The Black Woman’s Economy: Changing the Game

DeLayna Michele Elliott
World Fidelity Life, Advisor & Financial Coach


While the current economic turbulence of rising interest rates, higher housing prices, and a looming recession threaten the financial conditions of every sector of the American landscape, research reveals that Black Women are advertently impacted by four key economic gaps simply based on race: Income, Housing, Business Capital, and Higher Education. Not to dismiss the global effects of COVID 19 on the economy as a whole, but it is prudent to understand that “Black Women” have suffered an ambiguous role in our society, when it comes to their contributions, financial or otherwise.

The term “Black Woman’s Economy” defines the eco system created by Black Women to survive in a hostile economic climate. Data from financial institutions, historical writings and the author’s own practitioner experience will highlight the existing income inequities; present historical accounts of black women’s contributions to the financial system and conclude with recommendations helpful in improving the outcomes not only for Black Women but all women who aspire to participate in a healthy personal economy.

The reader is encouraged to assess the data, review the facts, and then choose to change financial conditions by adopting a new mindset towards money, by seeking further financial education, by building new relationships with qualified financial professionals and identify and heal “money wounds” caused by economic injustices. To change the game of economics, the Black Woman must unlearn history as told through bias education systems, self-educate her true history, and apply the economic tools now available and accessible.

The Business Case

Income Inequality and the Black Woman is not a new concept but a paradigm that continues to plague black women today. Black Women bear the unique brunt of experiencing both gender and racial discrimination simultaneously. The many reasons for the disparities that persist for Black women, include systemic discrimination in recruitment, hiring, and promotions. They are underrepresented in professional and managerial jobs (jobs that pay the most), while being overrepresented in low-paid occupations.

Rich History

Economic Contributions: During late 19th and early 20th centuries the consensus among Black Women’s organizations was if economic power was to be a reality, African American must own and patronize Black Owned Banks. Between 1888 and 1930, in the height of the oppression, African Americans opened over a hundred banks and thousands of other financial institutions. One being the St. Luke Bank in Richmond, Virginia: the first and only bank run by black women. Maggie Lena Walker was the first African American woman to charter and serve as a bank president1

Social and Political Contributions: Black women were highly significant in the universal suffrage movement, which fought for the Women’s right to vote.

Nadine Helen Burroughs, a prominent black educator, religious leader, and advocate for African American rights, and women’s suffrage, devoted her life to empowering black women. However, her efforts and the efforts of many others were largely ignored when Susan B. Anthony and Elizabeth Cady Staton wrote the History of Woman Suffrage in the 1880s which showcased the efforts of white women.  As a contributing writer for newspapers and magazines owned by Black Americans, Nadine challenged the systemic injustices against Black Americans and encouraged her readers to take responsibility for changing their own conditions. Her collection of work is found in the Manuscript Division, Library of Congress, Washington, D.C.2

It has been more than 100 years since the fight for economic justice for black women. Why is there no more progress?

Current Analysis

The Pay Gap

A reality that has been overlooked for decades in all aspects of the workforce. This inequity has negative impacts on the spending power of the black household.  According to the Institute of Women’s Policy Research, Black women make .58 cents to every $1.00 dollar earned by white men.3

What are the implications of this disparity? Black women pay higher interest rates when purchasing cars, credits card, and homes mortgages. Not to mention, suffer the daunting task of paying higher prices at the gas pumps and grocery stores. Yet are still expected to compete financially as if on equal footing.

The illustration below identifies the disparity between white men and white women, and the further marginalization of black women.  To go from 42 percent less pay for Black women as compared to 21 percent for white women comparatively to white men is not just an imbalance it is outrage.

After a series of nationwide protests and outcries from women demanding action, The Paycheck Fairness Act reached Congress and passed in the House on April 15, 2021. (This bill addresses wage discrimination on the basis of sex, which is defined to include pregnancy, sexual orientation, gender identity, and sex characteristics.) Paycheck Fairness Act-Passed House (04/15/2021) Unfortunately, as of today, this bill has yet to pass in the Senate.

Head of Household Single Income Earner

Three in four Black mothers, are recognized as breadwinners for their families’ households as shown below. 4 When 74% of the black household depends on the income of a Black mother who is earning .58 to every $1.00 earned by white men, the impacts are daunting. There is less available disposable income for housing, groceries, health care and less to contribute towards qualified retirement plans like a 401(k).  Additionally, her income is further exposed to higher inflation and the volatility of the stock market.

Housing Discrimination

Researchers at the University of Rochester Medical Center (URMC) cite redlining policies established more than eight decades ago, effectively trapped Black families and other people of color into low income and segregated neighborhoods, impacting not only the socioeconomic status of the Black Woman, but also her health. Studies in the population of a single midsized U.S. city, indicate historic Federally charged redlining was associated with worse outcomes in pregnancy and childbirths experienced by Black women today.

These redlining policies, which remained in effect until the 1960s, led to decades of community disinvestment, concentrated poverty in inner city neighborhoods, and denied residents the ability to build intergenerational wealth through home ownership.

Lower Net Wealth due to Lack of Business Capital

In a recent article entitled “The Bigger Picture: Black Womenomics”, a Goldman Sachs study depicted how black women have a significantly lower net wealth as compared to the median white household. The study discussed how academic research points to the importance of private business ownership.  Yet, median Black households own nearly 90% less wealth than median white households due to the underrepresentation in business ownership among Black women. Black women make up roughly 6% of the U.S. population, however only 2% of businesses are owned by Black women. Only 0.05% of single Black women own their own business – a rate that is 24 times lower than that of single white men; consistent with a large entrepreneurship gap 5

Lower Higher Education Degrees yet High Student Debt

To add additional context, Black women are traditionally taught the old paradigm that a good education will lead to a good paying job with retirement benefits. In many Black households, it is also believed that having a good education will close the wealth gap. However, a recent Wall Street Journal analysis of Federal Reserve data suggests that the median net worth of households with Black college graduates in their 30s has plunged over the past three decades to less than one-tenth of the net worth of their white counterparts. Now, the generation that hoped to close the racial wealth gap finds itself watching it grow even wider.6

Access to higher education is thwarted by the lack of funds to pay the high costs. It is estimated that $90 billion to $113 billion in lifetime income is lost from the inability to access higher education.

Strategies to Change the Game

The combined negative effects of pay gaps, housing discrimination, less access to business capital and inability to attain higher education, invokes the Black Woman to create an eco-system favorable for sustainability and success.  Its time to ‘Change the Game’. Herein are some recommended wealth strategies for improving the Black Woman’s Economy.

Engage in Entrepreneurship

Technology has made it so much easier to go into business.  Black women are the fastest growing group of entrepreneurs accounting for 42% of all female demographics.  Business starting rates grew over 50% between 2014-2019. This growth may reflect the lack of opportunity in the traditional workforce – many start businesses to survive rather than pursuing market opportunities,” said Tosh Ernest, Head of Business Growth & Entrepreneurship and Financial Health & Wealth Creation for Advancing Black Pathways at JPMorgan Chase.

Contrary to popular belief that Black women are a huge part of the mass resignations, data does not prove this to be so.  Black women are working, and starting businesses, many do both simultaneously despite the lack of access to business capital.

Financial institutions like JP Morgan Chase and Wells Fargo are making capital available to Black women entrepreneurs to help fund creative ideas. Thereby advancing racial equity and economic opportunity.

Engage in Home Ownership

Homeownership is the key to building mutigenerational wealth. Wells Fargo has committed $60 million in “Wealth Opportunities Restored through Homeownership” (WORTH) grants projected to support 40,000 homeowners of color in eight markets that have significant homeownership gaps between white and minority families. WORTH grants will run through 2025 and will fund public-private partnerships that develop and implement plans to address the root causes of those homeownership gaps. 7

This is one of many opportunities available to Black women who are serious about homeownership. Implementing a homeownership strategy will help increase the multigenerational wealth needed to propel forward.

Engage in Self-Education

Self-education is creating new opportunities for advancement. Tradition education is too slow to keep up with the fast pace of new technology. 8 Black women can take advantage of the new ways of creating a financial future in this new economy. With the vast array of jobs opened by technology, one must only determine what field is desired, put the time and effort into learning a new skill, master the craft and seek ways to implement the learned skill.  Reading, podcasts, YouTube and other online learning tools make learning fun and assessable. Many classes are free and available when the learner is available.

Further Recommendations:

To take back your power, key experts recommend invoking these 8 keys to ensuring your financial health:

  1. Pay Yourself First: try to set aside income for your savings (about 5-10%).
  2. Create a Safety Net: build up emergency savings to cover 3-6 months’ worth of expenses.
  3. Pay On Time, every time: improve and maintain your credit score by paying your bills on time.
  4. Review your Life Insurance annually: protect what counts by checking your insurance coverage every year.
  5. Track your spending: make sure you know where your money is going every month.
  6. Pay down high-interest-rate debt: pay less on interest by paying down the debt that costs you the most.
  7. Know where your credit stands: check your credit report annually.
  8. Save for better retirement: save early to benefit from compounding interest.


1 Shennette Garrett: Banking on Freedom: Black Women in U.S. Finance Before the New Deal, May 2019

2 Smithsonian – National Museum of African American History & Culture

3 Ariane Hegewisch and Eve Mefferd, “Lost Jobs, Stalled Progress: The Impact of the ‘She-Cession’ on Equal Pay,” IWPR #C505 (September 2021),

4 Julie Anderson, “Breadwinner Mothers by Race/Ethnicity and State,” IWPR #Q079 (April 2020), accessed Feb 16, 2022, Note: Breadwinner mothers are defined as single mothers who head a household or partnered mothers who generate at least 40 percent of a household’s joint income.

5 Goldman Sachs Global Investment Research- the Bigger Picture

6Tatjana Meschede, Joanna Taylor, Alexis Mann, and Thomas Shapiro Economic Research, Federal Reserve Bank of St Louis-Article First Quarter 2017, Vol. 99, No. 1Posted 2017-02-15 –

7 Paul Turner, News Release Category: WF-PS Media, 415-603-7023 Investor Relations John Campbell, 415-396-0523 Source: Wells Fargo & Company

8 Ransom Patterson, Self-Education: The Skill That Will Help You Stay Ahead-Last Updated January 29, 2021