As conversations regarding diversity, equity and inclusion continue to deepen and evolve, the topics of financial equity and inclusion have come to the forefront. A cornerstone of creating an equitable society is ensuring that individuals have equal access to financial services and professional opportunities, and in turn, to wealth.
These are three important steps that need to be taken, both in the workplace and beyond, in order to bridge these gaps and create a more financially equitable society:
- Closing generational wealth gaps
There is a meaningful and well-documented wealth gap in America between Black and white families. In 2016, a study conducted by the Federal Reserve revealed that the median family wealth for a white family was $171,000, while the median family wealth for a Black family was $17,600. This wealth gap is caused by an inability to affordably save, invest and insure, which puts many Black families at a disadvantage when trying to build economic wealth. As time goes on and Black families continue to feel the effects of exclusionary practices, this wealth gap is perpetuated through generations, creating a greater socio-economic divide.
Closing this generational wealth gap requires foundational and systemic changes. Banks need to expand their branches and offerings to provide better service to people of color and people in low-income communities. Hiring more people of color in the financial sector can also help create more inclusive loan practices and, therefore, begin to tip the scales toward financial equity. New technologies such as on-demand pay can also help families break the paycheck-to-paycheck cycle and begin to save comfortably.
- Addressing gender pay equity
People of all genders receiving equal pay for equal quality and quantity of work sounds like it would be a given. However, pay inequality has been and continues to be a huge issue for women, especially women of color. There are many factors that contribute to the gender pay gap, including the cultural expectation for women to be fully responsible for the unpaid labor of childcare and housework. There also still are pervasive ideologies that “women’s work,” such as teaching, is not as valuable as work in other professional sectors. Also, gender-based hiring discrimination is unfortunately still a reality in today’s world.
There are many things that can be done to help address this issue. Companies can implement paid parental leave for parents of all genders, which helps create a culture where all employees are seen as equally responsible for childcare. Practices such as this normalize all parents leaving to pick up sick children and prioritizing work-life balance in order to raise them, which helps “level the playing field” within the workplace. Companies can also conduct annual reviews where they compare employee salaries by gender and work to close any gaps in those numbers. Lastly, addressing unconscious biases via inclusive language in job descriptions, diverse hiring teams, and other best practices in hiring to allow women and underrepresented groups to move into a variety of opportunities.
- Creating a culture of belonging in the workplace
For decades now, diversity, equity and inclusion have been at the forefront of many companies’ HR strategies. It’s a known fact that more diversity of thought leads to more creative ideas and ultimately more revenue. However, establishing and maintaining a diverse staff has nuances that many companies may be overlooking. This is because retaining diverse talent is impossible without truly creating a culture of belonging. Giving people of color, LGBTQ people and other minorities a proverbial “seat at the table” is only a temporary solution unless those individuals feel comfortable and empowered in their roles. If they are battling racism, cultural misunderstanding and discrimination from peers, then those individuals do not truly have equity to keep climbing the corporate ladder. This adds a heavy burden to their work life that others in the same positions do not experience, thereby adding yet another obstacle to professional success.
To combat this problem, companies need to ensure that they’re not indulging in performative activism, but truly living their values every day. Supporting the creation and continuation of Employee Resource Groups (ERGs) can help employees feel more supported and to know that they are not alone in their unique challenges and experiences, which helps reduce turnover rates. Encouraging honest and open dialogue from minority employees about how the company can become more inclusive is also extremely valuable. Perhaps the most important factor to consider here is education, both for yourself and your employees. The more aware individuals are of their unconscious biases, the more quickly they can begin to dismantle them and become a part of the solution.
We all have an important role to play in creating a more financially inclusive society. It starts as simply as listening to and having empathy for others whose experiences may differ from our own. By deepening our understanding of financial inequity, creating an open dialogue about this issue and working toward systemic and sustainable financial inclusion, each of us can become a part of the solution.