Money, gender bias and salary inequality in workplace between a team of equal professional employee … [+]
Juneteenth is a time to celebrate the end of slavery in the United States, but it is also a time to reflect on the ongoing legacy of racial inequality. One of the most significant ways in which this inequality manifests itself is in wealth and financial wellness, which is highlighted in a recent study by the NBER titled “Wealth of Two Nations: The US Racial Wealth Gap, 1860-2020. According to a recent study by the Federal Reserve, the median wealth of white households is currently 10 times greater than the median wealth of Black households. This gap has widened in recent years, due in part to factors such as the COVID-19 pandemic and the Great Recession.
The racial wealth gap has several negative consequences as highlighted in the latest “Workplace Financial Wellness in America Report” by Financial Finesse. It makes it more difficult for Black families to build wealth, save for retirement, and purchase homes. Beyond those effects, it also contributes to racial disparities in physical and mental health, education, and employment. The compounding impact of these persistent inequalities leads to generational hardships that are becoming increasingly difficult to overcome.
There are, however, several paths that can be simultaneously taken, where collective efforts by employers, governments and individuals can put an end to this legacy. Here are some possible solutions that can help reduce this inequality:
Financial education and coaching: Financial education and coaching can help people make better financial decisions around the foundational areas of budgeting, saving, and investing. This can help individuals build wealth and improve their financial and mental well-being.
Start early to plant the seeds for the future: I am a big believer in incorporating financial literacy instruction in schools as early as kindergarten through high school and leveraging the various school PTOs or other organizations to provide supplementary support to families in need of these services. Programs like the JumpStart Coalition for Personal Financial Literacy and You for Youth Financial Literacy For All are said to provide evidence-based curriculums that can serve as a great starting point.
Utilize workplace opportunity to address the masses now: A broad-based financial wellness program, equipped with 1:1 coaching, innovative virtual financial coaching technology, group-based learning, and educational resources can be a critical first step. Employers need to ensure that they are discerning which financial wellness services will provide the experience and expertise necessary to move the needle.
Collaborate with employee resource groups: Working with ERGs can create tailored financial wellness benefits and can help directly address root causes of financial stress within specific communities. A company like OFCOLOR is specifically focused on providing a financial wellness platform available to all but centered on employees of color, allowing them to meet these employees where they are in an intentional and prescriptive manner.
Increase access to affordable housing and credit: Affordable housing and credit are essential for building wealth. By increasing access to these resources, we can help individuals and their families build equity in their homes and access the credit they need to start businesses and invest in their future. Some organizations that are focused on supporting underserved communities include AmeriCorps, Enterprise Community Partners, and the National Urban League, which is a civil rights organization that works to improve the lives of African Americans through advocacy research and programs in education, employment, housing, and health.
As you may already know, there is a need for further expansion in this space not only through non-profits and the private sector but through federal and state funded government programs as well.
Systemic change: The racial wealth gap is a result of systemic racism. By reforming our criminal justice system, investing in Black communities, and dismantling the barriers that prevent Black people from achieving economic success, we can help address the root causes of the racial wealth gap. This is where our federal, state, and local lawmakers can step in and pass new legislation and develop policies centered around addressing the racial wealth gap in addition to seriously considering the great equalizer: reparations.
As we commemorate Juneteenth, let’s remember the significance of this holiday in the struggle for freedom and equality. We can use it as an opportunity to recommit ourselves to the ongoing fight against wealth and financial wellness inequality. By working together, government, employers, and individuals can build a future where every individual has the opportunity to thrive financially and achieve lasting well-being, regardless of their race, ethnicity, or socioeconomic background.