What President Joe Biden got right, and what he missed, about the racial wealth gap

Ahead of South Carolina’s February primary, President Joe Biden appealed to the state’s Black voters by touting his administration’s efforts to bolster racial equity in the economy.

"We’re growing back Black wealth, but we have a lot more to do," he said Jan. 8 in Charleston at Mother Emanuel AME Church, the South’s oldest Black church. "The racial wealth gap is the smallest it’s been in 20 years, under my watch. More Black small businesses are starting up than in decades. Opening a new business (is) the ultimate act of hope."

When we asked the White House for evidence, a spokesperson pointed us to a chart from the Federal Reserve, the U.S. central bank, that shows the ratio of wealth between white and nonwhite families. By this single measure, Biden is accurate: The wealth ratio between white and Black families narrowed slightly in 2022 and is the smallest it’s been since 2001.

However, this is not the only way to measure the racial wealth gap. The same Federal Reserve report that Biden referred to said racial wealth gaps "persisted and widened" in 2022 based on the dollar amount differences in median wealth between white and nonwhite families.

Economists use both measures to assess the racial wealth gap, so Biden’s statement covered only half of the picture — and it was the more favorable half. All of the wealth measures calculate assets minus liabilities.

Since Biden made the statement in the context of Black wealth and when speaking to a Black audience, we focused this fact-check on economic disparities between white and Black families. The Federal Reserve also reports wealth data for Hispanic, Asian and other nonwhite communities.

Although average American families’ incomes grew during the COVID-19 pandemic, significant economic disparities between white and nonwhite families persisted. In 2022, the median wealth for white families was more than six times larger than that of Black families.

One way to determine the racial wealth gap is to measure Black families’ wealth in comparison with white families. This is calculated by dividing the median total wealth for Black families by the median total wealth for white families.

The white-Black wealth ratio narrowed modestly in 2022, as the Federal Reserve reported. Still, white families had vastly more wealth than Black families. In 2022, for every $100 the average white family held, the average Black family had $15.75. That’s the most since 2001, when Black families had $15.79, but it still accounts for only about one-sixth of the white level.

Another way the Federal Reserve measures the racial wealth gap is the absolute-dollar value difference in wealth between white and nonwhite families. By that measure, the racial wealth gap widened in 2022.

The absolute-dollar 2022 median wealth for white families was $285,000, and just less than $45,000 for Black families, the Federal Reserve reported.

Average wealth increased for families in all racial groups from 2019 to 2022, partly because of pandemic-era government benefits. Black families had the fastest growth in wealth during this period, with a 61% jump. The typical white family’s wealth increased 31%.

However, despite this surge, Black families’ total dollar increase in wealth still trailed far behind that of white families.

From 2019 to 2022, the median wealth for white families increased by almost $67,000. For Black families, median wealth increased about $17,000. Because of the uneven increases, the wealth gap between white and Black families expanded by about $50,000, bringing the total wealth disparity to more than $240,000.

Both ways of measuring the racial wealth gap are accurate, said Jonathan Welburn, a senior researcher specializing in economics at the Rand Corp., a nonpartisan research organization.

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Welburn and other Rand researchers estimated in a May 2023 article that it would take trillions of dollars to eliminate the wealth gap between white and Black Americans.

In South Carolina, Biden took credit for the narrowing racial wealth ratio, saying it happened "under my watch."

The Biden administration has announced efforts to address income inequality for Black Americans, including expanding access to home and business ownership.

The Federal Reserve report said net housing wealth, investment income and businesses or self-employment were the top Black income growth drivers from 2019 to 2022. But other factors helping to reduce the wealth gap predated Biden’s presidency.

The report said during this period, which intersected with the COVID-19 pandemic, incomes for nonwhite families were "propped up" by temporarily expanded government benefits, such as unemployment insurance and food stamps. Stimulus checks were another pandemic-era lifeline for Black Americans. Congress and the Trump administration approved these programs and Biden continued them.

Biden said, "The racial wealth gap is the smallest it’s been in 20 years."

By one measure, the white-Black wealth ratio, that’s true. In 2022, that ratio modestly reduced to the smallest it’s been in 20 years.

By a different measure, the dollar amount difference in wealth, the gap widened between white Americans and Black Americans to more than $240,000. That’s the largest disparity since 1989, the earliest year recorded in the Federal Reserve data.

Biden’s claim is partially accurate, but leaves out additional context about how the Federal Reserve assesses the racial wealth gap in the U.S. We rate this claim Half True.