Corporate America is costing the country’s economy trillions by not paying black workers the same as white workers. And when you factor in the gap in education, house, and more, the cost to the economy grows to an astronomical $16 trillion.
“Black workers continue to face significant gaps in the labor market when it comes to promotion, pay and opportunity, costing the U.S. economy trillions of dollars.
If the Black wage, education, housing and investing gaps had been closed 20 years ago, it would have added an estimated $16 trillion to the economy, according to a report by Citi, with the Black pay gap alone accounting for $2.7 trillion.
Today, Black workers are overrepresented in low-wage entry-level jobs and underrepresented in senior leader and executive roles. In the U.S. private sector, Black workers make up 12% of the entry-level workforce and just 7% of the managerial workforce, according to McKinsey & Company.
The higher you go, the fewer Black professionals you see. At the senior manager and VP level, Black workers make up just 5% of the workforce, and at the SVP level, just 4%. At the very top, only around 1% of Fortune 500 CEO spots are held by Black leaders.
If the current trajectory continues, McKinsey & Company estimates that it could take 95 years before Black employees reach parity at all levels in the private sector.
‘Black workers, on average, are not being hired, promoted or paid according to what would signal their level of productivity based on their experience or their education,’ Valerie Wilson, director of the Economic Policy Institute’s program on race, ethnicity and the economy, tells CNBC Make It. And ‘it absolutely impacts everything. It impacts your family’s economic security.’
On average, Black men are paid just $0.71 for every dollar paid to white men, according to EPI. Black women, who face both gender and racial barriers, are paid just $0.63 for every dollar paid to white men. Over the course of a 40-year career, the National Women’s Law Center estimates that Black women stand to lose close to $1 million due to this disparity.”
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