Posted on July 21, 2020

Racial Differences in Atlanta’s Median Household Income Widespread, Deeply Rooted

David Sjoquist, Saporta Report, July 19, 2020

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{snip} The racial difference in income in the City of Atlanta is stark and depressing. According to the latest American Community Survey, released by the Census, median annual household income for Black households in the city of Atlanta is $35,048, while it is 2.93 times larger, or $102,693, for white households. These numbers explain why the poverty rate for Blacks in the city of Atlanta is 30.2 percent, while it is 8.1 percent for whites.

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Not all Blacks living in the city are poor and not all whites are rich; 40 percent of Black households have incomes in excess of $50,000, while 20 percent of white households have incomes of less than $50,000. The racial difference in median household income is not as large for the Atlanta metropolitan statistical area; $54,456 for Blacks and $80,470 for whites.

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Education is a very significant factor in explaining differences in income. In the City of Atlanta, there is a substantial racial difference in the education level. Only about 2 percent of white adults living in the City of Atlanta have less than a high school education, compared to 14 percent for adult Blacks. On the other hand, 80 percent of whites have a college degree or more, while just 27 percent of Blacks do. {snip}

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The number of individuals of working age is another factor determining income. The larger the share of kids and seniors, the smaller the share of individuals who are likely to be employed. The percentage of Blacks who are under 18 years of age or over 64 years of age is 36 percent, but only 24 percent for whites.

Household income is the sum of the income of all members of the household. Thus, it is expected that households comprised of a married couple will, on average, have higher income than households comprised of just one adult. In Atlanta, 52 percent of white households are married couples, while it only 21 percent of Black households. Since, on average, females earn less than males, families with no male present will in general have lower incomes. In the City of Atlanta, 38 percent of Black household are female headed, while it is only 6 percent of white households.

A large part of household income is earnings, but income from financial assets, i.e., wealth, is an important source of income for many households. However, Black households have much smaller portfolios of financial assets, even for households with the same income. We do not have data on wealth holding for the City of Atlanta, but nationally it has been found that wealth of Black households is about 56 percent of that of white households, after controlling for income and other factors. And, of course, less wealth means less income.

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