Diversity, equity & inclusion Inequities at work contribute to the Black-white wealth gap
Black-white disparities in health, wealth and careers in US society are well documented:
- Black Americans experience lower rates of health coverage and access and higher rates of chronic disease, illness and death across a wide range of health conditions.
- White American families’ median net worth is nearly eight times higher than Black families’ ($188,200 versus $24,100), and, alarmingly, the wealth gap has grown over the last 50 years.
- White employees earn 126% of what Black employees earn in weekly wages, and Black people are underrepresented in higher career levels (manager, senior manager and executive levels).
Race-based inequities exist within the workplace meaning pay and career equity can influence the wealth gap for Black people. While public-policy discussions focus considerable attention on the contribution of unemployment and under-employment in driving the problem, less is known about how Black people’s experiences at work affect their relative wealth position. Certainly, full-time employment with established employers puts Black people in a better position than those who lack such opportunity. But race-related gaps in pay and career opportunity among those employed can also contribute to the wealth gap. Therefore, employers can play a central role in closing the wealth gap by addressing inequities in the workplace.
Disparities are not the same, in type or degree, across all employers. Their root causes differ, and effective solutions will be specific to the circumstances. However, to the extent employers can identify and eliminate disparities in their own houses, they will contribute to a greater social good, including, but not limited to, closing race-based wealth gaps.
Uncovering the root causes of workplace disparities
Mercer has long worked with organizations on comprehensive and rigorous statistical analyses of workforce data to identify, quantify and help understand what factors most influence critical workforce outcomes such as promotion, performance, retention and pay. The results, unfortunately, are far from encouraging, particularly for Black employees.
We commonly find significant, persistent and sometimes very sizeable disparities in career advancement and performance assessments, and often, in pay. These disparities remain even after accounting for the effects of other legitimate, business-relevant factors (for example, education, job type or location) that also influence the outcomes of interest. The “unexplained” differences associated with race signal and compound the failure of employers to deliver career equity, even more so than pay equity, and remain the most severe challenge to Black people thriving professionally and financially in the corporate sector.