Group Aims to Cut Racial Wealth Inequality
There’s around a 90% wealth gap between Black and White Americans, but a new group that includes prominent companies and nonprofit groups has a better number in mind: zero.
The NinetyToZero group, composed of Goldman Sachs, the ACLU, Starbucks, and the Wharton School of the University of Pennsylvania, among others, announced Tuesday it has laid out a roadmap for tackling this wealth gap by recruiting, hiring, and supporting Black talent and increasing capital for Black-owned and Black-led businesses. The initiative is being “incubated” by the Robin Hood Foundation (a New York-based nonprofit organization not to be confused with the trading app), but will eventually become independent of the foundation.
The exact gap between Black and White wealth is different depending on how you measure it: By median household wealth, Black families have 12.8 cents for every dollar owned by Whites, according to the Federal Reserve’s most recent Survey of Consumer Finances. By the Fed’s latest measure of overall wealth owned by the two groups, Black Americans have 4.8 cents for every dollar owned by White Americans. The corporate-led effort takes a very different approach than some economists who have recently argued that Black households should be given large cash transfers as reparations for slavery.
"More than 20 years of building our investment in Black communities have taught us that the way to narrow the wealth gap is to widen the door of opportunity," said David M. Solomon, CEO of Goldman Sachs, in a statement. "We've also learned that while setting long-term goals is helpful, it's in meeting concrete, short-term goals that progress is made, and now, with our incredible partner organizations, we're excited to get to work."
The organization’s goals include establishing goals for hiring Black talent and working with Black-owned banks and other financial institutions to increase capital and activity to Black-owned and led businesses. It’s not just about fairness, though: Closing the gap could increase U.S. gross domestic product by $1.5 trillion by 2028, estimates McKinsey, a consulting firm that is also a partner in the initiative.