Despite Advancements, Black Americans See Less Economic Prosperity Than the Nation as a Whole
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
In the years following the Great Recession, which ended in 2009, the U.S. economy has undergone a period of recovery and economic growth. However, some Americans have not experienced those same levels of prosperity. A new LendingTree analysis finds that while black Americans were buoyed by post-recession economic expansion, they actually captured a disproportionately smaller share of economic gains between 2013 and 2018 than Americans did as a whole.
To examine the economic and financial progress of black Americans between 2013 and 2018, LendingTree analyzed data from the U.S. Census Bureau on median household income, median earnings, unemployment rates, homeownership rates and higher education rates within black communities and Americans as a whole. While black Americans closed the gap in secondary education during that 5-year period, those gains did not reflect higher earnings, lower unemployment and other economic measures of prosperity made by Americans overall.
- Key findings
- Despite advancements, economic growth for black Americans is disproportionate
- Where black Americans are closing economic outcome gaps
- Comparing economic outcome gaps in cities across America
- While unemployment decreased for black Americans by 36% — from 16.6% in 2013 to 10.6% in 2018 — it was still 5 percentage points higher than the unemployment rate for Americans as a whole. The unemployment rate for Americans overall in 2013 was 9.7%, which fell to 5.9% in 2018.
- Median household income for black Americans grew by 13.4%, roughly the same rate of 13.7% for Americans as a whole, but remains 33% below the national average. The median household income for black Americans in 2018 was $40,155 — $20,138 less than the $60,293 median household income for Americans as a whole.
- The median individual earnings for black workers — which were already 16% lower than the median individual earnings for American workers as a whole — grew by 7.1%, compared with 9.5% for workers as a whole. That means that the earnings gap between black Americans and Americans as a whole actually increased by 11.2% between 2013 and 2018.
- While homeownership rates fell for Americans overall between 2013 and 2018, black Americans saw a larger drop of 4.7%, compared with 1.7% for Americans as a whole.
- Black Americans are closing the higher education gap. The percentage of black Americans with a bachelor’s degree went from 18.6% in 2013 to 21.1% in 2018, an increase of 13.5%. The increase for Americans as a whole was just 9.4% (from 28.8% in 2013 to 31.5% in 2018).
- Cape Coral, Fla., is the metro area where black Americans made the greatest economic advancements. Grand Rapids, Mich., and Minneapolis came in second and third place, respectively.
- The five places with the least overall gains for black Americans are all in the South, and three out of five are in Louisiana.
- The San Antonio metro area made the most progress in closing economic outcome gaps between black Americans and Americans as a whole. Black residents made the biggest parity gains in this area, including eliminating the post-secondary education gap entirely. Pine Bluff, Ark., ranked second, also eliminated that gap.
- San Diego residents experienced the widest economic outcome gap. In particular, the gap between unemployed black residents and unemployed residents of San Diego overall rose 100%.
Despite advancements, economic growth for black Americans is disproportionate
- Black Americans outpaced the nation in higher education
- Homeownership fell at a higher rate for black Americans
- Individual earnings, household incomes are still far below national averages
Between 2013 and 2018, black Americans shared in the post-recession economic expansion: Unemployment shrunk by 36%, household income rose by 13% and individual earnings increased by 7%. But Americans as a whole experienced a greater decrease in unemployment levels and a higher increase in median household income and median individual earnings.
In fact, black Americans were more likely to be unemployed than Americans overall in 2018 than they were in 2013. And though household income increased, the income gap between black Americans and Americans as a whole remained steady at 33%, while the wage gap between black Americans and Americans as a whole actually increased 11% from 2013 to 2018.
Black Americans outpaced the nation in higher education
In almost every metric we examined, black Americans saw slower growth than the country as a whole. However, black Americans did outpace their peers when it comes to higher education: From 2013 to 2018, the number of black Americans with bachelor’s degrees grew by 13.5%, compared with 9.4% for the country as a whole.
Homeownership fell at a higher rate for black Americans
While homeownership rates fell for Americans overall from 64.9% in 2013 to 63.8% in 2018, an overall decrease of just 1.7%, black American homeownership rates declined at a higher rate. In 2013, 43.8% of black Americans owned homes; the rate went down to 41.8% in 2018, a decrease of 4.7%.
Individual earnings, household incomes are still far below national averages
The median household income grew by 13.7% between 2013 and 2018 for Americans as a whole, with the increase for black Americans roughly on pace at 13.4%. But a wide gap between median household incomes for black Americans remains: black American households bring in about 33% less than American households as a whole, at $40,155 and $60,293, respectively.
When it comes to individual earnings, the wage gap between American workers overall and black American workers in particular actually increased. In 2013, median earnings for black Americans were 16.4% lower than the earnings for Americans as a whole; by 2018, that disparity had grown to 18.2%. So on an individual level, the existing wage gap for black Americans is actually increasing.
Where black Americans are closing economic outcome gaps
To determine where black Americans are experiencing bigger economic strides, we examined two metrics: 1) where black Americans were making the greatest economic advancements; and 2) where black Americans were closing economic outcome gaps in relation to their neighbors. To create the map above, we scored how metropolitan statistical areas ranked in both categories, and tallied the final scores to determine our rankings.
Places where black Americans are making economic advancements
Black Americans are getting ahead in Cape Coral-Ft. Myers metro area
The Cape Coral-Ft. Myers, Fla. metro area is leading the country in economic advancement for black Americans. The population has grown by 17%, median household income is up by 26% and individual earnings are up by 22%. Homeownership is up by 50%, and unemployment is down by 66%. In addition, 25% more black residents of this area are attaining higher education degrees than they were in 2013.
See where else black Americans are making the most economic advancements:
Economic prosperity for the black community isn’t limited to one region: of the top five metro areas, there’s representation in the West, the South, the Midwest and the Northeast.
Economic advancement is sluggish for black residents in Southern states
Unlike the wide spread of metropolitan areas where black Americans are making economic advancements, the cities in this list are much more concentrated to one area: the South. All five of the places where black Americans are making the smallest strides within their own communities are in this region:
In fact, nine of the bottom 10 places, where black residents are advancing the slowest, are in the South; the only exception to this trend is Atlantic City, N.J.
Places where black Americans are closing economic outcome gaps
5 metro areas where black Americans are closing the economic outcome gap
Nationally, the trend shows a widening gap between black Americans and their neighbors across a number of economic factors. There are a few metro areas where that gap is narrowing, and there doesn’t seem to be a strong geographical trend as to where those cities are.
The top five metro areas that are closing the economic outcome gap are spread all over America:
Black residents of San Antonio and Pine Bluff, Ark., are narrowing these gaps in all categories: household income, individual earnings, homeownership, unemployment and higher education.
San Diego, Los Angeles metro areas among the worst for economic equality
The economic outcome gap between black Americans and Americans overall is widening on a national scale. Here are the places that are hit the worst by that trend:
Economic outcome gaps are generally widening in the South: within the bottom 5 places, two cities are in the Carolinas, and two are in Louisiana. However, of the top 10 places in America that see widening economic outcome gaps, the Golden State is home to four of them:
- San Diego-Carlsbad (No. 149/149)
- Los Angeles-Long Beach-Anaheim (No. 144/149)
- Stockton/Lodi (No. 143/149)
- Vallejo-Fairfield (No. 142/149)
However, though the economic outcome gaps of Los Angeles and Stockton, Calif., are widening at a high rate, these metro areas still have some of the smallest gaps compared to other American metro areas.
Comparing economic outcome gaps in cities across America
Taking a closer look at the data, we can determine where particular challenges, like high unemployment or low homeownership rates, affect black residents in certain metro areas. Here are a few key takeaways from the data presented above:
- The unemployment rate in Fort Wayne, Ind. is 192% higher for black residents than it is for residents overall. In contrast, black residents of Dover, Del., see just a 10.2% gap ー which still represents a disparity.
- Higher education is the only economic factor in which many metro areas are closing gaps. Black residents of Riverside, Calif., Pine Bluff, Ark. and San Antonio have closed the gap with the whole of their communities when it comes to earning higher education degrees. Residents of Charlottesville, Va. have seen that gap widen the most: 66%.
- The difference in median earnings between the smallest gap (Riverside, Calif.) and the largest gap (Kalamazoo, Mich.) is about 40 percentage points.
- There are only four metro areas in which black homeowners have closed the gap within 20% — all of them are in the South, specifically in the Carolinas. Minneapolis has the largest gap, at 64%.
LendingTree analysts compared the following data from US Census’ American Community Survey 5-Year estimate for 2013 and 2018 at the national and metropolitan statistical area levels. Metros were limited to those with at least 30,000 residents and a population of at least 5% that identified as black or African American.
- Population of people identify as black or African American
- Median household income for people who identify as black or African American
- Median earnings income for people who identify as black or African American
- Homeownership rates for people who identify as black or African American
- Unemployment rates for people who identify as black or African American
- Rate of people who identify as black or African American who have a bachelor’s degree or higher
The change in these values was calculated as a percentage, and each metric was scored based on where a metro’s change value lay between the highest value and the lowest or zero values across all metros, with a highest possible score of 100 (highest value) and a lowest of 0 (lowest value or values of zero or less). These metric scores were then averaged, but change in population and rate of people with bachelor’s degrees were given a half weight. The highest possible final score was 100 and the lowest was zero.
We also calculated the gaps between the black or African American populations and the entire populations of each metro in each of those areas, except population numbers, for 2013 and 2018. The change in those gaps were then calculated as a percentage, and each of the metric gaps was scored according to their relation between the highest gap increase value and the lowest gap value, for a highest possible score of 100 and a lowest of -100. If the gap for any metric was zero or less in 2018, the metro received a score of 100 for that metric, regardless of how much or whether the gap changed since 2013. Gaps that increased during this period received a negative score in this area, up to -100 if the gap increased by at least 100%. These scores were then averaged at even weight for a final score.
The map was ranked by adding to the final scores for overall change and gap change together, with a highest possible score of 200 and a lowest possible score of -100.