Racial equity in income: Eliminating racial inequities in income would strengthen families, communities, and local economies.
Insights & Analyses
- The average annual income for all people of color would increase by $17,690 or 44 percent with racial equity in income. The average annual income for Native American workers would increase by $24,980 or 80 percent, the highest across all racial/ethnic groups.
- The majority of income gains created by eliminating racial gaps in income for all people of color would come from growth in wages but for multiracial workers, the majority of income gains would come from growth in employment.
- The United States’s GDP in 2022 would have increased by $3.5 trillion if we eliminated racial gaps in income.
- The percent gain in GDP with racial equity in income is highest in the District of Columbia at 49 percent; the next highest state-level gain is in California at 33 percent.
Drivers of Inequity
Historically, people of color were barred from educational opportunities that would allow them to obtain higher-paid employment, while occupations dominated by people of color (e.g., domestic and agricultural work), were excluded from minimum wage and overtime protections. Deindustrialization and cuts to the public sector in the late 20th century decimated unions and disproportionately hurt people of color who were first to be laid-off and pushed into a growing service sector. Today, hiring and pay discrimination against people of color is widespread even among candidates with equal education and the loss of worker protections has created wealth for top earners as wages have declined for the bottom half. Opportunities for racial inclusion exist in industries driving economic growth (e.g., tech), but to date, these industries have lacked the racial diversity reflective of the nation’s population.
Strategies
Grow an equitable economy: Policies to invest in people and strengthen the economy
- Raise the floor on low-wage work by increasing the federal minimum wage or enacting living-wage laws, requiring paid sick days, ending wage theft, strengthening workers' rights to organize, and ensuring fair scheduling.
- Reduce employment barriers for people with records by "banning the box" — eliminating questions about conviction history on job applications (for private as well as public employers).
- Target economic development and workforce efforts to grow high-opportunity sectors that provide pathways for people without four-year degrees or facing other barriers to employment.
- Increase transportation access to help jobseekers and low-wage workers connect to good jobs.
- Invest in education and workforce training pathways to help lower-wage workers connect to good jobs.
- Expand access to high-quality public education, create cradle-to-career pipelines for vulnerable youth, increase access to affordable childcare, and invest in universal pre-K.
- Ensure entrepreneurs of color can access the capital and know-how to launch and expand their businesses.
- At the federal level, lower and/or eliminate tuition and for all higher education, set aside a share of public contracts for businesses owned by people of color to mirror area demographics, and invest in infrastructure projects that meet resident needs in historically disinvested neighborhoods.
Strategy in Action
Tulsa proves universal pre-K brings major economic and social returns. Investments in early childhood education have strong, proven economic and social benefits. In 1998, Oklahoma passed legislation offering free high-quality pre-K to every four-year-old in the state. Its enrollment rate is 74 percent, while only 33 percent of all four-year-olds nationally are enrolled in a state-funded pre-K program. A 2023 in-depth study of Tulsa’s program found that children who enrolled in pre-K would increase their future earnings by tens of thousands of dollars compared to children who did not. Low-income students, in particular, would see an earnings increase. For students of all income levels, the benefits of pre-K far outweigh the state’s investment. Learn more.
Photo: Woodleywonderworks on Flickr

Resources
- Reports: Inclusive Economic Development: Good for Growth and Good for Communities; Early Learning in the United States: 2021; Racial representation in professional occupations; Raising the Minimum Wage Would Boost an Economic Recovery; Race and the Work of the Future: Advancing Workforce Equity in the United States; Raising the Federal Minimum Wage; The Long History of Discrimination in Job Hiring Assessments
- Data: Living Wage Calculator; Metro Monitor 2025; State of Working America; Opportunity Insights Economic Tracker