Remembering the Whole Wealth Equation on Black Women’s Equal Pay Day
This piece has been co-authored by Noreen Farrell, Executive Director of Equal Rights Advocates and Teresa Younger, President & CEO of the Ms. Foundation.
Today is Black Women’s Equal Pay Day, a day to expose the glaring income disparities experienced by Black women. The average Black woman needs to work until July 31–8 extra months — to reach the earnings of her white male counterparts the previous year. She earns 63 cents on every dollar paid to white men (which is far worse than the dismal national average of 80 cents on the dollar.) On average, she will lose $21,000 a year and $877,480 over a 40-year career.
This distressing news about income is that it is only half of the economic security equation for Black women. Wealth is the other half. Wealth is the measure of a household’s total assets — from cash savings to real estate equity — minus its debts, like a mortgage or credit card balance. Families can tap into a healthy store of financial assets during emergencies. These assets can also be leveraged into investments, like a home or business, and passed onto future generations.
On this Equal Pay Day, let’s remember that Black women today own only pennies on the dollar compared to both white men and women.
On this Equal Pay Day, let’s remember that Black women today own only pennies on the dollar compared to both white men and women. Indeed, Survey of Consumer Finances data reveal that the median wealth of Black women during their working years is just $200 (as compared to $15,640 for white women and $28,900 for white men).
While these inequities are commonly referred to as the wealth “gap,” the contributing factors are not inexplicable or benign. Nor are these wealth disparities the result of choices by women themselves. They find root in systems deeply entrenched in discrimination based on gender and race. Historically, slavery, Jim Crow laws, redlining, and racially restrictive covenants prevented Black families from accumulating wealth. This legacy plays a significant role in the size of today’s racial wealth gap, or “chasm,” for Black men and Black women.
Today, many Black families continue to lack access to private and public-sector mechanisms that help millions of Americans translate income into wealth.
Today, many Black families continue to lack access to private and public-sector mechanisms that help millions of Americans translate income into wealth. While Black women are likely to be the breadwinner in the household — more than 80% of Black mothers are their family’s sole or primary earner compared to 50% of white mothers — they are less likely to have access to employer-based retirement savings plans and public tax subsidies that encourage people to save and invest. Today, a woman of color is more likely to be carrying student debt, which delays her ability to invest in a home or her child’s education. If she owns a business, it’s likely to be small due to lack of access to loans or investment capital.
Black women also face a host of often hidden attacks that strip them of hard-earned wealth. They were 2.5 times more likely to be given a subprime mortgage in the lead up to the foreclosure crisis — and, hence, were more likely to lose their home, the primary source of their wealth, to foreclosure. And black women are more likely to be the “lender of first resort” for their extended family and to bear the financial burden of incarcerated loved ones.
Let us also not forget that should members of Congress ever prevail in repealing the Affordable Care Act, it will be Black women who will disproportionately bear the burden of the health coverage shortfall and whose savings will be compromised.
Sound policy reforms exist to address both sides of the economic security equation — to increase the earning capacity of black women and protect them from unfair practices that strip their financial assets. So on this Black Women’s Equal Pay Day, we call not only for policies to close the wage gap but also for a comprehensive policy platform to build the wealth of Black women. Check out this great video to learn more about solutions gaining traction across the country. You can also go here to get updates on Equal Rights Advocates’ work.
A special thanks to Heather McCulloch, founder of the Closing the Women’s Wealth Gap Initiative, for her contributions to this piece. Noreen is a Founding Partner of the Initiative and Chair of the Equal Pay Today! Campaign.