It’s been five decades since Martin Luther King Jr. rallied Americans to pursue a dream that had eluded the country for centuries: socioeconomic equality for all races.
How far have we come?
That’s a loaded question, one with so many answers it could make your head spin. Even President Obama waffled on the topic during his speech Wednesday commemorating the March on Washington.
“To dismiss the magnitude of this progress, to suggest, as some sometimes do, that little has changed — that dishonors the courage and the sacrifice of those who paid the price to march in those years,” Obama said. “But we would dishonor those heroes as well to suggest that the work of this nation is somehow complete.”
Most of the answer, we believe, can be found in a single chart — the median adjusted household income of whites and blacks compiled by the Pew Research Center.
Here, you can see there isn’t so much a gap between black and white households as a Grand Canyon-sized void that has only gotten worse since the 1960s.
On the other side, we have made significant progress on the education and health front, both of which have seen racial gaps shrink since the 1960s.
That begs the question — how have blacks fallen so far behind in financial equality?
You don’t have to go far to find the answers. Blacks are still far behind on wages, jobs, and investment gains.
Since the 1960s, the difference in household income between black and white households ballooned from $US19,000 to $US27,000, meaning black households on average earn just 59% as much as their white neighbours. Blacks enjoyed a bit of a boost from the prosperous early 2000s, when they earned 65% as much as white households, but the Great Recession made quick work of destroying those gains.
Blacks have also been the most unemployed racial group in the U.S. over the last half century, with an unemployment rate almost double the national average, according to the Urban Institute.
Neither of these factors is mutually exclusive in any way, and both contribute to the third road block blacks are facing: stunted investment growth. The average 401(k) balance for black workers enrolled in 401(k) plans in 2010 was $US7,557, nearly half as much as white workers and barely unchanged from 2007. And for those blacks who are saving, they are 9% more likely to dip into their 401(k) contributions — more than four times as often as whites, according to a 2012 report by AON Hewitt.
On a smaller scale, other financial setbacks could be contributing to the wealth gap. A 1992 Congressional investigation found that blacks were much more likely than whites to be turned down for disability insurance, and a there has been a long-time gap between whites and blacks receiving child support payments.
Clearly, we’ve still got a lot of ground to cover. The bright side to all this is that the vast majority of Americans aren’t kidding themselves about it. When asked by Pew, more than 70% said we still have work to do.