A surging stock market despite a global pandemic and nationwide protests is calling attention to the wealth gap faced by black communities in the United States.
Optimism over an economic rebound has inspired a week of positive movement in the equities market, as the Dow Jones Industrial Average rose almost 7%. Since market lows on March 23, the S&P 500 has had the largest 50-day rally in its history, according to LPL Financial.
But every day after market close, protesters in cities across the country have taken to the streets following the death of George Floyd under the custody of Minneapolis police.
The protests have sparked conversations not just on police brutality but on socioeconomic factors that support the systemic racism faced by black communities.
The stock market is one example of the wealth divide.
Data from the Federal Reserve’s 2016 Survey of Consumer Finances shows that 61% of white families have some stock holdings, compared to only 31% of black families.
Not only do fewer black families have stock holdings, but those that do also have far smaller stock holdings. The median white family had over $51,000 in stock holdings whereas the median black family had only $12,000.
With only a third of black families seeing a benefit from the stock market rise, more families are likely to have no cushion against the backdrop of massive job losses in the face of the COVID-19 crisis.
Although 59% of all adult black Americans were employed prior to the COVID-19 crisis, figures from the Bureau of Labor Statistics show that less than half (49.6%) now have a job.
The worry: that wealth inequality will only worsen.
“Wealth is assets minus liabilities,” Dr. Fenaba Addo, an associate professor at the University of Wisconsin at Madison told Yahoo Finance. “But it means so much more: it’s power, it’s connections, it’s insurance.”
The wealth gap
The same Fed survey, as analyzed by the Brookings Institution and the Hamilton Project, shows that the median white family has a net worth of $171,000, a dramatic difference compared to the median black family’s net worth of just $17,600.