How Business Leaders Are Building an Inclusive Economy
Through focused, continuous efforts, business leaders can build a more inclusive economy and close the racial wealth gap.
Air Date: June 23, 2021
Moderator: Curtis Dubay, Senior Economist, U.S. Chamber of Commerce
Featured Guests: Dr. Ira Kalish, Chief Economist, Deloitte, Dr. Valerie Wilson, Director, Program on Race, Ethnicity, and the Economy, Economic Policy Institute, Dr. Ana Hernández Kent, Senior Researcher, Institute for Economic Equity, Federal Reserve Bank of St. Louis
While the business world has made progress regarding diversity and inclusion over the last few years, it still has a long way to go.
At the 2021 U.S Chamber of Commerce National Summit on Equality of Opportunity, leadership and economic experts explained how business leaders can close the racial wealth gap and build a more inclusive economy.
Business Leaders Must Address Discriminatory Behavior and Decisions in the Workplace
Dr. Ira Kalish, chief economist at Deloitte, cited a common issue that happens in the business world: most people who make discriminatory decisions do not have bad intentions, but are ignorant to the biases they carry.
“The reality is, people make decisions that have a discriminatory effect,” he said.
Many people are actually blind to how the Black community is treated in society, including by financial institutions and employers. Dr. Kalish stressed there are two things we can do to address discriminatory behavior: enforcing existing laws against it and changing the attitudes of people in society.
“I think that it’s incumbent on us in the business community to require training of our people … to better understand what actually happens,” said Dr. Kalish. “That’s the only way we’re going to get past this.”
Employers Must Work to Close the Unemployment and Pay Gap for Black Workers
According to Dr. Valerie Wilson, director of Economic Policy Institute’s Program on Race, Ethnicity, and the Economy, a vast majority of income is labor income.
“While income is not wealth, inadequate income is a barrier to wealth building,” she said. “There are large and persistent racial disparities in employment and pay that are actually defining features of the U.S. labor market.”
She noted that Black workers are typically twice as likely to be unemployed as white workers and among those who are employed, Black workers faced significant pay disparities when compared to white workers. This was true at nearly every level of education.
“The unemployment gap is not simply a skills gap,” Dr. Wilson continued. “Similarly, pay gaps are not simply skills gaps.”
To address these issues, Dr. Wilson recommended businesses implement pay equity policies, like internal evaluation of employee pay disparities and pay transparency policies. Additionally, they can choose not to ask about salary history in the hiring process. Business leaders can also invest in occupational desegregation, which might involve adopting recruitment efforts that seek a diverse pool of applicants for openings at every level, investing in the retention of workers of color and being transparent about opportunities for advancement for minority workers.
Professionals Must Continue Their Progressive Efforts to Produce an Inclusive Economy
Though there is still much work to be done, our country has been working toward a more inclusive economy, and progress has been made in several areas.
“In the past year and a half or so, it’s become abundantly clear … that we do not have racial economic equity in this country,” said Dr. Ana Hernández Kent, senior researcher at the Institute for Economic Equity. “That being said, there has been some progress made, a lot of support behind many promising ideas.”
Some examples of progressive solutions created are affordable childcare, child development accounts, 529 plans for future education, as well as retirement funds for kids, started at their birth.
“We need to continue the momentum; continue these conversations to produce actionable results because ultimately, if we do, we’ll be producing a more prosperous economy for everyone.”