(CNN) — Editor’s note: An earlier version of this story and headline misstated the findings of the McKinsey study on wealth. It has been updated and corrected.
An estimated 19% of Black American families, roughly 3.5 million households, have a negative net worth because of a history of discriminatory policies from the government and private industry that has hindered their accumulation of wealth over time, according to a new McKinsey & Company study released Thursday.READ MORE: Bus Industry Still Struggling To Recover From Covid-19 Pandemic
Just 8% of White households have a negative net worth today by comparison, according to the global management consulting firm’s comprehensive report on the economic state of Black America. An additional 4.3 million Black households have a net worth of less than $10,000, the study’s authors said.
The analysis conducted earlier this year examines major occupational and economic gaps facing Black Americans. The study’s authors said Black workers make up 12.9% of the nation’s labor force, but earn only 9.6% of total US wages.
Disparities hurt broader economy
Employment disparities along racial lines have resulted in a $220 billion annual gap between the wages earned by Black Americans today and what they would be earning if their occupational numbers across business sectors were proportional to their percentage of the US population, the study noted.
“Achieving this scenario would boost total Black wages by 30% and draw approximately one million additional Black workers into employment,” the study said.
Lead author Shelley Stewart III says addressing the major wealth disparities between Black and White households has larger implications for the living conditions of all Americans, the study found.
“The lack of participation [by Black Americans] economically has substantial dampening effects for the broader US economy,” Stewart told CNN Business.
The study also quantifies how Black Americans, who make up about 13% of the US population, are concentrated in lower-wage occupations and underrepresented in higher-paying careers. Black workers represent just 5% of the nation’s physicians and 4.5% of its software developers.READ MORE: Carroll County Twins Sentenced To Federal Prison For Possession Of Child Pornography
Yet roughly 35% of all US nursing assistants, an occupation with a median wage of just $23,000, and one-third of all security guards and school bus drivers are Black.
“The racial wage disparity is the product of both representational imbalances and pay gaps within occupational categories and it is a surprisingly concentrated phenomenon,” the study authors wrote.
Double hurdle of sexism and racism
McKinsey says the advancement of Black women into higher-paying positions is critical to addressing these disparities due to the economic role many play in their families. They cite a September McKinsey analysis of 590 US corporations that determined only 58 Black women are promoted into manager roles for every 100 men of all races.
“Women of all races are less represented in leadership roles, but women of color face double hurdles of sexism and racism,” the study authors wrote.
Stewart says these imbalances can’t be solved by Black Americans alone. A combination of intervention from both the government and private industry are key.
“We have a particular moment, which unfortunately was prompted by the murder of George Floyd and the disproportionate impact of Covid 19 impact on Black Americans,” he said, “to really re-examine that we approach racial justice through this frame of broader economic participation.”
Correction: An earlier version of this story misstated how many Black Americans have a negative net worth. It is 3.5 million Black households. It also misstated the figure for White Americans. The study found that 8% of White American households have a negative net worth.MORE NEWS: Volunteers Help The Baltimore Tree Trust Revitalize An Empty Space In Cherry Hill
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