Black woman hugging a piggy bank

The McKinsey Institute for Black Economic Mobility

2 min read • Feb 11, 2021 • Terri Williams

McKinsey is known for global analyses and insights in business, government, and everything in-between. With more than 130 offices in more than 65 countries, the management consultancy is in a unique position to create reports and stories on topics ranging from strategy to sustainability to digital trends.

And now, McKinsey has added another vertical: The McKinsey Institute for Black Economic Mobility (MIBEM). 

In a video message on the MIBEM website explaining why the Institute for Black Economic Mobility was created, Shelley Stewart, a partner in the Private Equity & Principal investors Practice, says, “The median Black family today has about 1/10 the wealth of the median white family. Over the next decade, we expect this dampening effect could start to cost the US economy $1.5 trillion a year in lost economic value.” 

According to research by McKinsey, the effects of the widening racial wealth gap are cyclical. By contributing to intergenerational economic precariousness, it is estimated that 70% of Black children considered middle class will lose their middle-class status as adults.

JP Julien, an associate partner in the Public & Social Sector Practice, says on the video, “As we all know, there are things about the ways in which Black communities and individuals are impacted by exclusionary policies or exclusionary practices that we want to be able to call and say by name.” 

McKinsey research reveals that over the course of a lifetime, Black Americans typically earn up to $1 million less than white Americans. Earning potential can be increased by education. However, McKinsey notes that 45% of Black children attend high-poverty schools (75% of students in these schools qualify for reduced-price or free lunch), which is 6 times the rate of white students. And students who attend high-poverty schools are less likely to graduate from high school and attend college.

In the workforce, McKinsey reports that Black workers are more likely to experience higher levels of churn and also less likely to advance to well-paying executive roles. Even among Black workers with a bachelor’s degree, their rates of unemployment are similar to white workers who don’t have a college degree. 

In addition, 65% of the Black population in the US is concentrated in just 16 states—and 10 of those states are in the South. The states with higher-than-average Black populations score below the national average as it relates to education, fiscal stability, opportunity, quality of life, employment, and several other categories. 

Nick Noel, engagement manager in the Washington, DC, office, says in the MIBEM video, “The McKinsey Institute for Black Economic Mobility is an independent think tank with the mission of advancing economic mobility for Black communities globally. The firm’s mission has always been about client service and bringing distinctive insights. And we believe that with that purpose and that mission at the firm level, why can’t we bring that to Black communities globally?”

Some of the content already on the website includes such topics as new approaches to racial equity, building supportive ecosystems for Black-owned US businesses, the case for accelerating financial inclusion in Black communities, and improving lives and livelihoods for ethnic minorities in the United Kingdom. 

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Terri Williams

Terri Williams is a writer based in Birmingham, AL, who specializes in business, technology, education, real estate, and personal finance – and dabbles in home improvement/décor. She has bylines at The Economist, USA Today, Bankrate, Investopedia, US News & World Report, American Bar Association Journal, Verizon, Realtor.com, Apartment Therapy, and several other clients you’ve probably heard of. Follow her adventures @Territoryone.