All women face challenges in achieving pay equity, but Black women experience a steeper climb compared to their white counterparts.

Equal Pay Day signifies how long into the year a woman must work to match what a man earned the year prior. In 2020, this date was marked on Tuesday, March 31. However, Black women face a longer wait.

For them, Equal Pay Day was on August 13, 2020. This delay stems from earning only 61 cents for every dollar a man makes, in contrast to the 82 cents earned by women of all races combined.

This 21-cent disparity, coupled with other systemic challenges, hinders Black women's financial stability, preventing them from achieving the same security as the average white woman. Let's explore the obstacles they confront.

Projected Pay Equity for Black Women Isn't Until 2119

Over the last 50 years, the pay gap has narrowed slowly, but progress for Black women remains painfully slow.

Data from the U.S. Census Bureau highlights that from 1967 to 2017, the wage gap for Black women compared to white men shrank by only 18 cents, resulting in 61 cents for every dollar earned by a man today, up from 43 cents in the 1960s. In contrast, the overall wage gap for women decreased by 23 cents from 57 cents to 82 cents per dollar.

Time exacerbates this wage gap. The cumulative loss due to gender pay disparity for a white woman amounts to $530,000 over a 40-year career, according to American Association of University Women data. For Black women, this figure is a staggering $950,000.

Approximately 27% of Black women work in service jobs, compared to 19% of white women.

This translates to a Black woman needing to work until age 86 to match what a man earns by age 60.

For foreign-born Black women, the situation is even graver, as they earn just 50 cents for each dollar a white non-Hispanic foreign-born man receives, with a median annual income of $35,000 compared to $70,000.

Four Million Families Rely on Black Women's Earnings

A Black woman's income is crucial for her family. They are over twice as likely as white women to be their family's main breadwinner, according to the Center for American Progress. Nearly four million family households in the U.S. are headed by Black women, with around one in four of those families living below the poverty line.

If the pay gap were eliminated—if a Black woman earned the same median annual wage as a white non-Hispanic man ($61,576 versus the current $38,036)—she could afford:

  • 2 ½ years of childcare
  • More than 2 ½ extra years of tuition and fees for a public university
  • 16 additional months of employer-based health insurance premiums
  • 15 additional months of mortgage or utility payments, or 22 extra months of rent
  • Enough to clear student loan debt in just over a year

Occupational Segregation Puts Black Women in Vulnerable Positions

The pandemic highlighted how minority women shoulder a significant burden due to their job roles. They have also faced higher job losses than the general workforce. Approximately 27% of Black women are employed in service jobs, compared to 19% of white women. The percentage of Black women in full-time minimum wage roles is higher than that of any other racial group.

When frontline workers risk their health during the pandemic, it often involves minority individuals: over 41% of frontline workers are non-white, according to demographic data from the Center for Economic and Policy Research.

A Black woman only earns more than the average white male if she holds a Master's degree while he has an associate's degree.

Mass layoffs have brought attention to the precariousness of employment for people of color. Women have been losing jobs at a higher rate than men across the hardest-hit industries like retail and hospitality. In April, the unemployment rate for all women was 2% higher than that of men.

Women of color faced even harsher realities, with the unemployment rate for Black women hitting 16.4% in April, compared to 15.5% for white women and 12.4% for white men.

Black Women Carry a Heavier Student Loan Burden

With $1.5 trillion in student loan debt in the U.S., women hold two-thirds of that total—approximately $930 billion. A 2016 Department of Education study found that over 70% of Black students go into debt for higher education, compared to 56% of white students.

While women generally carry more student loan debt than men, Black women are disproportionately affected. On average, Black women borrow $37,558 for their education, as per AAUW's 2020 analysis, compared to $31,346 for white women.

Twelve years after starting college, a typical white female borrower has paid off 72% of her loan balance, while the average Black female borrower's balance has increased by 13%, according to a Demos study.

Given this, it's no surprise that 57% of Black female college graduates report facing financial struggles while repaying their student loans.

Advanced Degrees Don't Guarantee Higher Pay for Black Women

Many assume that higher education leads to better earnings for Black women, but that's not the case.

A report from the National Women's Law Center indicates that a Black woman with a bachelor's degree earns roughly the same as a white non-Hispanic man with just some college experience. The wage gap persists in high-paying professions requiring advanced degrees, like law and medicine. A Black woman with a doctorate earns only 60% of what her white counterpart does.

The only situation where a Black woman earns more than an average white male is if she has a Master's degree and he has an associate's degree, and even then, the difference is marginal.

Black Women Face a Lower Glass Ceiling

Many of us have felt the impact of the glass ceiling. For Black women aiming for corporate advancement, the ladder is shorter.

A recent study by PayScale found that while career advancement is relatively equal for Black and white women up to certain levels—24% of both groups with bachelor's degrees reach manager/supervisor roles—only 10% of Black women attain director or executive positions, compared to 13% of white women.

Bias also plays a role in salary negotiations. While all employees are likely to ask for raises, PayScale's Raise Anatomy report shows that people of color are less likely to receive them. Black women are 19% less likely than white men to get a pay increase, and men of color fare even worse at 25% less likely.

Companies should note that 52% of Black women are considering leaving their jobs within the next two years, based on a report from the Working Mother Research Institute.

Funding for Black Female Entrepreneurs Is Severely Lacking

The drive to start businesses among minority women is strong, but financial backing is scarce. According to an American Express State of Women-Owned Businesses Report, Black women-owned businesses represented 21% of all female-owned businesses as of 2019. However, the average revenue for these firms was only $24,000, compared to $142,900 for all women-owned businesses.

This lower revenue can be attributed to a surge in new businesses started by women of color between 2018 and 2019 (10% growth compared to 5% for all women-owned businesses).

Moreover, mainstream financial support for these entrepreneurs is lagging. Since 2009, Black women-led startups have received a mere 0.06% of venture or angel funding, as shown in the ProjectDiane2018 study examining Black women founders. While more Black women-led startups are securing over $1 million in funding, those receiving less than that average only $42,000, compared to $1.14 million for all startups.

If Black women-led businesses were given the necessary support to thrive, aligning their average revenue with that of white women-owned firms could yield four million new jobs and generate $981 billion in revenue.