Income vs Wealth - The Big Lie About the Racial Wealth Gap

As the largest Black owned bank in the country, we want to make sure you understand the difference between “income” vs “wealth” and why Black Americans are not as wealthy as white Americans.

It is a “Big Lie” that the racial wealth gap is because we spend too much, or we are not good with money!


Income vs. wealth – different definitions

Income is the amount of money you receive on a regular basis, while wealth is the length of time you can maintain your current lifestyle without additional income from your job.

Some of the major factors that can get in the way of building wealth are:

  • Spending on basic necessities like housing
  • Paying back student loans
  • Spending on our children, parents or grandparents

These expenses are necessary to live and prosper. Yet, if we have insufficient income, we have less to save and less to take the necessary steps to build generational wealth.


Why is there a racial wealth gap?

The Federal Reserve Bank of Cleveland published a study in 2019, What’s Behind the Persistent of the Racial Wealth Gap?, which proved that “ONE factor accounts for the racial wealth gap almost entirely by itself: the racial income gap”. In other words, if Black Americans were being paid equitably since 1977, there would be no wealth gap today! The racial wealth gap is not due to Black Americans overspending (the Big Lie!), it is America not paying us equitably for our work! Systemic racism in employment from slavery to Jim Crow to today has impeded our ability to build wealth.


What can you do to close the wealth gap for your family?

  1. Public policy is needed to address discrimination that negatively impacts your bank account. We need elected officials who will make the public policy changes needed to address racial disparities. So, vote…even during off cycle elections!
  2. Yet public policy moves slowly. In the meantime, focus on the one transaction that will close the wealth gap for your family. For each of us, the one transaction can vary…but all of us should focus on our one transaction: a will, life insurance, a profitable business, homeownership, savings and investments or an improved credit score. Gather your family together. Claim your ONE in 2021!
  3. Join us for our FREE #OneTransaction Virtual Financial Conference on Juneteenth, June 19, 2021. Presenters include: Tiffany Aliche, The Bugetnista and award winning financial education teacher, Sharon Epperson, Senior Personal Finance Correspondent for CNBC, Karen Hunter, host of the Karen Hunter Show on Sirius Urban View, Daymond John, globally recognized from ABC’s Shark Tank, founder and CEO of FUBU and a Presidential Ambassador for Global Entrepreneurship, Calvin Martyr, founder of #BlackOutDay2020 and The Blackout Coalition, Everett Sands, founder and CEO of Lendistry, a Black-owned SBA Preferred Lender, Michelle Singletary, personal finance columnist and author of upcoming book “What To Do With Your Money When Crisis Hits”, Kemberley Washington, CPA and Tax Analyst with Forbes Advisor among others. Register for the #OneTransaction Virtual Financial Conference now! Space is limited.

Yes, we need equitable pay. We can also take ONE step to close the racial wealth gap for our families.

OneUnited Bank

OneUnited Bank, the nation’s largest Black-owned bank and FDIC insured, understands we have to focus on money and technology to close the racial wealth gap. With your support, by simply opening and actively using a OneUnited Bank account, we will continue to accomplish our mission!

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