How the Racial Wealth Gap and Lack of Benefits Affects the Black Communities in the US
The racial wealth gap is a very real issue, stemming from deeply-rooted racist business practices that unfortunately still exist to this day. Even with equal education backgrounds, black individuals face lower rates of employment and lesser pay in the same jobs as their white counterparts. This gap, in turn, leads to a gap in benefits that affect the wellbeing and futures of workers.
Access to medical and retirement benefits are important aspects that many people look for when applying to jobs. Especially during a global pandemic, health care, including mental health care services, is more important than ever. However, there is a noticeable gap between the access to these benefits between white and black individuals. Unfortunately, white workers are generally more likely to hold positions that are higher-paying and offer more generous benefits in comparison to other races.
Systemic racism is so firmly ingrained into society that it can go unnoticed by those whom it does not affect, especially in business settings. The disproportionate statistics in wealth and benefits between races leads to a much higher risk of economic insecurity following retirement for black individuals in comparison to white individuals.
Less health care benefits means that individuals have lower rates of consistent care, and may not even have an established primary care provider. Furthermore, access to preventative care and prescription medications is extremely lower, leading individuals who do not have health care benefits through employment to experience more infections and chronic illnesses that go untreated. Black and Hispanic communities have been disproportionately affected by COVID-19 infections and deaths because they are less likely to have access to adequate health care.
The COVID-19 pandemic not only caused issues for people without substantial health care, it has caused millions of Americans to become unemployed, therefore losing any existing benefits from their jobs. The unemployment rate has risen astronomically in the United States since the start of the pandemic, though it was about twice as high for black citizens in contrast to the unemployment rate for white citizens. The staggering number of job losses means that an even greater number of individuals have little to no access to benefits that come along with a job.
Unequal pay and insufficient access to retirement benefits are additional challenges that black employees face, causing the racial retirement wealth gap to remain existent. White households are up to five times more likely to hold retirement savings when compared to black households. On average, black workers make 15 percent less than white counterparts, therefore, they already have less money available to put into savings for retirement. In addition to these challenges there are also financial education disparities between races.
The economic inequalities between black and white Americans are a huge factor in the racial retirement wealth gap. Besides the fact that black individuals face lower lifetime earnings overall, they also have less investment and savings building opportunities and less home equity. Encouraging earning college degrees and buying homes to increase earning and wealth are bandaid ideas to patch up, rather than solve, a much larger problem. Initiatives that will help boost the building of assets for black Americans, such as emergency savings incentives, increased access to capital for businesses that are black-owned, and student debt forgiveness programs are a much better place to start for narrowing the wealth gap that has been allowed to grow much too large.
Employers can help to close the racial wealth gap by taking action to bring equal benefits to employees of all races. First of all, increasing the access to health care in order to create equal opportunities for everyone will tremendously benefit the workers who currently suffer from a lack of health care services. Families should not have to worry about whether or not they can afford to seek medical attention in the case of an emergency or illness. Mental health services fall beneath this category; while both white and black individuals generally experience the same levels of mental illness on average, those white individuals are more likely to benefit from easily accessible help for these issues.
Moreover, it is suggested that employers offer financial education to all of their employees in order to ensure that, regardless of race, each and every employee has an equal amount of knowledge over planning and saving for a financially stable future. Tracking participation in company 401(k) plans, as well as encouraging and assisting with enrollment in them, can drastically increase the number of employees who participate.
Institutionalized racism is the reason that black Americans are much more likely to experience financial insecurity after retirement and to have less access to both physical and mental health care services in comparison to white Americans. The black communities also make less money on average than white communities and have higher rates of unemployment, especially since the pandemic. A racial wealth gap exists, but by acknowledging it and taking action, employers and leaders across the country can work to close it.