Black Incomes Outperform National Average in 124 Cities

By Vanessa Williams

Last November, he Metropolitan Policy Program at the Brookings Institution published a study concluding that black incomes outpace the national median in 124 majority-black cities. However, these cities are finding it difficult to attract developers and investors for economic development.

The study collected data from the 2015 American Community Survey that showed there are 124 majority-black cities with median black household income above the national average for all races ($53,889). Andre Perry, a researcher in the Brookings Metro program, used this data to analyze the top 124 majority-black cities. Of those cities, more than half (65 cities) are in various city/suburbs in the state of Maryland. In addition, the study finds that all these cities have populations under 100,000 people.

While this analysis relies on the median income of the cities, there is an understanding that the use of median income to represent financial status is not completely accurate. There are many sampling errors that can occur when applying average household income because it simply measures the middle of an income distribution. Still, the median household income is still widely used and can provide some insight into the economic wealth of these majority-black cities.

Based solely on data and facts, there is no way to determine why majority-black cities are having trouble finding developers and investors. However, Perry suggests that preconceived notions of black communities could be a reason that investors are disregarding these cities. He also asserts that valuable assets in these cities are being overlooked. And, if there were a better understanding of the existing resources, then cities could develop effective strategies to help create more economic development.

Consequently, there is a possible resolution introduced to initiate growth and sustainability in some of the majority-black cities.  In the analysis, a correlation is made between the intersectionality of a historically black college or university (HBCU) and majority-black cities. The study finds about half the nation’s HBCUs are in majority-black cities. Though the presence of an HBCU does not push incomes above the national average in many of those cities.

“HBCUs can be a significant support in a multipronged economic and workforce development strategy for city sustainability and growth,” writes Perry. It is fair to assume that majority-black cities hosting HBCUs would be a good place to start in the endeavor. Yet, this can prove to be difficult as HBCUs often face issues with insufficient funding.  In the same month that the Brookings report was released (November 2017), a federal judge sided with Maryland HBCUs to improve the state’s lack of investment in the institutions.

Perry concludes that “there are current places and institutions, many of which are commonly overlooked, that should be a more integral part of future investment strategies.” This study, and others like it, seeks to effectively distribute information on the economic health of majority-black cities. And, help investors to better understand the opportunities within these communities.

Read more at the Brookings Institution.