Giving Compass' Take:

• Prosperity Now shares its 2019 Prosperity Now Scorecard which outlines the financial health of households in all 50 states.

• How can funders work to close the gaps identified in this research? 

• Learn about the role of entrepreneurship in building wealth for black Americans. 

Headlines of national economic strength belie the reality that millions in the US are living in financial precarity. Even worse, families that are still recovering from the last recession will be the first to suffer from the next recession, which many analysts warn is around the corner. Because people of color, particularly Black, Latino, Native American, Native Hawaiian. and Pacific Islander people, live in a different economic reality than what oft-cited national data shows, we need to be honest about the impacts race and ethnicity have on economic outcomes. The exploration and acknowledgment of racial and ethnic disparities and their origins make our data clearer and our local, state and federal policies stronger. Solutions to our collective economic peril will remain elusive if we do not center the impact of race and racism.

Welcome to the 2019 Prosperity Now Scorecard—a data resource that illustrates the financial health of families in all 50 states and the District of Columbia (DC). Our previous Scorecards have explored how economic prosperity is far from reach for millions of people and that the decisions of our policymakers, not the decisions of low-income people, are largely to blame. Those themes are still true, and this year’s Scorecard dives deeper into the outcomes of people of color in states across the country.

This year, the Scorecard includes more data by race and takes a new approach to scoring states on their relative outcomes. This brief shares insights on racial and ethnic disparities in states, how states compare when accounting for these disparities, general trends across states and policy implications. The following is a visual essay explaining our latest ranking methods, our top four findings from the 2019 Scorecard state-level data and the progress states have or have not made towards implementing policies that start chipping away at these issues.

To compare states, we have developed an index of disparities by race, which is then used to weight our overall and issue area rankings. Each state now receives an overall Scorecard rank which is a factor of separate ranks: an Outcome rank for all residents and a Racial Disparity rank on the gap in outcomes between White residents and residents of color. The Outcome rank accounts for 60% of the Scorecard rank and the Racial Disparity rank for 40%. Notably, this average is then re-ranked to obtain the final Scorecard rank, making it possible for states to have lower Outcome and Racial Disparity ranks than their final Scorecard rank.

Our new ranking methodology allows us to disentangle a state’s overall outcome from the inequities in economic outcomes for its different racial and ethnic populations. Roughly half of the states (23) as well as DC had a final Scorecard rank lower than their Outcome rank after accounting for the size of the racial disparities in the state, and 14 of those states and DC saw a rank reduction of five spots or more.

For example, Minnesota and Maryland’s rankings have lowered to reflect the large racial disparities in outcome measures within these states. Minnesota has the best Outcome rank of all 50 states and DC, but its massive racial disparities earn Minnesota a Racial Disparity Rank of 44, reducing the state’s overall rank 12 spots to 13. Maryland has an Outcome rank of 19, but its Racial Disparity rank of 36 pulls its overall Scorecard rank down five spots to 24.