Community Creating Equitable Pathways to Income Growth

by Sherrell Dorsey | March 07, 2022

In the early 1960s, opportunity knocked for my grandfather Jerry when he was recruited for a job as an electronic technician engineer at an aircraft company in Seattle, WA.

An army veteran who served two years in the Korean War, Jerry was eligible for the GI Bill, which provided various benefits such as college tuition, low-interest mortgages and job training for eligible veterans.

Following his service, Jerry enrolled in an electronics certificate from a vocational program, which expanded his job prospects. The GI Bill served as a gateway for both an education and a home, setting him, and eventually his family, on a trajectory toward economic stability.

But Jerry’s experience as a Black vet was the exception, not the rule. In fact, when the GI Bill was first introduced in 1944 following World War II, it benefited white veterans but “it was structured in a way that ultimately shut doors for the 1.2 million Black veterans who had bravely served their country during World War II, in segregated ranks,” according to a History.com article. A denial of benefits, the same article reports, which only widened the generational wealth gap between Black and white Americans.

Although equitable pathways to create income growth (which, in turn, contributes to generational wealth) are expanding, it is still not wide open to all. This is evident in this generation as my cousins and I manage rising housing costs, student loan debt and a struggling job market — despite the accomplishments our grandfather proudly touts and helped facilitate.

Having a better understanding of the income gap historically for Black Americans is one of many steps needed to remove obstacles and further narrow inequities for future generations.

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Although equitable pathways to create income growth (which, in turn, contributes to generational wealth) are expanding, it is still not wide open to all.
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Trainings, and protections, that pay off

Similar to benefits provided by the GI Bill, one approach to increasing income is a focus on upskilling and retraining Black workers who occupy low-wage jobs. Encouraging degrees or providing access to vocational programs in high-paid occupations in STEM fields is helping Black workers narrow the compensation gap and increase workplace conditions overall.

Brooklyn, NY-based NPower is one such organization with a mission to launch the technology and digital careers of military veterans and young adults from underserved communities. In partnership with Citi Foundation, NPower created the 40 by 22 Initiative, which aims to increase the representation of young women of color in tech fields in a handful of states to 40% in 2022.

In addition to training and upskilling, more equitable recruitment practices must also take root. One particularly effective approach outlined in the Citi Global Perspectives & Solutions report on Closing the Racial Inequality Gaps is to implement salary history bans, preventing employers from inquiring about historical salaries. According to HR Dive, 19 U.S. states have banned this question from the application process.

In a 2020 study out of Boston University School of Law, researchers found that salary history bans (SHBs) are particularly beneficial for women and non-white workers; their analysis indicated that pay increases for these workers when changing jobs in states with SHBs were 6.4% (for women) and 7.7% (for non-whites) greater in comparison to wage increases among similar job-changers in states with no ban.

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Underemployed, underpaid and less job-secure

“A major component of the wealth gap comes from the income gap,” explains Dr. William Spriggs, a Howard University economics professor and chief economist at America’s Labor Unions. “A lot of people look at the income gap, which isn't as big as the wealth gap. But then they forget that that gets compounded over your entire work life, and if you multiply that intergenerationally and compound it, then you get where we are today.”

Addressing factors from the current minimum wage to how Black Americans are held back from high-paying jobs remains complex, and necessary, in tackling disparities. But Dr. Spriggs points to another consequential issue: ensuring that Black workers, once they get into high-paying jobs, are treated well and stay in their roles through opportunities to advance.

“A lot of people say, ‘Well, if more Blacks were computer programmers…’ But a lot of Black people are computer programmers,” Dr. Spriggs notes. “In fact, that's what makes up the Black middle class; Black computer programmers are highly concentrated in work in government. But the gap between Black and white computer programmers is huge when you look at pay.”

In its 2017 Tech Leavers Study, the Kapor Institute found that workers from underrepresented groups leave tech due to a poor workplace culture, where nearly one quarter of underrepresented men and women of color surveyed experienced stereotyping and other forms of discrimination.

This has a particularly detrimental effect on Black women workers. Citing greater degrees of discrimination and getting passed over for promotions in the Kapor study, Black women in high-wage careers forfeit economic gains when industry-culture practices force them out or don’t pay them at the same rate as their white male counterparts.

Double Gap for Black women

However, simply negotiating higher salaries or having the right networks or credentials won’t solve the challenge of Black women being undervalued, argues Dr. Michelle Holder, assistant professor of economics at John Jay College of Criminal Justice. 

In a 2020 report for the Roosevelt Institute, Dr. Holder found that Black women involuntarily forfeited wages upwards of $50 billion in 2017 alone. “Black women are subject to at least two types of discrimination in wages — racial and gender,” Dr. Holder writes, identifying this as the “Double Gap.”

Dr. Holder also writes that Black women are crowded into low-wage jobs (work that has traditionally lacked labor protections, paid maternity leave, health insurance or paid sick leave), a by-product of the history of limited jobs offered to Black women.

For every $1 dollar a white man is paid in the workforce, Black women are paid 63 cents, according to the Institute for Women’s Policy Research. This adds up to over a million dollars in lost income over a Black woman’s lifetime compared to that of a white man.

This economic loss affects Black families and their potential to accumulate generational wealth, as four in five Black mothers are the primary breadwinners for their families.

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Policy and action

My grandfather hangs the framed college degrees of his children and grandchildren on the wall of his living room. Though he never earned a college degree, his pathway into a higher-paid job — access to veteran resources to enable his ability to purchase a home for his family — was essential to advancing generational mobility.

Policy and action that address inequality and the reality of the income and generational wealth gap for Black Americans need to be a priority for enabling progress. Progress, perhaps, that would lead to more success stories like my grandfather’s becoming the rule and not the exception.

Managing Money Career Mindfulness
Sherrell Dorsey

is founder, and CEO of The Plug, the go-to business media and insights platform examining the Black innovation economy. You can view more of her work at tpinsights.com.

The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article.