In 2014, I was a graduate student studying psychology at Saint Louis University. That year, the issue of psychological racial biases came to the forefront in the national conversations that followed the shooting of Michael Brown Jr., a young Black man, by a police officer for the St. Louis suburb of Ferguson.
Today, I’m a policy analyst at the St. Louis Fed’s Center for Household Financial Stability. Instead of focusing on psychological biases, I study economic disparities among Black and white people at a time when recent events again have brought racial inequities to the forefront of many conversations.
Studies have suggested that psychological racial biases and economic disparities may be connected.1 The economic disparities also may partly reflect a long history of interpersonal, legal and structural discrimination (e.g., redlining and the impeding of access to GI Bill benefits) that has made it more difficult for Black people than white people to attain wealth.2
Historical Roots for Inequity
The Center expands on the role of economic racial disparities and relevant resources in a statement. For example, we find that in the U.S., Black households earn 61 cents per dollar of white household median income, but own just 10 cents per dollar of white family wealth. Education actually widens racial wealth gaps.
How Missouri Compares on Disparities
However, are racial economic disparities in my state, Missouri, better or worse than for the U.S. as a whole? (If you are curious about your state, you can find that information in an article in our Bridges publication that maps it out.)
In true “Show-Me State” fashion, here are Missouri’s data from the 2018 American Community Survey.
- Black Missourian households earned 62 cents per dollar of white Missourian income at the median. The typical (or median) white household had an income of $58,000, whereas the typical Black household had $36,000.
- Over a quarter (26%) of Black Missourians were in poverty in 2018, a figure over twice as high as that for white Missourians (11%). Nationally, the racial poverty gap was smaller: 13 percentage points.
- At 4 percentage points, national and Missouri-specific racial health insurance gaps were the same. However, both white and Black Missourians were slightly more likely to be uninsured (8% and 12%, respectively) than people in those groups were nationally. These gaps have potential consequences—they could contribute to disproportionate loss of life in Black communities due to COVID-19.
Black Median Household Income per $1 of White Household Income
SOURCES: American Community Survey (2018) and author’s calculations.
NOTES: Heavier shading indicates a smaller gap, or less inequality. States/areas too geographically small to show an estimate are as follows: Hawaii, $0.87; Vermont, $0.65; Massachusetts, $0.62; Connecticut, $0.57; Rhode Island, $0.69; New Jersey, $0.59; Delaware, $0.63; Maryland, $0.71; and District of Columbia, $0.32. State estimates with a margin of error larger than 30% are not provided: New Hampshire, South Dakota and Wyoming.
Movements Focus on Equity
The trends in Missouri closely replicate those in the greater U.S. Median household income gaps for each state can be found in the figure above. You also can see figures for poverty and health insurance in the Bridges article. Note that if you’re hoping to find your state has achieved racial economic equity, you will be disappointed. In every state with sufficient data, white people had more favorable outcomes than Black people.
State-level variation may reflect, in part, differences in state-level policies toward disproportionately Black low-income residents. For example, research has found that states with larger Black populations generally have less generous and more restrictive welfare policies.4
Various social movements have started to place a focus on racial equity. Forward Through Ferguson, for example, resulted from organization surrounding the shooting of Michael Brown Jr. Then, as today, people pushed for change and encouraged national conversations on racial equity.
These conversations have prompted many to tune in, including leaders within the Federal Reserve System. They have argued that inclusive opportunity and success are critical to a stronger economy, and have called ending racism both a moral and economic imperative. And I am encouraged by my colleagues’ related efforts, which strive for a strong economy that benefits all Americans.
Notes and References
1 One paper that outlines some of those findings is “Across the Thin Blue Line: Police Officers and Racial Bias in the Decision to Shoot,” which was published in the Journal of Personality and Social Psychology in 2007.
2 Research from the Center suggests that structural and historical factors have contributed to wealth gaps. For example, see the 2017 article “College Is Not Enough: Higher Education Does Not Eliminate Racial and Ethnic Wealth Gaps.”
3 For example, see “Institutional Racism against African Americans: Physical and Mental Health Implications” in the 2006 book “Addressing Racism: Facilitating Cultural Competence in Mental Health and Educational Settings.”
4 See the 2017 research report “Why Does Cash Welfare Depend on Where You Live?”