On this day: Rosa Parks refused to give up her bus seat
December 01, 2023
By Jenny Horn
Closing racial gaps across the economy is not only about righting historical wrongs – it is about choosing a more dynamic future and realizing the full potential of a massively underutilized source of talent, to the benefit of all Americans, as less wealth within a community translates into fewer opportunities for upward mobility and is compounded by lower income levels and fewer chances to build wealth or pass accumulated wealth down to future generations. As we know, wealth in the United States is unequally distributed by race – particularly between white and Black households. In fact, Black families have an incredibly small fraction of wealth when compared to white families, leaving these communities less economically secure and with far fewer opportunities for economic mobility and progression.
Today, the median annual wage for Black workers is approximately 30% lower, or $10,000 lower, than that of white workers — a figure with heinous implications for household economic security, consumption, and the ability to build wealth within both single and multiple generations. Additionally, even though Black workers make up 12.9 percent of the U.S. labor force today, they earn only 9.6 percent of total U.S. wages and benefits.
Multiple interventions can contribute to improving labor market outcomes for Black men, women, and families, including diversifying hiring and promotions to improve the overall workplace experience, strengthening educational pathways, improving the quality of jobs disproportionately held by Black workers, preparing for the future of work, helping the excluded enter the labor market, and considering how to expand opportunity across industries and geographies.
Meanwhile, implementing the Equal Rights Amendment within the U.S. Constitution once and for all, thus ensuring the rights and equality to all women regardless of race barriers that currently exist today, would allow Congress to implement these very interventions amongst the working class of women in totality, including those who have been historically excluded such as Black women and other women of color.
The advancement of Black women into higher-paying positions is critical in light of the role they play in providing economic stability for their families. Women of all races are less represented in leadership roles, but women of color face double hurdles of sexism and racism. A study of 590 U.S. corporations found that only 58 Black women are promoted into manager roles for every 100 men, and 64 Black women are hired directly into these roles for every 100 men.
Today, women’s wages still lag behind men’s, particularly at the high end of the wage distribution scale. In 2013, women’s hourly wages were 83.4 percent of men’s at the median of the wage distribution scale. Additionally, women are disproportionately in low-wage and service occupations and are less likely to have workplace benefits such as employer-sponsored insurance and pensions than their male counterparts. This lifetime of compensation inequality means that women are more economically vulnerable in retirement: Elderly women are more than 10 percentage points more likely to be economically vulnerable than men.
There is no cost to the economy of women catching up to men. Through increasing bargaining power of workers generally, it’s possible to reduce the gender gap and increase wages, particularly for those groups who are at even greater risk of disproportionate negative impacts. The Equal Rights Amendment would provide both an outlet for such representation and protection as well as the explicit assurance that women of all groups would be owed what their male counterparts are already receiving.