Corporate America Owes Black Women A Lot. We All Do.

March 31, 2020

Why This Matters is a series from Roosevelt staff connecting our individual work—from papers to reports and everything in between—to our broader vision of creating a better, more equitable economic and political system. This series will give readers the top takeaways from our latest writing and thinking, with a focus on why they matter as we redefine the rules that guide our social and economic realities.

Janelle Jones, the managing director of policy and research at Groundwork Collaborative, has coined what she calls a personal motto and economic ideology: “Black women best.” She means that if Black women—who, since our nation’s founding, have been the most disadvantaged by the rules that structure our society—can one day thrive in the economy, then it must finally be working for everyone.

A new Roosevelt report by Michelle Holder, assistant professor of economics at John Jay College, adds to the chorus of research showing that today’s economy isn’t working for Black women—and is actually robbing them of economic security.

This was true before the COVID-19 crisis began, and it’s especially true now—given that tens of millions of people are out of work. “We know from the last recession that the Black workers are often the first fired,” notes Rebecca Dixon, executive director of the National Employment Law Project. And NBC’s Janelle Ross warns that “people of color make up a disproportionate share of workers in the industries where layoffs are the most intense and only expected to get worse.” Imagine if Black women had more of what they earned to rely on during this time of economic stress. Where’s their unconditional bailout?

When it comes to work, Black women are confronted with both the gender wage gap and the racial wage gapIn measuring what she has dubbed the “double gap,” Holder estimates that these two trends in pay discrimination cost Black women—and saved (already profitable) US companies—$50 billion in involuntarily forfeited wages in 2017 alone. “Since profit is equal to revenue [minus] expenditures, the implication is that the double gap faced by African American women has been beneficial for corporate profits,” she notes.

We are living in an era of record-high corporate profits, and the growth in worker productivity over time deserves a lot of credit. The problem: Worker pay has barely budged—for decades. “Since 1979, pay and productivity have diverged,” shows the Economic Policy Institute. In fact, productivity rose six times more than pay from 1979 to 2018. “This means that although Americans are working more productively than ever, the fruits of their labors have primarily accrued to those at the top and to corporate profits, especially in recent years.” Guided by a shareholder-first mentality, this is the result of corporate executives who are encouraged to cut costs and boost revenue, choosing to neglect the very people, including workers—of all races—who deserve a greater share of and more of a say over the value they help create.

Though Black women have historically had the highest national workforce participation rate “among major female demographic groups in the US,” as Holder notes, centuries of exploitation and crowding into low-wage occupations have left them particularly vulnerable to labor market discrimination, outsized employer power, and corporate attempts to hoard profits—all of which carry consequences that manifest well beyond the workplace.

“The findings from [my] research suggest that African American women’s labor power is largely undercompensated by employers, with tangible implications for income and asset-building in the Black community,” writes Holder. For TIME, my Roosevelt colleague Andrea Flynn elaborates: “Nationally, Black women earn 61 cents for every dollar earned by white men . . . These wage disparities take an extraordinary toll over the course of an individual’s life, and one 2017 study shows that over a 40-year career, women overall lose $418,800 as a result of the wage gap, with women of color losing almost $870,000.”

Ultimately, pay inequality is very real for far too many, and corporations are choosing to be complicit. Holder points to potential solutions, including rethinking salary and promotion negotiations, but the reality is that Black women can’t do this alone.

Like most of our problems today, the double gap is a structural issue that requires a rebalance of power. Expecting US companies to pay workers, especially Black women, what they’re worth ignores the reality of who our economy is working for and who it is working against. 

Until Black women are made whole, none of us are.