Jay Z and Damon Dash NFT Beef, Black Professionals Are Not Excited About Going Back to the Office, The Black Wealth Gap and How To Close It
Black Inc?is a weekly newsletter covering business, financial news and analysis about the Black economy meant to educate, empower and of course entertain. To subscribe, click on the?'Subscribe' ?button above.
What's up,?fam?
It became abundantly clear to your boy last week that New York City was back when I saw a rat climbing up the stairs at the A train stop on Fulton St on my way to the office. Nature is healing out here, y'all!
Let's jump into this week's newsletter!
-Eric
Black Money on The Move
Your weekly roundup of Black excellence making moves in the world.
Only 3% of Black Professionals Want to Return to the Office Full Time Post-Pandemic
How long have we been in this pandemic now? 20 years? 30? I can't even call it anymore. As COVID vaccination rates head toward 70% in the United States and companies start summoning employees back to the office, one group that is not looking forward to going back to the office full time is Black professionals.
The Numbers
According to a March study released by Future Forum, a research group formed by software company Slack Technologies, only 3% of Black professionals want to go back to the office after the pandemic compared to 21% of white professionals.
Some Reasons. While a lot of non-Black folks have had their own reasons for not wanting to go back to the office full time including the flexibility that the hybrid model provides and increased productivity at home, Black professionals have very specific additional reasons for not wanting to go back. According to Future Forum those reasons include a lack of belonging in their office, having to "code switch" (when you adjust the way you talk and behave to fit in) and discrimination and microaggressions. For many Black folks working remote has eliminated much of this.
What Can Companies Do? The obvious answer would be to just let everyone keep working remotely. While this is one solution it definitely ain't the only one that employers should be looking at. Companies need to address the issue of belonging and inclusivity within their four walls. That means creating workplace environments and offices that Black folks feel like they're welcomed in. How companies can do this is by checking in regularly with Black employees to understand what is and isn't working within the office from a belonging and inclusion perspective and actioning the feedback quickly. Hiring more Black folks is another thing that companies should be doing (just as general practice). Often times most companies are largely homogenous environments where Black folks feel like they need to code switch because there's no one else around that looks like them or has experienced what they have. Companies can address this by hiring more Black people and demonstrating that they're really committed to creating environments where diversity is celebrated instead of environments where people feel like they have to hide who they are.
This pandemic has been tough on everybody and it's also revealed an opportunity for companies to reimagine their workplace, the workstyle and more thorny issues like issues of race and belonging. Companies shouldn't be thinking about simply returning to the office but returning to better.
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McKinsey & Co Study: The Black Wealth Gap and How to to Close It
As we have written about in past issues of this newsletter, the United States has a long and well-documented history of discrimination against Black folks across the board including in areas that are critical to building wealth like employment, banking and housing. This history of discrimination has created a big gap between Black and white America totaling $220 billion annually according to a new report from management consulting firm McKinsey Global Institute.
What The Numbers Are Saying
The numbers from McKinsey can best be described in a word that I use often in this newsletter that begins with a 'T' and ends with a 'G' (yes, trifling. The word is trifling). According to the report, Black folks make up 12.9% of the labor force in the United States but earn only 9.6% of total wages in the country. SMH. Black workers also earn on average 30% or $10,000 less than their white counterparts. The median Black household in the United States has a net worth of $24,000 versus $188,000 for white households (one eighth the net worth). Another estimated 19% of Black households (3.5 million) have a negative net worth compared to 8% of white households and an additional 4.3 million have a net worth of less than $10,000. The gap also extends to` Black entrepreneurs who on average launch their businesses with $35,000 in start up capital and loans compared to $107,000 for white entrepreneurs.
Causes for the Gap
There is a whole bunch of reasons for the gap that we're seeing today including concentration of Black folks in certain industries, lack of representation in higher paying professions, lack of upward mobility in corporate jobs and a double combination of sexism and racism for Black women in the workplace.
Nearly half of Black workers are employed in lower paying service roles across a few industries including healthcare, food service and retail. More than 35% of nursing assistants in the United States are Black with many being hired as independent contractors which denies them employer benefits and protections. The median wage is $23,000. Nearly one-third of security guards and school bus drivers are Black with a median wage of $26,000 and $26,500 respectively and little clear pathway to advancement. Even more alarming, 42% of Black folks are employed in jobs that are at risk of being disrupted by automation by 2030 which means the need to learn new skills for a new career are here.
While Black folks make up 13% of the labor force, they're vastly underrepresented in higher-paying jobs. Only 5% of U.S. physicians are Black and 4.5% of software developers are Black according to McKinsey. The lack of access to business networks, formal internship programs, high attrition rates, lack of professional sponsorship, allyship and a general lack of trust among Black folks in predominantly white companies also play a big role in the lack of Black presence and mobility in higher-paying jobs at U.S. companies.
It's not just where Black folks are represented in the workforce that's an issue but also the pay gap between them and their white counterparts in these categories. The pay gap accounts for $96 billion of the total wealth gap between Black and white people. Black people who do advance into managerial and leadership positions are also paid less than their white counterparts in the same role. That's odee trifling.
How Can We Fix It?
In order to close this gap Black folks need greater parity in higher paying jobs relative to their representation in the population and the pay gap needs to be eliminated where Black and white people are doing the same job. According to McKinsey, that can be achieved by companies diversifying hiring and promotions while improving the workplace experience. Companies also need to step up and start not only moving out of their hiring bubble and looking far and wide for talent but also focus less on credentials and more on aptitude and skills. Attrition keep Black folks from sticking around long enough to be considered for promotion, which means that companies need to start really examining what the workplace experience is like for Black employees who often face discrimination in their day-to-day work lives. There is a 27% gap between Black and white employees who report feeling accepted at work.
Investing in curriculums that lead to higher paying jobs is another area that can address this issue. Today only 6% of computer science and engineering students are Black. Companies can step up here by sponsoring STEM programs in K-12 education and at historically Black colleges (HBCU) to encourage Black students to pursue higher-paying career paths.
Besides throwing the whole system away and starting over, there are concrete actions that employers can take today to help close the racial wealth gap if they want to. A lot of companies have been talking the big talk when it comes to issues of racial equity recently and there is no bigger opportunity to address the racial equity problem than through closing financial disparities. Closing the wealth gap will not only be a big win for the U.S. economy but also a big W for the companies that take the issue head on.
Tweet Of The Week
Black Twitter is uplifting, educational, entertaining and always on point. Enjoy our favorite Tweet of the week below and make sure to take care of yourselves today and everyday, fam.
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