State Economies with the Most Racial Equality

Racial inequality has been brought into the spotlight once more in recent weeks, as protests against police brutality and racism have erupted across the U.S. in response to 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 percent of executive or senior-level positions belong to black Americans, even though that demographic makes up 13 percent 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. Read on for the results and a full description of our methodology.

Main Findings

State Economies with the Most Racial Equality

*No. 1 = Most Equality

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.

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