Nothing exhibits this more starkly than new statistics about Massachusetts’ racial wealth gap. As the Globe recently reported, the Boston Fed’s latest study found that Black families in Massachusetts have a median net worth of just $7,800. For Latino families, the figure is even worse: $1,200 — compared with nearly $550,000 for white families.
The message is unmistakable: Despite Massachusetts’ extraordinary prosperity, median Black household wealth is barely 1.4 percent of median white household wealth — and for Latino households, it is even less.
Home and business ownership, and the generational wealth they provide, are the only way out. Think about it: When communities invest in one small business, they don’t just invest in a single entrepreneur. That business hires locally, buys locally, and supports a family. It uses other small businesses, creates jobs, mentors the next generation, and contributes to community organizations. And ultimately, those investments can create an asset that is passed from one generation to the next.
But for hundreds of years, Black Americans were excluded from the economic main street, from property ownership, lending, contracting, education, and countless opportunities to build and transfer wealth. You cannot erase centuries of exclusion by simply declaring that everyone is now playing on a level playing field.
Having spent more than three decades as a Black woman entrepreneur in Massachusetts, I know firsthand that while talent is equally distributed, opportunity, access, and capital are not. Massachusetts should treat this study as a clarion call to action — not out of charity or political correctness, but because rectifying a patently unfair disadvantage is essential to building a more economically inclusive state.
First, state and municipal governments should use the enormous power of procurement to create wealth. Massachusetts should establish meaningful, measurable goals for contracting with historically underutilized businesses — and publicly report the results. Taxpayer dollars should help create taxpayers, employers, and wealth-builders in every community.
Second, both the private and public sectors should hold prime vendors, or the vendors that contract directly with corporations or government agencies, accountable. Year after year, the largest contracts go to the same major law and accounting firms, construction companies, technology providers, marketing agencies, and investment managers. In return for that business, institutions should ask those vendors a simple question: “Because of the business you are doing with us, who are you doing business with?” Prime vendors should be required to report how much they subcontract and purchase from historically underutilized businesses — and that performance should help determine who wins the next contract.
Third, Massachusetts banks and financial-services companies must become more deliberate and intentional partners in closing the capital gap. Too many talented entrepreneurs have strong businesses, loyal customers, and boundless ambition, but lack the collateral, generational wealth, and affluent networks that traditionally open doors to capital. Banks should expand cash-flow-based lending, loan guarantees, and other flexible financing so entrepreneurs are judged on the strength of their businesses — not the size of their family balance sheets.
Philanthropy can complement that work with patient capital (the name for long-term investment funding that doesn’t require immediate returns) and support for organizations providing legal assistance, marketing expertise, mentorship, and valuable networks.
I have been around long enough to know that some business leaders believe economic inclusion is a political issue or distraction. I see it differently. If your company has Black and Latino customers, employs Black and Latino people, and profits from diverse communities, why shouldn’t those communities have the opportunity to participate in the economic supply chain?
A decade ago, a landmark Federal Reserve Bank of Boston report found that the average US born Black Bostonian had a median net worth of $8. That finding, which was based on a small sample, shamed our city and spurred some of its leaders to act. But after 10 years of starts and stops, progress and retreat, investment and retrenchment, Black families find themselves staring at another number every bit as stark: 1.4 percent of median white household wealth.
Closing that gap is not about mandating equity. It is about ensuring opportunity so that Black and Latino families do not merely survive at the bottom of the economic ladder, but can own businesses, build assets, and prosper at the top. Ultimately, we cannot close the wealth gap without creating wealth.
