Why ‘Growing Private Sector Jobs and Wages’ will not address racial inequity

May 2, 2018
By Temi F. Bennett, Esq.

The idea that we can address racial inequities by “growing private-sector jobs and wages” [1] is a fallacy, one offered in response to Montgomery County’s recent passing of a racial equity resolution. Fallacy aside, Montgomery County’s economy has been stagnant for the past decade. A report released by Sage Policy Group found that the county, with a population of about 1 million people, had only six more businesses in 2016 than it had in 2011, compared with a growth of 6,300 new businesses in the state overall.[2] It is true that the county can do better to support economic growth. However, policymakers in the county are beginning to understand that jobs alone, even if they were available, are not sufficient to address the historical, institutional and structural forms of racism that created and perpetuate racial inequities in the county. Tools, such as a racial equity impact assessment, are a necessary first step.

Consumer Health Foundation is a member of the DC Initiative on Racial Equity and Local Governments. This past December, we co-sponsored a racial equity training attended by policymakers across the region, including policymakers and their staff from Montgomery County. We will continue to aid and support the steps they are taking in their efforts to prioritize racial equity. We believe that the only way to address racial equity is to do so directly.

“Suffocating Black Wealth,” an OtherWords cartoon by Khalil Bendib. OtherWords.org

A recent study led by researchers at Stanford, Harvard, and the Census Bureau found that Black boys, even if they were born to high-income parents, are worse off economically in adulthood than white boys who are born into poverty.[3] Gaps persisted even when Black and white boys grew up in families with the same income and similar family structures, education and levels of accumulated wealth.[4] According to the New York Times article that reported on the study’s results, the researchers stated that this gap cannot be explained by class. It is about racism and the way society views Black boys and men.[5]

In addition, despite a federal law prohibiting pay discrimination, wage gaps persist in nearly every industry.  White women are paid 78 cents for every dollar white men earn.[6] For Black women, it’s 63 cents.[7]  Low pay at an early job can affect salary at a later one, as employers commonly base their offer to a prospective employee on previous pay. An analysis done by the National Women’s Law Center found that a Black woman starting her career today will lose an average of $877,480 over her 40-year career, relative to a white man.[8] In Washington, DC, that number increases to $1 million over the course of a Black woman’s career.[9] Lost wages due to race-based wage gaps means people of color have less money to spend on goods and services and save and invest for the future. As a result, their families, local businesses, and the broader economy suffer.

Inequities also abound closer to home. An Urban Institute report that we commissioned in partnership with the Meyer Foundation found that people of color in District 5 of Montgomery County, where Silver Spring and Takoma Park are located, are less likely to have graduated high school, have enrolled in college, have a well-paying job, or own a home compared to their white counterparts.[10] The institutions and polices that have systematically disadvantaged communities of color and have led to these inequities must be acknowledged and changed directly. Only then will all of our communities thrive.

[1] Aware of disparities, Montgomery County wants to weigh ‘equity’ in making policy decision, The Washington Post, (April 24, 2018) https://www.washingtonpost.com/local/md-politics/aware-of-disparities-montgomery-county-wants-to-weigh-equity-in-making-policy-decisions/2018/04/24/b2fe518c-47d0-11e8-8b5a-3b1697adcc2a_story.html?noredirect=on&utm_term=.0bdf74bf689d.
[2] The Coming Storm: How Years of Economic Underperformance are Catching up with Montgomery County, Sage Policy Group (April 2018), https://www.empowermontgomery.com/wp-content/uploads/2018/04/Montgomery_County_EM_Final.pdf.
[3] Race and Economic Opportunity in the United States: An Intergenerational Perspective, The Equality of Opportunity Project (March 2018), www.equality-of-opportunity.org/assets/documents/race_paper.pdf.
[4] Id.
[5] Extensive Data Shows Punishing Reach of Racism for Black boys, New York Times (March 19, 2018), https://www.nytimes.com/interactive/2018/03/19/upshot/race-class-white-and-black-men.html.
[6] The Simple Truth about the Gender Pay Gap, American Association of University Women (March 2018)  http://www.aauw.org/research/the-simple-truth-about-the-gender-pay-gap/.
[7] Id.
[8] The Lifetime Wage Gap, State by State, National Women’s Law Center (April 4, 2018), https://nwlc.org/resources/the-lifetime-wage-gap-state-by-state/.
[9] Id.
[10] Racial Inequities in Montgomery County, Urban Institute  (December 2017), https://www.urban.org/sites/default/files/publication/95386/2017.12.28_montgomery_county_finalized_1.pdf.

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