The state of Black residents: Place, racial equity, and transformative solutions

At the current pace, it could take more than three centuries for the United States to achieve racial parity. How can different types of communities move toward delivering a better quality of life for all residents?

During a McKinsey Live session, senior partner Shelley Stewart III and partner JP Julien discussed the latest research from the McKinsey Institute for Black Economic Mobility. Building on a larger body of work—including the 2021 report The economic state of Black America: What is and what could be—the think tank examined which types of communities—cities, suburbs, exurbs, and rural counties—offer Black residents the best quality of life and which have moved closer to attaining the same outcomes for people of all races.

Black Americans’ lived experiences vary by place. In the past decade, there have been some improvements in the overall economic, social, and physical well-being of Black residents. However, the snail’s pace of progress hasn’t come near to closing the ever-widening gap between Black (as well as Latino) residents and White residents living in the same place. In fact, nowhere in the United States do Black residents experience outcomes equal to those of their White neighbors. Even in the suburbs and exurbs, where the balance of positive outcomes is better for Black residents than in other areas, large disparities persist. Unless progress greatly accelerates, it will take 110 to 320 years to eliminate the gap between the races.

Urgently addressing the inequalities would significantly benefit both local and national economies. Investments in two areas that are ripe for change would set the stage for improving racial parity:

• Affordable housing. The scale of this challenge—a needed 7.3 million housing units, with a potential total cost of $2.4 trillion—can be met only if communities’ private, public, and social sectors work together.
• Childcare and early-childhood education. Although the challenge is daunting—6 million additional student places, with a $78 billion price tag—investing in children has short- and long-term returns for the children as well as their communities.

Accelerating the progress toward parity will require integrated, place-based transformation—that is, sustained solutions that are bold but also granular, based on localities. The initiatives also must resonate with the communities they seek to serve, with Black leaders and stakeholders helping to shape them.

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For more on this topic, read the report The state of Black residents: The relevance of place to racial equity and outcomes and the article “Mapping the road to prosperity and parity for Black and Latino residents across America,” listen to the podcast “Location, location, location: The impact of place on racial equity,” and interact with “The impact of climate change on Black populations in the United States,” on McKinsey.com.