THE PATH to financial stability in America is treacherous for Black and Latina women. Systemic discrimination purposefully creates a cycle of economic disadvantage, throwing up barriers for families led by Black and Latina women to save, attain assets, and build generational wealth, like White families have for centuries.
From gender and racial pay gaps to a lack of assets, Black and Latina women often start at a financial disadvantage, lacking the generational wealth which often provides a safety net for their White counterparts.
And even in the pursuit of the American Dream, Black and Latina women continue to encounter systemic hurdles that impede their path to achieving financial stability, let alone prosperity.
Women in the United States earn less over their lifetimes than men, are limited in their ability to afford essential needs such as food, childcare, and health care, and can’t save as much as a result.
In fact, White women earn just 84 cents for every dollar paid to men for full-time work, losing over $330,000 over the course of a 40-year career in earnings. That disparity widens significantly for women of color — Black women lose out on $884,800 over the course of their career, while Latina women lose out on $1.2 million.
The racial and gender wealth gap is even larger than the racial and gender wage gap – meaning women have fewer assets than men across racial lines. Families led by Black and Latina women own just pennies on the dollar compared to their White male counterparts – just 5 and 10 cents, respectively, for every dollar of median wealth held by families led by White men.
Boston garnered national attention nearly a decade ago when the Federal Reserve found that US-born Black households in Greater Boston averaged a mere $8 in net worth compared to the $247,000 average net worth for White Bostonians.
Bridging this gap requires intentional efforts to address the root causes and create opportunities to build savings to mitigate systemic challenges that work against women, especially women of color, in this country.
There are opportunities to help narrow the racial and gender wealth gaps by unlocking the full potential of programs like the US Department of Housing and Urban Development’s Family Self-Sufficiency Program, which can serve as a powerful engine for economic prosperity for Black and Latina women and their families. The Family Self-Sufficiency Program is the nation’s largest asset-building program for families with low incomes.
That is why the work we’re doing at Compass Working Capital to administer the program in partnership with Boston-area housing partners is so important. And it is for these very reasons that Compass focuses on Black and Latina women-led families—in fact, 90 percent of our clientele are women, 55 percent are Black, and 25 percent are Latina.
The federal program supports families living in HUD-assisted housing to build savings by leveraging the automatic rent increase that takes place as their income increases into an escrow account. Compass’s financial coaches provide guidance and support on the financial steps families need to take to reach the goals that matter most to them.
With these resources and support, our clients can navigate the complexities of personal finance and build a solid foundation for future prosperity. They can use their savings to achieve a wide variety of goals, including home ownership, education, a vehicle to expand their access to opportunity, and even starting a business.
Compass-run Family Self-Sufficiency programs significantly outperform other similar programs nationally by graduating three times the participants on average than other programs. Compass graduates of the program accrue on average $9,000 n their program escrow accounts. Seventy-five percent of graduates also have $400 or more in additional personal savings – last year, only 63 percent of all US households could say the same. Since 2010, Compass has supported over 5,000 families to build more than $19 million in savings.
The journey to generational wealth for Black and Latina women is ladened with obstacles, but programs like Family Self-Sufficiency can provide a roadmap for overcoming these challenges, one family at a time. By addressing systemic disparities and leveraging economic resources to help families increase their earning potential and build savings, we can break down those barriers for women to secure a brighter future for themselves and their families.
Markita Morris-Louis is the CEO of Compass Working Capital, a national nonprofit working to end asset poverty for families with low incomes and narrow the racial and gender wealth gap.
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