Wealth, typically defined as the total sum of one’s assets minus one’s debts, is essential for understanding financial health in cities like Atlanta. Wealth is a better indicator of whether or not a family can survive economic shocks like the loss of income. Wealth includes assets that families can access to take care of financial needs and even allows families to borrow from themselves. More importantly, wealth gives families the ability to not only dream of what their own future and their future generations may be able to build, but it also helps families make those dreams a reality.
While the benefits of wealth are powerful, wealth is not justly distributed in Atlanta, across the South, or within the United States. The Atlanta metro (MSA) has the second-largest Black population in the nation and is home to five percent of the country’s total Black population. Put simply, one in every 20 Black people in the country lives in the Atlanta area. Additionally, Black residents make up just under half of the total population in the City of Atlanta, comprising the largest racial-ethnic group.4
Given the size of the Black population, one might associate Atlanta with significantly greater Black wealth outcomes compared to other large cities and metros, but this is not the case. In the City of Atlanta alone, the wealth of white households ($238,355) is 46 times more than that of Black households ($5,180).5 This is far worse than the national wealth divide picture. Nationally, the median wealth for white households ($194,043) is 12.5 times more than it is for Black households ($15,499).6
A local understanding of the state of Black wealth is critical for understanding the scope of the problem. National estimates of the median wealth of Black households ignore the dynamic impact of local economies, policy contexts, and more on the day-to-day lives of Black people. A race-explicit examination of wealth illuminates the enormous magnitude of the problem. Research shows that it could take Black families 228 years to earn the same amount of wealth that white families have today, using national estimates of the racial wealth divide.7 Given the larger wealth divide in Atlanta, the path to wealth parity among Black and white households is far more bleak.
Black wealth outcomes that we examine in this report are the present-day manifestation of a history of racial, economic, and policy violence enacted against Black Atlantans for more than a century. Fundamentally, those interested in building Black wealth must acknowledge that Black people were this nation’s wealth and that the value of their contributions through labor – both paid and unpaid – still enriches a white majority. As public policy professor William Darity and writer Kirsten Mullen assert, “[wealth] is the best single indicator of the cumulative impact of white racism over time.”8
Atlanta’s growth as an economic hub shortly after its incorporation in 1847 was fueled primarily by the junction of railroad lines and enslavement. By 1860, Atlanta was home to 1,914 enslaved Black people and only about 25 free Black people.9 The business of human trafficking and enslavement was the foundation of the Atlanta region’s economy. The movement of free and enslaved Black Atlantans was highly restricted in the city. The Atlanta City Council passed a series of measures in the years leading up to the Civil War to restrict Black people in the city. Still, despite the oppression of slavery, some Black residents conducted business, owned property, and founded churches.10
After Atlanta fell during the Civil War and the Emancipation Proclamation was signed, hope emerged for Black residents, and more moved to the city. A new charter for the city allowed Black men to vote, and as a result, Black elected officials were sent to the Atlanta City Council and the Georgia General Assembly. However, white leaders retaliated against the new representation of Black leadership. State legislators expelled newly-elected Black representatives while the City Council passed measures to suppress Black votes. Additionally, Black Codes were passed by the Georgia General Assembly immediately after emancipation to codify the subordinate treatment of formerly enslaved Black people. For decades to follow, lawmakers implemented and expanded egregious laws that blocked civic and economic opportunity and relegated Black Atlantans to the lowest rungs of the economic ladder.11
Though Black people in Atlanta experienced little political progress under Black Codes and Jim Crow, many did achieve a measure of economic success. Most Black economic development in the state occurred in Atlanta, where a class of Black professionals emerged from the Reconstruction era. Black Atlantans established businesses, formed financial institutions such as banks, and made capital available for real estate and other endeavors.
The increasing Black population and the rise of the Black professional class in Atlanta stoked racial terror from the white population. Fears about the economic and political gains being made by Black residents were sensationalized in the media and eventually led to white mob violence in the form of the Atlanta Race Massacre of 1906. The massacre led to the economic depression of Atlanta’s Black community once more and contributed to the passage of statewide restrictions on voting, public accommodations, and more limiting opportunities for Black Atlantans to thrive.12 In the decades that would follow, Atlanta was transformed by urban renewal and housing policies that subsidized suburban growth for white residents, leaving the city underfunded and limiting the ability of Black families to build wealth.
Atlanta played an enormous role during the civil rights movement of the twentieth century. Enhanced federal protections and the passage of Civil rights laws during the 1960s marked a new resurgence of Black political and economic activity.13 Despite the machinery of white supremacy, Atlanta grew its population of the Black middle class and became a model of Black mayoral power beginning in the 1970s (at the time of this report, Atlanta has elected a Black mayor for every term since Maynard Jackson was first elected in 1973).14 Atlanta also has a rich legacy of Black and white civic and community leaders working together to stand apart from other southern cities regarding the racial tension and unrest that marked the twentieth century, positioning Atlanta as the “city too busy to hate.”15
Today, 31 Fortune 1000 companies are headquartered in Atlanta, contributing to economic growth. In 2018, Atlanta was ranked as the number one place for Black residents to do well economically by Forbes Magazine, where an author wrote that “with [Atlanta‘s] historical black [sic] universities and strong middle class, [Atlanta] has long been described as the black [sic] capital of America, and its thriving entertainment scene has given rise to claims that it has become a cultural capital as well.”16
While recent developments and news headlines in Atlanta are positive, one must wonder why wealth disparities persist despite a history of Black economic and political progress. For one, Atlanta has high levels of residential segregation.17 For more than 30 years, Atlanta has held the title for having the highest levels of income inequality in the nation, all while Georgia is also ranked as the number one place to do business. Black political control of municipal governments has not solved these deeply rooted problems. Black leaders can play a major role in many of the policy issues affecting Black wealth, but they are under immense political pressure to follow economic development policies to lure and retain business in the city. Taken together, the history and current economic development practices help to explain why Atlanta suffers from such extreme segregation and income and wealth inequality.
When the Atlanta Wealth Building Initiative published the initial report on Atlanta’s wealth picture for Black residents in 2018, the total Black population was 52 percent.18 Today, the population reflects a steady decline to 48 percent.19 The decrease in the Black population of Atlanta reflects a reversal of historical trends, which indicates that the market pressures and policy environment are making it increasingly difficult for Black families to live in the city.
One indicator to help us understand the state of Black wealth is the share of families with zero net worth. The percent of households with zero net worth is a measure of households with no wealth or negative net worth (i.e., the household debt is greater than household assets). This measure captures the severity of wealth inequity and demonstrates that some households have no financial cushion to help them weather a financial crisis or invest in their future.
Another indicator of wealth is the asset poverty rate. Asset poverty expands the notion of poverty to include how much of a financial cushion a household has to weather a financial crisis such as a job loss, medical emergency, or the need to fix a car. Experts use a standard measure of three months’ living expenses at the poverty level to define a conservative financial cushion for a family that loses its income. Asset poverty factors in assets that can be liquidated (like a vehicle, home, or business) to help cover day-to-day expenses in the event of a financial emergency. Half (50 percent) of Black households in Atlanta are asset poor, meaning that a loss of income would cause significant financial distress.21
If the most recent COVID-19 pandemic has taught us nothing else, it at least taught us all that having enough wealth to subsist in the event in the event of an incredibly unexpected economic, social, and political event is essential for survival. A recent survey of residents in the Metro Atlanta region found that in a $400 emergency, Black households (36.4 percent) are twice as likely to have to borrow money, sell something, or not pay compared to white households (17.5 percent).22 An examination of asset poverty and net worth is only the beginning. Black households are less likely to hold longer-term assets that they can tap into in order to borrow from themselves in the event of an emergency. For instance, Atlanta’s Black homeownership rate at the end of 2019 stood at 33.3 percent, 12 percentage points below the overall city’s homeownership rate.23
Addressing the fact that so many Black families are in no position to weather a financial crisis, much less accrue wealth and pass it on to future generations, is essential to the financial wellness of Atlanta’s Black households. Understanding the general wealth picture of Black Atlanta – the racial wealth divide and net worth holdings – establishes a baseline to begin understanding disparities that appear in other domains of the structural determinants of Black wealth. The following sections will examine Black wealth outcomes through the various determinants identified in the structural determinants of Black wealth framework and highlight data that can be used to measure progress toward building Black wealth.