Dr. King and Wealth Inequality

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What's Happening Today

"As long as there is extreme poverty in this world, no one can be totally rich even if he has a billion dollars." — Reverend Dr. Martin Luther King, "The American Dream" speech

Today at The Balance, we join the rest of the world in commemorating the life and legacy of Rev. Dr. Martin Luther King Jr.

Dr. King was extremely concerned with economic inequality and justice for all, and as we enter the third year of a pandemic that has taken lives and been financially devastating to millions, we want to honor his commitment to fighting wealth gaps.

In the K-shaped economic recovery from the pandemic, many wealthy Americans got richer, while households that were struggling faced more emergencies with fewer resources. A 2021 study from the Center for American Progress (CAP) found that the wealth gap between Black and White households has only grown wider during the pandemic. According to the study, Black households had fewer savings on average to cope with medical and financial emergencies, and had to turn to borrowing more to make up financial gaps.

And while Black and Latinx people have largely struggled more than White people during the pandemic, it has been an economic struggle for many: A new survey has found that fewer people feel financially "healthy" by the end of 2021 than they did at the start of the year.

But I do believe there are still signs of a hopeful future: After so many companies shuttered their doors and laid off or furloughed their workers, business and economic activity has restarted in earnest, and the unemployment rate fell to 3.9% in December. By comparison, the pre-pandemic unemployment rate in Feb. 2020 was 3.5%. For those of you seeking work, not only are there near-record job openings available, but the labor market has shifted power into your hands (so now is the time to negotiate a pay raise). More people have poured into the stock market—and the market has rewarded them with gains: in 2021, the S&P 500 rose 26.9% while the Dow was 18.7% higher.

At The Balance, we remain as committed as ever to being your partner on your financial journey, no matter who you are or where you are in your life.

- Kristin

Editors' Picks

Wealth Matters: The Black-White Wealth Gap Before and During the Pandemic (Center for American Progress)

Home Equity and the Racial Wealth Gap (The Balance)

What Is Economic Mobility? (The Balance)

The Economic Message Behind Martin Luther King Jr.'s 'Dream' Speech (Investopedia)

Home Appraisers Shown Using Race in Valuations (The Balance)

Off the Charts

What for White workers was a once-in-a-lifetime unemployment crisis brought on by the pandemic has often been the norm for Black or African American workers over the last 35 years.

Since August 1986, White people only experienced an unemployment rate of at least 10% during the first three months of the pandemic, a chart of unemployment rates by race shows. But the Black and African American unemployment rate has been double digits for a combined total of more than 21 years.

Number of the Day

7.2% - That's the effective inflation rate for the U.S. households with the lowest income, noticeably higher than the 6.6% rate felt by those with the highest incomes, a new analysis shows.

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