by Moorea Benmosche, Public Policy Intern

The Covid-19 pandemic was a wake-up call. People of color were hardest hit by Covid, as they entered the pandemic with far fewer resources than their wealthier and whiter counterparts. The lack of resources in communities of color left them less prepared for the unexpected crises that arose due to Covid. The wealth gap is a tremendous and ongoing disparity that acts as a barrier to the socioeconomic success of millions of Americans. Broader than a snapshot of one’s income at a specific point in time, wealth is simply the difference between one’s assets (house, business, savings, etc.) and debts (credit card, college, medical, etc.). Most heavily impacted by the wealth gap are those who have historically been pushed to the sidelines of decision-making and society at large: people of color and women. Women of color, who are situated at the intersection of marginalized racial and gender identities, have a unique experience that is not discussed or studied nearly as much as the isolated race and gender wealth gaps.

Most of the existing discussions, research, and advocacy surrounding this topic focus on the income gap. However, it is crucial to pinpoint that income and wealth are not the same. While the income gap for women is significant, it is nowhere near as large as the wealth gap. Women earn 79 cents to every dollar white men earn, but own only 32 cents to every dollar owned by a white man. That said, income, in conjunction with a variety of other factors, does impact one’s ability to build wealth. Women are also twice as likely to be working part-time than men and make up the majority of the low-wage and minimum wage worker population while simultaneously being underrepresented in higher-paying industries. Women of color are positioned within more complex disparities that stem from both racial and gender discrimination. Higher percentages of women of color live in poverty: 9.6% of white women live in poverty while 21% of Latina women, and 23% of Black women live below the poverty line. Subprime lenders have also targeted women of color: Black women are 2.5 times more likely to receive subprime mortgages than white men, Latina women are 1.5 times more likely, and Asian Pacific Islanders are also targeted more than their white counterparts. Despite the usual emphasis on the wage gap, factors beyond income clearly contribute to the wealth gap we see today.

The Covid-19 pandemic has also disproportionately affected the ability of women of color to acquire wealth. Women make up 77% of the healthcare worker population and had to mobilize to help combat the spread of Covid quickly. Women also tend to take on a sizable portion of the domestic labor at home, which was exacerbated due to the closure of schools and other childcare facilities during the pandemic. Due to the lack of wealth in communities of color, non-white people entered the pandemic with more economic and social vulnerability. Women of color are more likely to have pre-existing health issues, which puts them at greater risk of contracting Covid, people of color are less likely to have health insurance to help pay for unexpected medical bills, and Asian populations have faced heightened levels of discrimination and xenophobia. The Covid-19 pandemic’s uneven impact set people of color, especially women of color, back even further than we were before.

Typically, wealth is compared between members of different racial groups, but in analyzing the wealth gap for women, it is also important to examine the gender wealth gap within communities. When comparing men and women of the same race, wealth inequality is relatively low in Black and Latino communities but much higher between white women and men. Black and Latine communities have low levels of wealth regardless of gender, with the median wealth for single Black women being $200 compared to single Black men having $300, and the median wealth for single Latina women being $100 and single Latino men having $950. These numbers pale compared to the median wealth for single white women, which is $15,640 and $28,900 for single white men. This demonstrates that gender wealth disparities are much greater for white women than for women of color. Race seems to be the driving factor contributing to wealth disparities, while gender is a secondary disadvantage.

Relationship status is also an important factor in discussions about wealth, and the wealth levels of non-single women are notably different than those of single women. There is still a considerable wealth gap for couples of color who file their taxes jointly; the median wealth for Black and Latine households is $11,000 and $14,000, respectively, while the median wealth for white households is $134,000. Women in marriages and serious relationships have higher levels of wealth since they are not the only breadwinners in their households, but the racial wealth gap persists regardless of relationship status.

The most powerful methods for women of color to build wealth are through business ownership and homeownership. The Women’s Business Enterprise National Council expands opportunities for women of color to own businesses and build business equity. Groups that work to increase the number of women of color business owners already exist but need to be strengthened and supported. We must also focus more heavily on homeownership, as housing makes up 2/3 of a household’s total wealth. To increase homeownership for people of color, we must reexamine biased mortgage criteria and provide resources for down payment assistance like refundable first-time homebuyers’ credits. Mortgage applications must also be adjusted to account for gaps in employment due to Covid. Furthermore, we must begin to view renting as a gateway to homeownership, so long as rent is affordable. Hence, housing assistance for renters in the form of vouchers and emergency rental assistance should be implemented so they have the capacity to save and eventually become homeowners.

There are also a variety of additional solutions that can be implemented as we work to close the wealth gap for women of color. Eliminating student debts and implementing supportive family care policies that make healthcare affordable are crucial first steps to increasing wealth for women of color. Broadening initiatives like the California Secure Choice Program to open up retirement account access to smaller employers, creating portable benefits for independent contractors and domestic workers, and expanding tax credits like the Earned Income Tax Credit and the Child Tax Credit can also help to build wealth for women of color. Additionally, offering financial coaching and education for women like the Mission Asset Fund in San Francisco can provide support to build credit and help reduce barriers for women to save.

But even beyond these policy suggestions, an ideological shift is the most vital change to begin effectively supporting women of color. Here at CCB, we focus on centering the voices of those at the margins of society and policy making. Part of our work includes understanding and researching the racial wealth gap through a lens that acknowledges the overlap between race and other identities that impact one’s quality of life. Throughout history, those in power have viewed people or color as only consumers instead of contributors to the economy and society in general. This has led to the belief that the wealth gap is due to individual behaviors of communities of color. In reality, the gap results from structural and institutional racism manifesting in “race-neutral” policy choices.

Women of color need to be included in these conversations so that the nuances that most might miss can be flushed out before policies have any additional adverse effects. If women of color are not sitting at the table where these decisions are being made, the outcomes will be worse for us and for society in general. And those who think they’re supporting equity might unintentionally contribute to the problem due to their inability to truly understand the experience of living in America as a woman of color.