The Best Cities for Black Women to Flourish Financially

Where can Black women feel supported and flourish financially? When posed that question, Dr. Lori Martin, a professor of African and African American studies and sociology at Louisiana State University, had this to say: "A livable place for Black women is safe, and for women with children, it is home to schools where all students have access to an excellent education. It would also be diverse, with a visible and thriving Black community, including Black businesses.”

While the socioeconomic realities of our current time touch all corners of the country, there are pockets of the U.S. where the wealth gap narrows and Black women have more opportunities. MoneyGeek analyzed data on income, the cost of crime, homeownership and poverty levels from 200 cities across the United States to rank the best — and worst — cities for Black women to live and financially flourish in.

Black women serve a critical role in the American economy, contributing $3.8 billion to the GDP annually. Often the breadwinners for their families, they have the highest labor force participation rate for women and make up 21% of all women-owned businesses.

Even with these significant contributions, Black women live at the intersection of multiple barriers and experience the compounded effects of racial and gender bias. This combination results in low-wage jobs and a significant wealth gap: Black women who work full-time, year-round earn 62 cents for every one dollar white men earn working full-time, year-round.

Less access to economic opportunities puts Black women at a disadvantage in building wealth. The FDIC’s Survey of Household Use of Banking and Financial Services showed that 13.8% of Black households were unbanked versus 2.5% of white households. Unbanked households are credit invisible — that is, they don’t have a credit history and, therefore, can’t build credit. Having no credit history makes it difficult to take advantage of credit cards to manage cash needs and mortgages to buy homes.

Blacks are twice as likely to use payday loans, which may be appealing as a temporary fix for cash-flow problems but make it challenging to grow financially. That’s because 69% of people who utilize payday loans do so to cover recurring expenses like credit card bills, rent and food. Recurrent use of these high-fee services can create a vicious cycle where people using payday loans are locked into a continual shortage of cash, in part due to high fees. Black women also face health care disparities, experience higher rates of poverty and victimization from violence and lag behind in earnings and homeownership.

Access to jobs, higher pay and health care are some of the unique challenges Black women face when it comes to livability experiences, explains Kalinda Ukanwa, Ph.D., an assistant professor of marketing at the Marshall School of Business. MoneyGeek interviewed Dr. Ukanwa and other experts to elaborate on the unique challenges that Black women face and the solutions to help them. The views expressed are the opinions and insights of the individual contributors.

Even before the pandemic, Black women were underpaid nearly $50 billion in forfeited wages, the Economic Policy Institute reported. COVID-19 has only heightened how the racial/gender wage gap and unemployment have disproportionately affected Black women, who suffered the most significant job losses. But there are tools and resources that can provide Black women economic opportunities and empowerment. Dr. Ukanwa shares additional solutions.

To rank the Best Cities for Black Women, MoneyGeek analyzed data from the American Community Survey, MoneyGeek’s Safest Cities and Safest Small Cities and Towns studies, and the Bureau of Economic Analysis. MoneyGeek started with over 600 places in America with populations of 65,000 or more. Places without granular data about Black women or lacking other data points for the analysis were removed to get to the final set of 200 cities.

The ranking of the Best Cities for Black Women was based on eight factors: safety, Black population, educational attainment, poverty rates, income, employment, health insurance and homeownership. Each factor was weighted equally and scaled to a score between 0 and 1. The factors were calculated as follows:

Safety (full weight): Safety was based on the per capita cost of crime calculated in MoneyGeek’s Safest Cities series. The cost of crime was logged to adjust the distribution.

Black Population (full weight): Representing an available community of Black individuals, the Black population was adjusted to a log scale. For communities with Black populations below 20,000 and representing less than 12% of the population, the score for this value was set to zero.

Educational Attainment (full weight): This metric equally comprises two metrics.

• High School Diploma Gap (50%): the difference in percentage points of the rate of Black high school diploma achievement compared to the national rate of white high school diploma achievement.
• Higher Education Diploma Gap (50%): the difference in percentage points of the rate of Black bachelor degree or greater educational attainment compared to the national rate of white bachelor degree or greater educational attainment.

Poverty Rate (full weight): The percentage point difference of the city’s rate of Black women earning at or above the poverty level and the rate of all other women living above the poverty level nationally.

Income (full weight): This factor equally comprises two metrics.

• Local Income Gap (50%): the ratio of Black female median income as a percentage of the local median income of white males.
• National Income Gap (50%): the ratio of Black female median income adjusted for purchasing power as a percentage of the national median income of white males.

Employment (full weight): The difference in percentage points between the Black female employment rate and the white male employment rate in the locality.

Health Insurance (full weight): The difference in percentage points between the rate of Black women ages 18-64 that have health insurance and the rate of health insurance for all other races nationally.

Black Female Homeownership (full weight): This factor comprises three metrics.

• Local Owner-Occupied Gap (25%): the difference between the Black household owner occupation rate and the owner occupation rate of all other races in the locality.
• National Owner-Occupied Gap (25%): the difference between the Black household owner occupation rate in the locality and the owner occupation rate of all other races nationally.
• Black Female Income to Home Value (50%): the ratio of Black alone female median income to local median home value.

The data points presented are defined as follows:

• Rank: rank in the overall analysis with the lower the rank indicating a higher overall score.
• Final Score: This is the weighted score incorporating the factors defined in the study Methodology.
• Black Population: The size of the Black population.
• Median Black Woman Adjusted Income: The median income for Black women in the city adjusted for purchasing power.
• Cost of Crime per Capita: The societal costs of crime on a per capita basis as described in the Methodology.
• % Black Women Above Poverty Level: The percentage of the Black female population at or above the poverty level.
• Local Black Women's Equal Pay Day: Calculated as the percentage greater the median full-time white male income in the locality than the median full-time Black female income. It is assumed that the income ratio calculated is the same in 2020 as the 2019 data set shows.
• Black Women Homeownership Score: This is the Black Female Homeownership factor defined in the Methodology.