Economic mobility is the ability of someone to change their income or wealth, but for Black communities, a lack of resources is a huge barrier in closing the wealth gap. Typical Black households earn a fraction of white households — just 59 cents for every dollar. And over time, the gap has grown, building on itself. According to 2016 data from the Federal Reserve, a typical Black family has 1/10th of the wealth of a typical white family — and a September 2020 update from the Fed shows that the gap has only slightly improved since then.
Of course, to many people, this is not new information. The wealth gap has been growing for generations. So, what’s different now that’s raising more heads?
In an interview with Katie Couric, Ally Invest President Lule Demmissie offers some insight while discussing how racial economic disparities are exacerbated by a “lack of access” to education and other resources. She says, “There’s a mental shift happening in most Americans’ minds. Ultimately, [this disparity] is not because people of color are undeserving or not trying. There’s something broken about this system, and we, as human beings, can do something to leave it better than we found it.”
It’s easy to feel powerless when confronted with the staggering statistics around the wealth gap, but Lule encourages people to use those moments as motivators to act. “As an individual, I can choose to do micro-acts in my life. That can make a big difference, if everybody else did the same thing.” If everyone used those eye-opening moments as fuel to continue working toward closing the wealth gap, all of those “micro-acts” (like volunteering, donating, having conversations, or participating in community events) can add up to bigger change.
Lule also reflects on how empathy has helped her get far in her own career, emphasizing that “people are willing to connect and be open when they feel seen, no matter who they are.” And she offers advice on how individuals and businesses can work toward closing the racial wealth gap.
Change Starts Internally
At Ally, we’re committed to hiring people of diverse backgrounds and building a business that’s inclusive and welcoming to all. Our employees are encouraged to join any of our Employee Resource Groups, which host guest speakers, educational sessions, and even celebrations to create what Lule calls “a culture of acceptance” within Ally. This culture of acceptance spills over into our view of the community, too, and our responsibility to support the people around us. We’re committed to doing our part to help open doors and break down barriers to wealth creation, especially for communities that have historically been held back.
For instance, with our Moguls in the Making program, we work with the Thurgood Marshall College Fund, the Sean Anderson Foundation, and historically Black colleges and universities to seek out the best and brightest entrepreneurial minds to give them the opportunity to develop and pitch their ideas to a panel of entrepreneurs and business leaders, as well as to expose them to professional opportunities, such as internships and employment.
“This inward and outward model, I think, would be revolutionary if every company did it,” says Lule. She remains optimistic that change is possible — and that people are entirely capable of leaving the current system “better than we found it.”