Whenmainstream media shares research about Black people and money — especially Black women — the information tends to be negative or fixated on the income and wealth gaps. The research explains the continued work necessary to improve wealth equity in the U.S., but that progress cannot happen without reckoning with the four centuries of systemic and institutional racism that is the foundation of racial wealth disparity.
Acknowledged or not, racism exists. It also costs. In a 2020 report, “Closing the Racial Inequality Gaps,” Citigroup estimates that closing four key racial gaps for Black Americans 20 years earlier — in wages, education, housing and investment — could have added $16 trillion to the U.S. economy. More generally, racial income inequities cost the U.S. economy about $2.3 trillion per year.
But even as the U.S. is leaving money on the table, Black women are working twice as hard to earn a little over half as much as white men. Earning less income holds many Black women back from the ability to build wealth comparable to white men or women. Then there’s the estimated $73 trillion in wealth set to be transferred through 2045, nearly half of which will come from the richest 1.5% of households. The country’s 400 wealthiest billionaires own 3.5% of all U.S. household wealth, and these mostly white households hold more wealth in total than all 10 million Black households in the U.S.
“Historically, institutional racism has had devastating effects on the descendants of the African diaspora. The vestiges of the systems of oppression, as well as its impact, [are] still visible and intact today,” says Dr. Virletta Bryant, a licensed clinical social worker and founder of The Art of Healing Center in Washington, D.C.
“Any system of oppression [or] institutionalized racism is intended to reduce one’s sense of agency and resources by systematically disadvantaging the targeted individuals,” says Bryant. “When oppression — in this case, institutionalized racism — succeeds, Black women are less aware of their freedom to make choices that are in their best interest.”
Despite the statistics, Black women do build financial wealth. They do leave financial legacies. It just looks different.
It looks like Black sororities and religious organizations creating scholarships for Black children to get a college education, allowing for greater professional opportunities and higher incomes. Teaching our children money lessons and guiding them to foster networks they can build upon as they design their futures. Black women using their political prowess to forge change in laws to create equity and economic resources for Black communities. Showing that we are not being defined by the narrative of white America. That’s why we, as a community, work tirelessly to make a difference.
It also looks like Black women philanthropists — like American banker Maggie L. Walker, entrepreneur Madam C.J. Walker, educator Mary McLeod Bethune, television producer Oprah Winfrey, and entertainers Beyoncé and Rihanna — using giving as a form of activism. While these are famous names, there are plenty of less-famous Black women who create and assist nonprofit organizations that help the needs of and strengthen the African-American community. This is despite Black women being less likely to receive an inheritance, according to research by Goldman Sachs.
Closing the racial income gap would be a transformative change for Black women and their families, as well as for society. Goldman Sachs estimated that addressing the earnings gap for Black women could create anywhere from 1.2 million to 1.7 million U.S. jobs, and increase annual U.S. gross domestic product by between 1.4% and 2.1% every year, the equivalent of $300 billion to $450 billion in current dollars.
In my financial planning practice, I see dynamic, determined and inspirational Black women striving to make life better for themselves and their families. They meet with me to discuss and plan how they can leave wealth legacies that extend beyond money to build on their familial, professional and personal relationships. They’re serious about generating lasting impact — some ascending the corporate ladder to open doors for the next generation of Black women executives, others creating businesses and nonprofits that serve a greater good in their communities. All while developing a longstanding plan for philanthropy and volunteerism to help those in need.
Kimberly Mays, the chief financial officer of Seppic Inc., and Polykon Manufacturing Company, told MarketWatch that she is starting to “follow, read and listen to minority investors and property owners.”
“I am taking ownership of my future by not relying on [just] my 401(k) to provide the only source of retirement for me and my family,” she said.
As a financial planner, I get to similarly advise and help Black women work toward their goals.
When I was recently asked about the world I hope for my daughter, my primary response was a future without racism where she can thrive — a future where she achieves her full potential in a society that values her not only as a woman, but as a Black woman.
In March, for example, as we witnessed the historic Supreme Court confirmation hearings for Justice Ketanji Brown Jackson, Black women in my circle expressed their frustration in watching her expertise questioned by less-accomplished white men who wanted to diminish and degrade her on live TV for the world to witness. However, like the Energizer Bunny, we continue to forge ahead in the fight for justice — hoping for an America that wholly embraces the richness in its diversity.
Black women strive for more choices and to create better opportunities for their children so they can live their dreams, pursue their passions and excel in their intentional decisions instead of being forced into unfulfilling jobs because they lack resources or hope for better opportunities.
“I want to be free from obligation to [corporations] that do not value human life,” Mays says. “I want my son to pursue his dream of being an entrepreneur. I want to provide the seed money to help him reach his goals. I want to invest in myself and my future, and not the company I work for.”
Black women want economic security for themselves, and they’re stepping up for collective financial prosperity to make that happen. They deserve to spend time doing the things they love, have careers that flourish and enjoy a financially secure retirement. That’s why I’m proud that my daughter gets to learn from my expertise as I work toward a financially secure future that lasts generations— not just monetarily, but culturally and intellectually.
That’s generational wealth.
Zaneilia Harris, CFP, is an author and the president of Harris & Harris Wealth Management Group, LLC, and a member of Alpha Kappa Alpha Sorority, Incorporated.