The 10 Best State Economies for Racial Equality — and the 5 Worst

Recent events have reminded us that America is a place where racial equality remains elusive.

While improvement is needed everywhere, some states are doing better than others.

WalletHub recently used eight key metrics to compare the 50 states and the District of Columbia and determine which economies have the most — and least — racial equality. The financial data site explains:

“We determined the level of equality by subtracting the values attributed to whites and blacks for a given metric, using only the most recent available data.”

The eight metrics are:

• Median annual household income
• Labor-force participation rate
• Unemployment rate
• Homeownership rate
• Poverty rate
• Homeless rate
• Share of unsheltered homeless
• Share of executive positions

Some factors — such as household income and unemployment rate — were weighted more heavily than others.

WalletHub also gave each state a total score that reflects all of the metrics. The 10 states with the most racial equality are:

1. New Mexico: total score of 79.92 out of 100
2. Alaska: 77.67
3. Arizona: 77.30
4. Hawaii: 77.19
5. Texas: 76.60
6. Colorado: 74.69
7. Montana: 74.40
8. Vermont: 74.11
9. Delaware: 74.00
10. Washington: 73.74

Meanwhile, other states are not doing as well at creating equal economic opportunities. The places at the bottom of the rankings are:

• District of Columbia: total score of 16.00 out of 100
• Wisconsin: 44.30
• Illinois: 45.18
• Minnesota: 48.74
• Iowa: 50.61

WalletHub notes that unemployment rates are consistently higher among Black Americans than white Americans. Black households also have substantially lower net worths, on average.

Inequality is especially bad in the District of Columbia. The nation’s capital ranked at the bottom for several metrics. In other words, it has a higher gap between white people and Black people than in any of the 50 states when it comes to:

• Medium annual income
• Labor-force participation rate
• Unemployment rate
• Share of homeless rate

While life can be especially tough on people of color in the District of Columbia, things can be challenging for anyone trying to live there. The median cost of a starter home in D.C. was higher than that of any state in the nation — $335,700 as of 2019 — as we detail in “How Much Is a Starter Home in Your State These Days?”