As North Carolina continues to contend with an unemployment rate of 6.5 percent and, according to 2014 data, a poverty rate of 18 percent, leaders looking for creative and innovative ways to strengthen the state’s economy are faced with an unexpected culprit – the racial and gender wealth gap.
The racial and gender wealth gap is defined by the significant gap in assets versus debt between minority and white households in this country. 2009 national government data indicates that the median wealth of white households is 20 times that of black households and 18 times that of Hispanic households. This gap in resources and the inability for communities of color to accumulate wealth is having a significant impact on many communities’ capacity to strengthen and grow their local economies and is diminishing their competitiveness in a global economy.
As North Carolina continues to find itself in the midst of a challenging economic landscape, being competitive in the global marketplace, strengthening local economies, and supporting strategies that spur economic growth is more critical than ever. But as we examine North Carolina’s statistical data, we are faced with a sobering reality. Pre-recession data indicates that North Carolina ranks 7th in terms of having the largest wealth gap between minority and white households. The wealth of North Carolina minorities is four cents on the dollar compared to their white counterparts. What’s more, North Carolina has the 9th largest asset poverty rate, where families have less than three months of resources to subsist at the federal poverty level, which is approximately $24,000 for a family of four.
North Carolina is not alone in this struggle. Communities across the country are addressing this issue by adopting creative strategies and programs. Insight Center for Community Economic Development, a national organization dedicated to building economic health and opportunity in vulnerable communities, highlights the need for collaboration between private, public, philanthropic, and community institutions to implement strategies that can create long-term sustainable impact and institutional change. These include:
- Providing financial education, counseling, and savings strategies;
- Creating opportunities for first time homeowners and homeownership preservation through foreclosure prevention;
- Investing in comprehensive savings strategies that include employer benefits, peer savings circles, accessible mutual fund programs;
- Fostering microenterprise development and the cultivation of worker cooperatives; and
- Supporting the purchase of shares in commercial development by families and groups.
This list serves as guide for communities that are overlaying the racial and gender wealth gap, alongside traditional economic indicators, as an important piece in addressing the economic vitality of their communities. Through their willingness to surface the sometimes harsh realities of the racial and gender wealth gap, communities across the state can better position themselves to address glaring obstacles that could inhibit their success.
The Z. Smith Reynolds Foundation seeks to narrow the racial and gender wealth gap by supporting equitable, inclusive, and sustainable economic development efforts that create pathways to build, retain and transfer wealth to the next generation. It invests in organizations, projects, and coalitions that provide measurable evidence of progress towards systemic change by:
- Strengthening equitable and inclusive local and regional economic efforts;
- Supporting a sustained base of organizations and networks that address racial and gender wealth disparities through systems and/or policy reforms; and
- Raising awareness by soliciting research and evaluation efforts that build knowledge and financial resources that inform grantee efforts, the field, and the State.
Too many North Carolinians with the lowest wealth are prevented from participating in the mainstream economy, which is hurting the economic progress of the state as a whole. North Carolina’s ability to explore strategies that can ensure economic opportunities shared by all will help provide essential security for North Carolina individuals and families and help ensure our state’s economic competitiveness moving forward.
To learn more about the Z. Smith Reynolds Foundation’s strategies for narrowing the racial and gender wealth gap, visit www.zsr.org. For information about possible strategies that may be useful in your own community, visit Insight: The Center for Economic Development.