and recognize that their contributions kept so many other Americans safe, fed, and healthy. These contributions, and the short- and long-term consequences of the sacrifices that essential workers made during the COVID-19 pandemic differed by race, gender, industry, and occupation.

This report examines employment trends for essential workers over 12 months, beginning at the start of the pandemic. In particular, we highlight racial and gender inequities in the healthcare workforce and the experiences of Black women. Key findings include:

• While all essential workers suffered through the pandemic, Black women faced higher unemployment and lower wages than almost every other group.

• In health care, the occupations with a larger proportion of Black women had the highest unemployment and the lowest wages.

• While white healthcare workers were able to see rewards from their work through career advancement, Black women’s career standing more often stagnated or fell.

In this policy brief, we first critically examine the existing evidence and theories pertinent to cash transfers and wealth-generating programs, highlighting bold promises, evidentiary foundation, and challenges. The next section builds upon what we know about cash transfers and wealth accumulation to design a realistic Just Futures Fund policy proposal. We model the estimated impacts for this bold policy design with racial justice and equity as our North Stars. Spoiler Alert: [the results are incredibly impressive, transformative, disruptive, popular, and doable].

The current higher education financing regime sediments and exacerbates inequality, and student loans adversely affect the Black-White racial wealth gap. Black students—and students at for-profit universities, who are more likely to be students of color—often face the greatest challenges as they try to finance their degrees with student loans. They take on more loans, amass higher amounts of loans, and experience greater difficulty in paying off loans. Frequently without family financial wealth to support repayment and facing ongoing discrimination in the labor market,8 Black borrowers are much more likely to experience longterm financial insecurity due to student loans. Would anybody knowingly design a system where, two decades after starting college, many Black borrowers still are paying on virtually all of their student loans, while for the typical White borrower, a minimal debt burden remains? Would anybody knowingly design a system whereby 38 elite colleges have more students who come from families in the top 1 percent than students who come from the bottom 60 percent? Elite colleges, to be sure, historically served upper-class White males, yet access gained by
women and students of color has created only a lukewarm diversity in the context of today’s higher education financing regime.
This report highlights how student loans often create a long-term debt burden that blocks wealth accumulation, rendering mobility more fragile and impeding long-term security, particularly for young Black borrowers. While the crisis has grown nationally for all groups in recent years, the data below underscore that Black students are particularly harmed by the current student loan system. The role of higher education financing in contributing to the racial wealth gap and its widening are detailed in this report.

Occupational segregation results in racialized patterns in which people are distributed unequally across jobs in the labor market. The impact of this inequality goes far beyond paychecks. With incomes making up just about two-thirds of employee compensation, it is benefits that complete the entire employee compensation package. Historical legacy and contemporary employment practices concentrate Black and Latino working people disproportionately in jobs and industries stripped of or lacking in benefits that connect work to wealth and better livelihoods. For many employees, the workplace can be a crucial access point for asset-building opportunities through quality jobs that provide comprehensive employee compensation packages. However, Black and Latino workers face ongoing discrimination in hiring, higher unemployment rates, fewer sick days, and less workplace flexibility compared to White workers, which severely diminishes workplace stability and access to wealth-building benefits. To understand the institutional and policy mechanisms by which wealth is distributed and inequality worsened at the workplace, it is imperative that we identify and recognize how the total employment package—from income to benefits to additional workplace resources— contribute to growing inequality and the racial wealth gap. This report examines the impact of benefits disparities on the asset security of households of color. Our investigation results in a deeper understanding of the impacts of occupational segregation on access to workplace benefits, the racial wealth gap, and workers’ economic security.

This report provides a look at the Black-White racial wealth gap in the United States today, explains the historical foundations and contemporary drivers of the gap, and offers a lens for developing and assessing policies to address these structural disparities. While we provide some detail for other groups as context on the overall state of wealth inequality in the United States, this report primarily focuses on and examines the history of wealth inequalities between Black and White Americans. Of course, this focus is only one aspect of the total picture of wealth inequality in American society. We commend efforts to explore other aspects of wealth inequality, including Eric Rodriguez’s discussion of the Hispanic/Latinx wealth gap, Christian E. Weller and Jeffrey Thompson’s work on wealth inequality among Asian Americans, and Greg Leiserson, Will McGrew, and Raksha Kopparam’s analysis of wealth inequality in the United States generally

Issues of racial inequity are increasingly at the forefront of America’s public debate. In addition to urgent concerns about racial bias in law enforcement and the criminal justice system, activists highlight deeply connected issues of economic exclusion and inequality. No metric more powerfully captures the persistence and growth of economic inequality along racial and ethnic lines than the racial wealth gap. According to data from the Survey of Consumer Finances, the median white household possessed $13 in net wealth for every dollar held by the median black household in 2013. That same year, median white households possessed $10 for each dollar held by the median Latino/a household.

Research probing the causes of the racial wealth gap has traced its origins to historic injustices, from slavery to segregation to redlining. The great expansion of wealth in the years after World War II was fueled by public policies such as the GI Bill, which mostly
helped white veterans attend college and purchase homes with guaranteed mortgages, building the foundations of an American
middle class that largely excluded people of color. The outcomes of past injustice are carried forward as wealth is handed down across
generations and are reinforced by ostensibly “color-blind” practices and policies in effect today. Yet many popular explanations for
racial economic inequality overlook these deep roots, asserting that wealth disparities must be solely the result of individual life choices and personal achievements. The misconception that personal responsibility accounts for the racial wealth gap is an obstacle to the policies that could effectively address racial disparities.

This paper explores a number of these popular explanations for the racial wealth gap, looking at individual differences in education,
family structure, full- or part-time employment, and consumption habits. In each case, we find that individual choices are not sufficient
to erase a century of accumulated wealth: structural racism trumps personal responsibility. Drawing on data from the 2013 Survey of
Consumer Finances, we find that white adults who don’t graduate high school, don’t get married before having children, and don’t work full time still have much greater wealth at the median than comparable black and Latino adults—and often have more wealth than black and Latino households that have married, completed more education, or work longer hours. Differences in consumption habits also cannot explain the wealth gap; we look at academic research finding that white households spend more than black households of comparable incomes, yet still have more wealth.

The racial wealth gap matters because of the central role wealth plays in enabling families to both handle current financial challenges and make investments in their future. Families that have accumulated some wealth are better equipped to manage unanticipated expenses like an emergency medical bill, or disruptions in household income such as a layoff, without falling into debt or poverty. Over the longer term, wealth can expand the prospects of the next generation, helping to pay for college, provide a down payment for a first home, or capitalize a new business. As long as a substantial racial wealth gap persists, white households will continue to enjoy greater advantages than their black and Latino neighbors in meeting the financial challenges of everyday life and will be able to make greater investments in their children, passing economic advantages on. We can only create a more equitable future by confronting the racial wealth gap and the public policies that continue to fuel and exacerbate it.