As the nation prepares to celebrate Martin Luther King Jr. Day, significant disparities remain between the income and employment rates of white and Black Americans. In response, WalletHub has released its comprehensive report on the “States That Have Made the Most Racial Progress,” evaluating 22 key indicators of equality across all 50 states and the District of Columbia, including median annual household income, standardized test scores, and voter turnout. Texas tops the list as the state that has made the most racial progress, particularly in reducing health disparities and closing gaps in the business sector. Wyoming and Mississippi also show significant income levels and poverty reduction improvements, respectively. The report identifies regions with the highest and lowest disparities, noting that Hawaii has the smallest median annual income gap, while the District of Columbia has the largest.
Expert commentary within the report points to historical discrimination in housing and lending as significant contributors to racial wealth gaps. Dr. Rodney Coates of Miami University suggests that state and local authorities can help reduce these disparities through equitable funding for education and incentives for businesses to operate in economically disadvantaged areas. WalletHub Analyst Chip Lupo stated, “Wyoming has closed the racial income gap by 42 percentage points since 1979, and Mississippi has decreased disparity in poverty levels by 27 percentage points since 1970.” Dr. Edlin Veras of Swarthmore College adds, “The major causes of the racial wealth gap are undoubtedly tied to the legacies of slavery and white supremacy. Black people’s concerted and systematic exclusion from politics, business, education, and land ownership in the United States has long-term effects that are still evident today.”
For more detailed findings and expert insights, visit the full report on WalletHub.
States that have made the most racial progress
By Adam McCann
WalletHub Financial Writer
Although the U.S. has made a lot of progress toward racial equality since the Civil Rights Movement, we still need to do better to ensure equal opportunities for everyone. A startling 44% of Americans feel either somewhat or very pessimistic about whether the country can bring about racial equality. Only 28% feel somewhat or very optimistic.
It’s easy to see why people are pessimistic about equality when you look at economic data. For example, the median yearly income of white, non-hispanic men is around $20,000 higher than that of Black men, and the unemployment rate is vastly higher for Black people than white people.
As we think about ways to improve equality in the future, we can also recognize the steps toward racial harmony we’ve already achieved — in our workplaces, in our schools and in our voting booths. To highlight the states that have improved the most, WalletHub measured the gaps between Black people and white people across 22 key indicators of equality in each of the 50 states and the District of Columbia. Our data set ranges from median annual household income to standardized-test scores to voter turnout.
In-Depth Look at the States With the Most Racial Progress
Texas
The state that has made the most racial progress over the past few decades is Texas, in large part because it has done a lot to close the gap in health outcomes between white and Black residents. The state has reduced the gap in health insurance coverage by 12.4 percentage points since 1995, the most of any state. In addition, Texas has done the most to decrease the share of Black residents suffering from poor health and diabetes. It’s made the second-most progress when it comes to obesity, too.
Texas has also made a lot of racial progress in the business sector. For example, between 2002 and 2021, the gap in business ownership between white and Black residents decreased by 6.4 percentage points, the sixth-largest decrease in the nation. The disparity in the share of business executives who are white vs. Black also decreased by close to 8 percentage points, the seventh-largest decrease.
Finally, Texas is the fourth-best state when it comes to making racial progress in the parole system, which is important since Black people have faced a lot of discrimination in the criminal justice system throughout history.
Wyoming
Wyoming has made the second-most racial progress. For one thing, it has reduced the gap between the earnings of white and Black Americans by over 42 percentage points since 1979, the largest reduction in the nation.
Wyoming has also made great strides when it comes to education, cutting the disparity between the share of white and Black residents who have at least a bachelor’s degree by 19 percentage points since 1970. Making educational attainment more equitable is likely one of the major reasons why there has been so much progress when it comes to salaries, as higher education correlates with higher earnings.
On top of that, Wyoming ranks as the third-best state for progress when it comes to unemployment, and the 12th-best for improving the amount of Black residents in executive positions.
Mississippi
Mississippi has closed the poverty rate gap by nearly 27 percentage points since 1970. That is the most significant reduction in the U.S., and one of the main reasons why Mississippi ranks as the state that has made the third-most racial progress. It also ranks as the seventh-best state for reducing the household income disparity.
Another place Mississippi stands out is improving voter participation. Between 1980 and 2020, the gap in voter participation rates between white and Black residents shrank by 15 percentage points. Making progress in this area is vital for ensuring that no one is disenfranchised, so everyone who wants to vote is able to.
Finally, Mississippi has improved outcomes when it comes to health. For example, it is the second-best state when it comes to progress on overall health and the fourth-best for closing the gap in health-insurance coverage between white and Black residents.
Ask the Experts
The harsh realities of racial segregation and discrimination are no longer as visible in America as they once were — but they persist. In order to understand the driving forces behind such problems and possible solutions, we asked a panel of experts to share their thoughts and ideas. Click on the experts’ profiles to read their bios and responses to the following key questions:
- What are the major causes of the racial wealth gap between Black and white households?
- What can state and local authorities do to help reduce racial gaps in wealth, employment and education?
- Should state and local authorities work to reduce racial segregation in housing? If so, how?
- Why have some states been more successful than others in addressing racial inequalities?
Methodology
In order to determine the most racially integrated states and those that have achieved the most racial progress over time, WalletHub compared the 50 states and the District of Columbia across four key dimensions: 1) Employment & Wealth, 2) Education 3) Social & Civic Engagement and 4) Health.
We evaluated those dimensions using 22 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the highest level of racial integration and progress.
This analysis compares only Black people and white people in light of racial tensions in recent years that sparked the Black Lives Matter movement. We released this report ahead of the holiday honoring Dr. Martin Luther King Jr., who played a prominent role in the Civil Rights Movement to end segregation and discrimination against Black people.
We ranked the states and the District of Columbia based on two key measures:
- Racial Integration – Determined by subtracting the values attributed to white people and Black people for a given metric, using only the most recent available data.
- Racial Progress – Determined by subtracting the values attributed to white people and Black people for a given metric, using the oldest available data and the most recent. Based on the result, we calculated the percentage of progress for that specific metric in the analyzed period.
If in some states Black people scored as high as or better than white people on a given metric, all such states were awarded the maximum number of points.
Finally, we determined each state and the District’s weighted average across all metrics to calculate its total score and used the resulting scores to rank-order the states.
Employment & Wealth – Total Points: 40
- Median Annual Household Income: Full Weight (~5.71 Points)
- Labor-Force Participation Rate: Full Weight (~5.71 Points)
- Unemployment Rate: Full Weight (~5.71 Points)
- Homeownership Rate: Full Weight (~5.71 Points)
- Poverty Rate: Full Weight (~5.71 Points)
- Business Ownership Rate: Full Weight (~5.71 Points)
- Share of Executives: Full Weight (~5.71 Points)
Education – Total Points: 20
- Share of Adults with at Least a High School Degree: Full Weight (~5.00 Points)
Note: “Adults” include the population aged 25 and older. - Share of Adults with at Least a Bachelor’s Degree: Full Weight (~5.00 Points)
Note: “Adults” include the population aged 25 and older. - Standardized-Test Scores: Full Weight (~5.00 Points)
Note: This metric is based on the results of the National Assessment of Educational Progress (NAEP). - Public High School Dropout Rate: Full Weight (~5.00 Points)
Social & Civic Engagement – Total Points: 20
- Share of Single-Parent Households: Full Weight (~5.00 Points)
- Share of Adult Population on Parole: Full Weight (~5.00 Points)
- Share of Veterans: Full Weight (~5.00 Points)
- Voter-Turnout Rate: Full Weight (~5.00 Points)
Note: This metric measures the rates for presidential elections.
Health – Total Points: 20
- Share of Adults in Poor or Fair Health: Full Weight (~2.86 Points)
- Share of Insured Adults: Full Weight (~2.86 Points)
- Share of Obese Adults: Full Weight (~2.86 Points)
- Share of Diabetic Adults: Full Weight (~2.86 Points)
- Share of Preterm Births: Full Weight (~2.86 Points)
- Share of Live Births with Low Birthweight: Full Weight (~2.86 Points)
Note: “Low Birthweight” refers to less than 2,500 grams. - Infant-Mortality Rate: Full Weight (~2.86 Points)
Note: This metric measures the number of deaths of infants younger than one year per 1,000 live births.
Sources: Data used to create this ranking were collected as of December 17, 2024 from the U.S. Census Bureau, National Center for Education Statistics, U.S. Equal Employment Opportunity Commission, Bureau of Justice Statistics, and Centers for Disease Control and Prevention.
