Focusing exclusively on poverty is insufficient for addressing Black wealth outcomes in Atlanta, especially considering the official measure of poverty is actually a measure of income. But while the magnitude of the racial wealth divide is extreme, poverty and income are still essential measures to grasp the complete picture of Black wealth outcomes. While Black Atlantans make up just under half of the city’s overall population, they comprise almost three-quarters of the city’s population living below the federal poverty line (72.8 percent).24
The City of Atlanta’s long-term position as the number one city for income inequality also requires an examination of the relationship between income, poverty, and wealth. Black households earn considerably less income than white households, limiting their ability to save and build wealth.25 Income differences do explain a part of the racial wealth divide, though a significant divide exists even after accounting for income.26 The income divide is still a driver of the racial wealth divide. Moreover, income remains a primary source of money for most Black people, given the structural barriers that prevent access to other assets. Consider that for the more than one-third of Black Atlanta households with zero or negative net worth, income is an important entry point to building Black wealth.
In Atlanta, children born to families in the bottom fifth of the income ladder have just a four percent chance of moving into the high income category.27 According to the latest estimates, 28 percent of Black Atlantans – over 60,000 people –live below the federal poverty line.28
There are many mechanisms that contribute to higher rates of poverty in Atlanta’s Black neighborhoods, most of which stem from a long history of explicitly discriminatory policies and extractive economic development practices in the city. Just as the cumulative effects of wealth accumulation can span generations, so can multi-generational poverty. One in five Black people are experiencing poverty for the third generation in a row, compared to just one in a hundred white Americans.29
Black households see less of a return than white households on the income they earn. Research shows that for every $1 in wealth that accrues to median Black households associated with a higher income, median white households accrue $4.06.30 Studies also show that wealth differentials hold across income groups. For instance, Black households in the bottom 20 percent of the income quintile hold just $1,900 compared to white households in the same income group, who hold $29,800 in wealth. The typical Black household in the highest income group has similar wealth holdings as a typical white household in the middle-income group.31
An ongoing limitation of publicly available data is the lack of granularity necessary to observe city or neighborhood-level estimates of wealth and income inequality in a similar way that is presented above. However, we proceed with providing a snapshot of income disparities in Atlanta. Black Atlantans have the lowest median income – $38,854 –compared to all other groups.32
A snapshot of income disparities does not capture the troubling trend we observe in the data over time. The median income for Black Atlantans has grown slightly over the years. However the difference in median income between white and Black households has grown from $56,291 to $73,563 over the past decade, indicating a widening gulf in economic opportunity that reinforces the City of Atlanta’s status as the number one place for income inequality.33
While income is not the primary driver of wealth for white wealth households, it is for Black households.34 In fact, research shows that eliminating disparities in income would reduce the racial wealth divide.35
Racialized personal responsibility narratives form dominant views on education and training and their role in addressing the wealth divide. The notion that people can build wealth by taking the personal responsibility to improve their educational outcomes is overstated. Moreover, the personal responsibility narrative dismisses the role of structural forces that limit the potential of high educational attainment to narrow the racial wealth divide.
Research shows that higher education does not yield the same advantages for Black people as it does for white people, nor does it address the racial wealth divide in any substantial way.36 Although educational attainment is associated with higher levels of wealth, the relationship between degree status and median wealth varies sharply between Black and white adults.37
Figure 1 shows that Black wealth is only a fraction of white wealth regardless of educational attainment. Households headed by a college-educated Black person hold $22,000 less wealth than white households, even without a high school diploma. These disparities signal diminishing returns on the investment that Black families make in higher education – an investment that routinely results in deeper debt and worsening wealth disparities.
While the systemic data issues limit our ability to present these wealth and educational attainment figures at the local level, it is worth examining the relationship between income and educational attainment in Atlanta. Atlanta is attracting a more educated population to the city and the region, which brings higher incomes to the city.38 However the prosperity generated from the combination of higher incomes and higher education is not distributed evenly. Similar to the wealth picture, income disparities persist across education levels in Atlanta.
Atlanta’s white households headed by someone with only a high school diploma make almost as much as Black households headed by someone with a college degree. Moreover, the typical white household starts breaking into the six-figure income range with just a bachelor’s degree, an income level that Atlanta’s Black households don’t see unless someone with a doctoral degree heads them.39 The income divide between Black and white households in Atlanta widens at higher levels of degree attainment.
If the income of Black Atlantans equaled that of white Atlantans, the total earnings for everyone could improve, and the whole economy would experience growth through greater purchasing power. Moreover, wealth for Black families would begin to grow with increased savings for emergencies, more cash on hand to buy homes and vehicles, and more money to put aside and invest in other assets.