How COVID-19 Impacted Black-White Financial Inequality
COVID-19 has disrupted everything from economic markets to personal finances, but not everyone feels its effects equally. When compared with White Americans, Black Americans’ financial situations have been disproportionately affected by the pandemic.
In this infographic from McKinsey & Co., we outline the financial vulnerabilities of Black Americans, their increased usage of financial services since the onset of the pandemic, and their lower satisfaction levels with those services.
Financial Vulnerabilities of Black Americans
Compared to White Americans, more Black Americans say their job and income have been negatively impacted by COVID-19.
|My job has been negatively impacted by COVID-19||My income has been negatively impacted by COVID-19|
Looking forward, Black Americans also report greater job security concerns and have less savings to protect themselves financially. In the event of a job loss, 57% of Black Americans report their savings would last four months or less, compared with 44% of White Americans.
With less of a cash buffer on hand, Black consumers are also more likely to have missed a recent bill payment.
|Skipped at least 1 payment||Partially paid at least 1 bill||Paid in full|
This includes being unable to pay for basic items such as utilities, telephone and internet, and mortgage payments.
How do they begin to manage these challenges?
Use of Financial Services
Black Americans increased their use of financial services more than White Americans.
Banking activities in the past two weeks, per March-June 2020 surveys
|Withdrew cash||Deposited cash||Deposited checks||Contacted bank for service on account||Opened new accounts||Received advice on digital tool usage|
For example, Black Americans were about twice as likely to request account service, open an account, or receive advice on digital tools. In addition, Black families were more likely to leverage a fintech platform and have been more active in opening fintech accounts since the start of the COVID-19 crisis.
However, as Black Americans seek out more financial help, some are not happy with the service they receive.
Satisfaction with Financial Services
Overall, Black families are less satisfied than White families across all types of financial activities. These differences were most pronounced for digital tool advice, where 38% of Black Americans were dissatisfied or very dissatisfied, compared with just 12% of White Americans.
Even though Black people were less satisfied with banking services, they were more likely to say that bank performance was above their expectations. This may suggest that expectations are lower for Black families than they are for White families.
Black Americans were also much less likely to trust their financial advisor.
|Do not trust/losing trust||Indifferent||Gaining trust/trust|
From March-June 2020, the percentage of Black people distrusting their advisors rose from 12% to 32%. Over the same time period, White people’s distrust of financial advisors remained stable at 10%.
A notable exception: White and Black Americans were both satisfied with fintech providers. Only 5% of White Americans and 8% of Black Americans expressed some level of dissatisfaction with fintech companies.
Time to Examine the Financial System?
COVID-19 has perpetuated Black-White financial inequality. Data shows that Black families are more likely to be financially vulnerable, and increase their use of financial services during the COVID-19 crisis. However, they are less likely to feel satisfied with these services.
Financial institutions can urgently review their remote and in-person customer service procedures to ensure the needs of all families are being met.
Visualizing the UK and EU Trade Relationship
The UK and the EU have recently laid out new terms for their relationship. So how important is the UK’s trade with the EU?
Visualizing the UK and EU Trade Relationship
With Brexit solidified and a new trade deal having been struck between the UK and the EU, it appears that a sense of normalcy has returned to the European continent.
The Trade and Cooperation Agreement (TCA) between the two entities came into effect on January 1st, 2021, corresponding with the UK officially leaving the EU Single Market and Customs Union on the same day. The new deal will help the status quo of trade continue, but how important is trade between the EU and the UK?
This visualization, using data from the British House of Commons’ Statistics on UK-EU Trade Briefing Paper, reveals the significance of trade between the UK and EU member states.
Who Does the UK Trade With in the EU?
The EU is the UK’s biggest global trading partner, representing 47% of the country’s total trade.
To break it down further, the EU is the buyer of 42.6% of the UK’s total exports, while also being the source of 51.8% of their total imports. Here’s a closer look at exports and imports by country.
|Country||% of UK's Exports to the EU||% of UK Imports from the EU|
|🇨🇿 Czech Repbulic||1.1%||1.8%|
|🇪🇺 Total EU 28||100%||100%|
The UK’s biggest trading partners within the EU are Ireland, Germany, the Netherlands, and France. Germany comes in at number one, making up nearly 21% of the UK’s imports and receiving almost 19% of the country’s exports.
Here’s a breakdown of the trade balances between the UK and the individual EU member states.
What’s in the Bag?
In any trade relationship, it’s also worth examining what types of products and services are switching hands.
The UK’s top three goods imports from the EU (in terms of percentage of total imports) are:
- Motor vehicles (18%)
- Pharmaceuticals (7%)
- Electric machinery and appliances (4%)
Without the new agreement, goods would face tariffs based on the World Trade Organization’s standards. For example, motor vehicles, would have an average tariff of 10% imposed on them, without the provisions of the agreement.
The UK’s top three service imports from the EU are:
- Travel (33%)
- Business services (27%)
- Transportation (18%)
Looking at services, the main import from the EU is travel, followed closely by business services and transportation. Travel makes the top three, as many countries in the EU make attractive vacation spots for UK citizens.
The UK’s top three goods exports to the EU (in terms of percentage of total exports to the EU) are:
- Petroleum and petroleum products (12%)
- Motor vehicles (10%)
- Transport equipment (6%)
In terms of exports, petroleum is the UK’s largest export to the EU, representing 68% of the country’s total petroleum exports.
The UK’s top three service exports to the EU are:
- Business services (33%)
- Financial services (21%)
- Travel (14%)
The main service export is business services, such as accounting, legal, advertising, R&D, engineering, and so on. Travel to the UK is a significant revenue generator as London is one of the top tourist destinations in the world.
EU vs. Global Trade
The UK’s relationship with other countries has remained steady. China is one of the country’s most important export destinations, growing 7% per year from 2010-2019.
At the same time, the UK’s exports to the United States have grown just over 4% per year over the same period, continuing to increase at a similar rate up to 2030.
While the UK currently has a £79 billion ($108 billion) trade deficit with the EU, they have a surplus of £49 billion ($67 billion) with non-EU countries. Additionally, the share of the UK’s exports going to the EU has been consistently falling over the last number of years. Foreign direct investment flows between the two entities have also been drastically reduced.
However, the UK and EU trade relationship is still highly intertwined and significant. Not only are the two connected through intangible flows but physically as well via pipelines, transport highways, and cables. In a typical year, 210 million passengers and 230 million tonnes of cargo are transported between the two entities.
The TCA will help to regulate these flows and continue a sense of status quo, however, it’s worth noting that if EU regulations are not met, tariffs could be imposed.
The Economist Intelligence Unit recently determined risk and resilience factors for different UK industries based on the agreement. The report found that the food & agriculture, automotive, and financial services industries are most at risk, due to interconnected supply chains and the risk of tariffs being imposed. The life sciences and tech industries stand to do the best.
The Trade and Cooperation Agreement
Overall, Brexit has had significant ramifications for all nations involved. Ireland, for example, is now geographically cut off from the EU, creating potential obstacles for both the movement of people and goods.
Now, after years of discussions, the UK and the EU have finally agreed to the terms for their new relationship, with a focus on sustainable trade, citizens’ security, and governance for long-standing cooperation, in order to guarantee a level playing field. The TCA has helped ease the transition, and while they’re no longer in a union, the UK and the EU have created a strong base for trade to continue normally.
Mapped: The Wealthiest Billionaire in Each U.S. State in 2021
Alongside Elon Musk and Jeff Bezos, who are the richest people in the U.S.? This map reveals the wealthiest billionaire in each U.S. state.
Mapping the Wealthiest Billionaires in Each U.S. State
It is a testament to the burgeoning wealth of the U.S. that there is a billionaire in nearly every U.S. state. The country is home to around 800 billionaires among its 330 million people.
This map from HowMuch.Net reveals the wealthiest billionaire in each U.S. state.
The Richest of the Rich
Billionaires are a constant across the United States. The only states that don’t house one of these high-net-worth individuals are: Alabama, New Mexico, North Dakota, Alaska, Vermont, New Hampshire, Rhode Island, and Delaware.
Here’s a further breakdown that shows the wealthiest billionaire in each U.S. state:
|Billionaire||Net Worth (Billions)||State|
|Michael Bloomberg||$54.9||New York|
|Phil Knight and Family||$51.7||Oregon|
|Ernest Garcia II||$18||Arizona|
|Thomas First Jr. and Family||$14.4||Tennessee|
|John Menard Jr.||$14.2||Wisconsin|
|Tom and Judy Love||$8.2||Oklahoma|
|Rocco Commisso||$6.9||New Jersey|
|James Goodnight||$6.5||North Carolina|
|Les Wexner and Family||$5.6||Ohio|
|Pauline Macmillan Keinath||$4.9||Missouri|
|Jonathan Nelson||$2||Rhode Island|
|Anita Zucker||$1.9||South Carolina|
|T. Denny Sanford||$1.6||South Dakota|
|Jim Justice||$1.2||West Virginia|
Among the richest of the rich in the U.S., most are men, but there are 10 female billionaires who are the wealthiest in their respective states.
Jeff Bezos is worth an astounding $193.8 billion. Amazon became increasingly successful during the pandemic, as lockdown orders caused many people to have to stay home and shop online rather than in stores.
The runner up, Elon Musk, is worth $191.8 billion. The recent boom in Elon Musk’s net worth was due to the sharp rise in Tesla’s share prices. Recently, Elon Musk shifted his residence to the state of Texas, a move which is indicative of a larger trend of internal migration away from America’s most pricey urban areas.
Mind the Gap
Many of these individuals have actually become more wealthy during the COVID-19 pandemic, widening the existing gap of wealth inequality within the country.
Together Jeff Bezos, Elon Musk, Mark Zuckerberg, Bill Gates, and Warren Buffet (the five richest American billionaires) experienced a collective 85% increase in their wealth since the pandemic took hold. This equates to an added $303 billion in wealth.
Overall, while we rely on companies like Amazon for our socially-distanced shopping and Facebook to keep us connected during the pandemic, Jeff Bezos and Mark Zuckerberg will likely continue to accrue immense fortunes. The wealthiest billionaires in the U.S. are likely to continue growing their net worth, pandemic or not, and have been consistently outpacing the lower to upper-middle income groups.
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