The racial wealth gap is a persistent problem in American society. For roughly $7 of wealth held by white families, Black families have $1. The homeownership rate for Black Americans is 44%, compared to 72.7% for White Americans. Black Americans have the highest denial rate when applying for a mortgage loan. Black Americans are twice as likely to be unbanked as their White counterparts.

Of course, there is no silver bullet to a more equitable society or workplace, but organizations are uniquely poised to make a real difference, by making seismic shifts to company-wide culture. To really be effective, these shifts will need to affect every level of the business from hiring and promotion cycles, to benefits education and financial opportunities.

In this blog, we’ll share 5 key principles that can create a strong foundation, built on equality, for any organization. 

Representation  

To begin shrinking the wealth gap in our country, we need to zero in on the glaring problem of representation. In 2023, Black Fortune 500 CEOs hit a “record” high –  eight total, up from five in 2015. How can you work to improve representation in your organization? An initial step could be to examine performance reviews. Is one group disproportionately receiving higher or lower scores? This is a good way to examine potential bias in your organization. 

Compensation and Benefits

Statistics show that black families have less access to employer-paid retirement and other benefits plans because they are overrepresented in lower-wage jobs. Who is eligible for benefits in your organization? How are you supporting your warehouse or line workers? To make way for advancement and create equitable opportunities, it’s essential to invest in capacity-building programs for your lowest-paid employees.

Financial Literacy 

In adults, Black Americans’ financial literacy scores are 21% lower than those of their white counterparts. This lack of knowledge contributes to lower savings rates, higher debt, lower retirement plan participation, and less comfort with investing. How can you invest in equal educational opportunities for all employees? Consider providing financial education resources in the workplace through classes, or one-on-one meetings with an unbiased financial advisor.

Unbiased Guidance

In a recent survey, Black Americans were far and away the most likely to want to grow and protect their wealth, and not leave debt for the next generation. What’s more, they were the most dissatisfied with their financial providers and the most likely to say they wanted to spend more on financial services. How can you connect your employees with the guidance they need? Consider offering a comprehensive financial education program to provide them with unbiased advice.

Products 

Black Americans are more likely to be “credit invisible” which means they do not have a credit score. Poor credit can limit access to better rates. This means that some black families may have no choice but to take a payday loan to meet a short-term need, even if it means paying interest rates of 400% or more. What products can you offer your employees to protect them from financial compromise? Employers can provide EWA through a partner so they can get the urgent cash they need without accruing bad debt.

Want more practical tips for combating wealth inequality? Read our full article here.