For millions of American workers, the COVID-19 pandemic has led to reduced wages, lost jobs, and imperiled livelihoods. But these economic pains have not been shouldered equally. More than 60 percent of Latinx households and nearly 60 percent of Black households have had at least one person lose income since March 13, compared with only 45 percent of white households.
“The pandemic has exposed and exacerbated the challenges that we already knew workers across the nation were facing,” said Lisa Hamilton, president and chief executive officer of the Annie E. Casey Foundation, in her opening remarks at a recent WorkRise panel discussing racial inequity and injustice in the labor market. Black and Latinx workers have faced barriers to opportunity because of discriminatory practices, Hamilton added, resulting in lower rates of wealth and homeownership that have left them with thin or nonexistent safety nets to weather unexpected crises, like the pandemic.
As COVID-19 cases continue to increase nationwide amid halting economic progress, understanding the causes of racial disparities and identifying solutions to create more equitable opportunities in the labor market are paramount to ensuring an equitable recovery. The panel, the second in a week-long series of conversations launching WorkRise, brought together experts to discuss how to achieve this goal and consider viewpoints from policy, worker, and employer perspectives.
Black and Latinx workers are devalued because of “the commodification of their identity”
American capitalism was founded on the pursuit of profit, Sarah Keh, vice president of inclusive solutions at Prudential Financial, said during the panel. In theory, employers and employees should both enjoy the fruits of profit, but “shareholder capitalism and the focus on profits has limited employers’ desire to invest in the employees.” She added that in prioritizing shareholder profits, workers are often devalued and seen as expendable.
For Black and Latinx workers, a system of “racial capitalism” further devalues their work and their humanity, according to Tanya Wallace-Gobern, executive director of the National Black Worker Center Project. “Racial capitalism relies upon and reinforces the commodification of a racial identity, thereby degrading that identity by reducing it to another thing to be bought and sold,” she said. “When race is viewed as a commodity, white people are encouraged to think of nonwhite people in terms of their instrumental value and not their intrinsic worth.”
When race becomes another product to consume, cross-racial interactions and understanding are cheapened, Wallace-Gobern said, leading to corporate cultures and practices that fail to support workers of color or exclude them altogether. By commodifying race, employers entrench long-standing ideas of who belongs in which jobs and exacerbate existing occupational segregation.
Although race-neutral hiring policies seek to counteract this segregation, many actually act as de facto discrimination, Amanda Cage, president and chief executive officer of the National Fund for Workforce Solutions, said. For example, requiring job applicants to have a bachelor’s degree automatically eliminates more than 70 percent of Black applicants and more than 80 percent of Latinx applicants from consideration, she said.
But fixing occupational segregation will take more than closing education gaps, Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, said. “Many look at wage inequality by race and ethnicity on one hand and more education and training leading to higher wages on average on the other hand, and think that more education for Black and Latinx people can solve inequality by race and ethnicity,” she said. “But when you look deeper, you can see that Black and Latinx workers have lower earnings than white workers at all levels of education and training, so even if we fully close education gaps, we would still have huge disparities.”
What policymakers and employers can do to support Black and Latinx workers
As states and businesses continue to respond to the pandemic, policymakers and employers can reevaluate policies and practices to better support the workers of color who have borne the brunt of the pandemic’s effects. The panel discussion highlighted three solutions, and identified some potential pitfalls, to create more equitable opportunities in the labor market.
- Increase baseline job quality. “Some career ladder rungs are just broken,” Cage said of the current labor market, explaining that the focus should move past accepting low-quality jobs with the intent to train upward and toward increasing job quality. At present, the basic fundamentals of livable wages and stable working conditions are not the norm, especially for frontline workers. Incentivizing companies to provide jobs with equitable benefits, wages, and opportunity for growth would provide much-needed stability for workers, especially workers of color, Keh explained.
- Support unionization protections and transferring power to workers. For Shierholz, boosting unionization is the most important policy goal for dismantling racial inequality. Union workers make 11.2 percent more than nonunion workers, she said, with Black union workers making 13.7 percent more than nonunionized Black workers. The decline of unionization and increase in employer power at the expense of worker power has diminished labor protections, expanding the Black-white wage gap. But a push to boost unionization must come with a “unified labor movement” and mass organizing that transfers power to workers no matter the job or industry, Wallace-Gobern said.
- Disaggregate data by race, ethnicity, and gender to better target policies. For companies to know how to improve job quality and for workers to have evidence to support their organizing, more and better disaggregated data are necessary. With data disaggregated by race, ethnicity, and gender, companies can better evaluate if they are hitting their performance metrics equally for all people, and policymakers can have data to target solutions. These data should be made public by companies, Keh added, because employers, workers, and policymakers won’t know where inequities lie if data are not released.
With these solutions, employers and policymakers can begin to dismantle the persistent racial inequities in workplaces nationwide and enable equitable opportunity for all workers.
Click here to watch the full panel.