Racial inequality has been brought into the spotlight in recent years, as protests against police brutality and racism have taken place across the U.S. in response to numerous high-profile cases such as the death of George Floyd. However, it’s not just in policing where discrimination rears its head. A recent study found that only 3.2% of executive or senior-level positions belong to black Americans, even though that demographic makes up 13% of the U.S. population. The overall black unemployment rate is consistently higher than the white unemployment rate, too.
What’s even more striking than the inequality in employment is the disparity in wealth between white and black Americans. The average white family has a net worth of $171,000, compared to just $17,150 for the average black family. As racial tensions run high in America, it’s an opportune time to take a look at which states have done the most to promote financial equality.
In order to determine which states have the most racial equality in terms of employment and wealth, WalletHub compared the 50 states and the District of Columbia across eight key metrics. Our data compares the difference between white and black Americans in areas such as annual income, unemployment rate and homeownership rate.
Main Findings
State Economies with the Most Racial Equality
| Overall Rank* | State | Total Score |
|---|---|---|
| 1 | Alaska | 85.36 |
| 2 | New Mexico | 81.29 |
| 3 | Arizona | 78.55 |
| 4 | Hawaii | 78.38 |
| 5 | Texas | 76.30 |
| 6 | Washington | 76.17 |
| 7 | Florida | 75.06 |
| 8 | South Dakota | 74.33 |
| 9 | Kentucky | 74.32 |
| 10 | Colorado | 74.21 |
| 11 | Maryland | 72.64 |
| 12 | Montana | 72.52 |
| 13 | Delaware | 72.21 |
| 14 | Idaho | 72.16 |
| 15 | Virginia | 72.09 |
| 16 | Tennessee | 71.87 |
| 17 | Rhode Island | 71.40 |
| 18 | Oregon | 71.25 |
| 19 | North Carolina | 70.63 |
| 20 | Massachusetts | 69.62 |
| 21 | California | 69.48 |
| 22 | Maine | 69.41 |
| 23 | Missouri | 68.80 |
| 24 | West Virginia | 68.79 |
| 25 | New Hampshire | 68.43 |
| 26 | South Carolina | 68.18 |
| 27 | Georgia | 67.85 |
| 28 | Oklahoma | 67.28 |
| 29 | Nevada | 67.05 |
| 30 | Connecticut | 66.85 |
| 31 | Arkansas | 65.75 |
| 32 | Vermont | 65.69 |
| 33 | Kansas | 65.36 |
| 34 | Alabama | 65.33 |
| 35 | New Jersey | 65.21 |
| 36 | Utah | 65.01 |
| 37 | Wyoming | 63.32 |
| 38 | Indiana | 61.36 |
| 39 | Nebraska | 60.87 |
| 40 | Mississippi | 59.95 |
| 41 | New York | 59.71 |
| 42 | Pennsylvania | 59.02 |
| 43 | Ohio | 58.52 |
| 44 | North Dakota | 56.85 |
| 45 | Louisiana | 56.33 |
| 46 | Michigan | 55.68 |
| 47 | Minnesota | 53.87 |
| 48 | Iowa | 51.44 |
| 49 | Wisconsin | 47.46 |
| 50 | Illinois | 46.15 |
| 51 | District of Columbia | 15.25 |
*No. 1 = Most Equality
- Lowest Gap
- 1. Hawaii
- 2. Montana
- 3. Wyoming
- 4. New Mexico
- 5. Arizona
- Highest Gap
- 47. Minnesota
- 48. Iowa
- 49. Louisiana
- 50. Wisconsin
- 51. District of Columbia
- Lowest Gap
- T-1. Alaska
- T-1. Kentucky
- T-1. Hawaii
- 4. Arizona
- 5. Vermont
- Highest Gap
- 47. Iowa
- 48. Illinois
- 49. Pennsylvania
- 50. Wisconsin
- 51. District of Columbia
- Lowest Gap
- 1. South Dakota
- 2. Alaska
- 3. Maine
- 4. Vermont
- 5. New Mexico
- Highest Gap
- 47. Iowa
- 48. Montana
- 49. Michigan
- 50. Illinois
- 51. District of Columbia
- Lowest Gap
- 1. District of Columbia
- 2. South Carolina
- 3. California
- 4. Virginia
- 5. Mississippi
- Highest Gap
- 47. Iowa
- 48. Minnesota
- 49. Vermont
- 50. South Dakota
- 51. North Dakota
- Lowest Gap
- 1. Hawaii
- 2. Montana
- 3. Alaska
- 4. New Mexico
- 5. Texas
- Highest Gap
- 47. North Dakota
- 48. Minnesota
- 49. Maine
- 50. Iowa
- 51. Wisconsin
- Lowest Gap
- T-1. Vermont
- T-1. New Hampshire
- T-1. Idaho
- T-1. Wyoming
- T-1. Oregon
- Highest Gap
- 47. Maryland
- 48. Illinois
- 49. Georgia
- 50. New York
- 51. District of Columbia
Note: All of the above comparisons refer to the gaps between white people and black people, according to the most recent available data.
Ask the Experts
In order to provide further insight on how to promote equality in employment and wealth, WalletHub turned to a panel of experts. Click on the pictures of the experts below to read their bios and see their responses to the following key questions:
- What are the major causes of the racial wealth gaps in US states?
- In your opinion, have we made any progress in closing the racial gap in the economy?
- What policies and programs should policymakers implement to reduce economic disparities by race?
- In evaluating the states' economies with the most racial equality, what are the top five indicators one should focus on?
Ask the Experts
Class of 1925 Professor Emeritus, Department of Sociology – Dartmouth College
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Associate Professor, Political Science – Boston University
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Professor of Political Science – Drake University
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Professor of Economics – Babson College
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Professor of Politics – University of Virginia
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Ph.D. – Associate Professor of Economics; Director Center for the Study of Economics and Liberty, Stetson-Hatcher School of Business – Mercer University
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Methodology
In order to determine the states with the most racial equality in terms of employment and wealth, WalletHub compared the 50 states and the District of Columbia across eight relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most equality. We determined the level of equality by subtracting the values attributed to whites and blacks for a given metric, using only the most recent available data.
If in some states black people scored as high as or better than white people on a given metric, all such states were awarded the maximum number of points.
Finally, we determined each state and the District’s weighted average across all metrics to calculate its total score and used the resulting scores to rank-order the states.
- Median Annual Household Income: Double Weight (~21.05 Points)
- Labor-Force Participation Rate: Full Weight (~10.53 Points)
- Unemployment Rate: Double Weight (~21.05 Points)
- Homeownership Rate: Full Weight (~10.53 Points)
Note: We are using homeownership as a proxy for wealth. - Poverty Rate: Full Weight (~10.53 Points)
- Homeless Rate: Full Weight (~10.53 Points)
- Share of Unsheltered Homeless: Half Weight (~5.26 Points)
- Share of Executives: Full Weight (~10.53 Points)
Sources: Data used to create this ranking were collected from the U.S. Census Bureau, U.S. Equal Employment Opportunity Commission and U.S. Department of Housing and Urban Development.