Closing racial wage gap in just 20 occupations would boost millions of Black Americans

Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado November 3, 2009.  REUTERS/Rick Wilking

About 2 million Black Americans could climb into the middle class if they were given equal wages as their White co-workers, a new study from corporate consulting firm McKinsey estimates. 

Moving that many people to the middle class would benefit the larger U.S. economy as well as Black communities, said Shelley Stewart III, a McKinsey partner who led the study released Thursday. 

Newly minted middle-class families would have much less need for public assistance like food stamps and housing vouchers, thus reducing U.S. government spending on social service programs, Stewart said. Black households would earn an extra $220 billion in wages annually if the racial wealth gap were erased, and that in turn would generate more income for federal and state governments to tax, he added. 

Ultimately, if Black communities saw fairer levels of income "you would see a much more dynamic and robust local business environment," Stewart said. "You'd also see this snowball effect of wealth creation."

McKinsey's study peered through a crystal ball to envision how much stronger the economy would be if there were targeted moves from the private sector to bolster Black Americans in areas like the wage gap, entrepreneurship and wealth building. To unlock that stronger economy, employers behind more than 500 occupations would have to implement equal pay measures and banks would need to make a concentrated effort to lend to Black entrepreneurs, the McKinsey study concluded. 

"Daunting" but doable

A noteworthy wage gap between Black and White employees has persisted for years, Stewart and other researchers have said. A 2019 Payscale study, for instance, found that Black men earn 87 cents for every dollar a White man earns, even when both workers are equally qualified. Part of the disparity stems from Black Americans being historically excluded from high-paying roles and relegated to low-wage positions like janitor, store stocker, nursing assistant and school bus driver, according to the McKinsey study.

But enacting equal pay in just 20 types of jobs — including lawyer, software developer, accountant and construction manager — would close the racial wage gap by half, the study suggests. Other occupations where equal pay would make a serious dent, according to the study, are: 

  • marketing manager
  • sales manager
  • management analyst
  • engineer
  • professor
  • construction trades 
  • information system manager
  • retail supervisor
  • financial manager
  • middle school teacher
  • sales representative
  • operations manager
  • auditor
  • doctor
  • property manager
  • executive roles at government agencies

Completely erasing the wage gap would require long-term commitments from hundreds of thousands of employers, but that shouldn't stop one company from starting down that path, Stewart said. 

"While the problem has been long-standing and appears to be daunting, it's really a problem that can be solved by corporations and individuals in America adopting anti-racism as a core value," said Kevin Cohee, CEO of Black-owned OneUnited Bank in Boston who read the study and agreed with Stewart. 

Building a business

Aside from wages, corporations can also improve Black America by helping Black entrepreneurs increase the number of new businesses created, the McKinsey study found. 

However, if Black Americans were given loans and business coaching at the same rate as other ethnicities, their companies could generate $1.6 trillion in revenue and create 615,000 new Black firms, the McKinsey study estimated. New firms could continue to thrive, if larger companies added them to their diversity supplier lists, the study said. 

Building a successful business is crucial for Black Americans from low-income backgrounds because it potentially jumpstarts the bigger plan of creating wealth to pass on to future generations, said Darrin Williams, CEO of Black-owned Southern Bancorp of Arkadelphia, Arkansas. The McKinsey study offers a great road map for how to start that process, Williams said.

"Wealth building isn't just for the wealthy — it's for everyone," he said.

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How corporate America is approaching Juneteenth, the newest national holiday

The number of companies acknowledging Juneteenth is growing as corporate America seeks ways to deliver on diversity and inclusion pledges — although some question whether they’re truly fulfilling the spirit of those commitments.

President Joe Biden signed a law decreeing Juneteenth a national holiday on Thursday, adding the first new holiday to the federal calendar since President Ronald Reagan added Martin Luther King Jr. Day in 1983.

Black activists have advocated for this outcome for years, but the visibility and resonance of Juneteenth acquired a new sense of urgency last year following the death of George Floyd in Minneapolis. (Although Abraham Lincoln signed the Emancipation Proclamation in 1863, June 19, 1865 marks the day the Union Army reached the outer limits of the former Confederacy and told Black citizens that they we

June 19 falls on a Saturday this year, so many companies elected to recognize it on Friday, the 18th. Due to the holiday being added to the federal calendar so close to the date, the stock market remained open on Friday, but the number of companies acknowledging Juneteenth is growing as corporate America seeks ways to deliver on diversity and inclusion pledges — although some question whether they’re truly fulfilling the spirit of those commitments.

Jeffrey Sonnenfeld, associate dean at the Yale School of Management and CEO of the Yale Chief Executive Leadership Institute, said a growing number of companies are embracing the holiday. “Many companies have been talking about this and already built this in as a paid day off or ‘holiday pay’ work day,” he told NBC News via email. “Many others are putting plans to be ready for next year,” he added.

A San Francisco Bay-area collective called HellaCreative developed a database of nearly 700 companies and nonprofits recognizing Juneteenth. The list includes industries ranging from tech to media to consumer goods, including Adobe, McKinsey & Company, Netflix, Ralph Lauren and Spotify.

Despite these initiatives, a lot of employees are still skeptical of their company’s commitment to expanding diversity and combating racism. A survey of employees at big and medium-sized companies by software company Benevity found that while workers noticed companies making statements or pledges in support of racial diversity, the impression is that relatively few have followed through: Only about one in four noticed their employer dedicating company resources to address issues around diversity and racism, and roughly the same number said their company had donated money in support of these goals. In total, about two-thirds of survey respondents who identified as a racial or ethnic minority said they couldn’t say that their employer had fulfilled the commitments it had made.

“So far, employees have only seen leadership talk the talk, without walking the walk.”

“So far, they have only seen leadership talk the talk, without walking the walk,” the company said in a report summarizing the findings. “The top ways employees have actually seen company leadership doing so is through lip-service, such as through company-wide messages or speaking more about these topics.”

The Society for Human Resource Management also found that companies are still grappling with racism and discrimination. A recent employee survey found that 19 percent had experienced racial or ethnic discrimination within the past five years, and 14 percent said they had experienced it within the past year.

According to an SHRM survey of more than 1,000 HR professionals conducted earlier this year, more than one in four said that the biggest challenge they faced in 2021 was meeting the goals they had set around diversity, equity and inclusion. More than one in three, though, said getting greater traction towards their diversity, equity, and inclusion goals was the aspect about which they are most optimistic in 2021.

It makes good business sense for companies to prioritize racial equality: New research from SHRM found that it cost American employers $172 billion in turnover costs over the past five years due to employees leaving because of discrimination or unfair treatment based on their race. Benevity’s survey found that 37 percent of employees said they would be likely to quit if their company failed to prioritize addressing social and racial injustice.

Paul Argenti, a professor of corporate communication at the Tuck School of Business at Dartmouth College, said making the day a national holiday could give companies more motivation to observe the holiday. “I think this might be easier because it is now a national holiday,” he said. “Should be a no brainer.

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Amazon com : commits $150 million to empower Black entrepreneurs

Amazon's new Black Business Accelerator provides access to capital, business guidance, mentorship, and marketing support to help Black business owners succeed as sellers in Amazon's store.

Amazon is launching the Black Business Accelerator(BBA) to help build sustainable equity and growth for Black-owned businesses. The initiative-which explicitly targets barriers to access, opportunity, and advancement created by systemic racism across America-was created in partnership with our Black Employee Network and a coalition of strategic partners.

The BBA aims to drive economic equity for Black entrepreneurs, providing them with resources to thrive as entrepreneurs and business leaders. We are inviting Black business owners to explore and participate in this initiative, which provides financial support, business education and mentorship, and marketing and promotion of their brands and products as third-party sellers in our store.

Black entrepreneurs have less access to capital, mentorship, and growth opportunities. They are also significantly underrepresented in retail. According to the U.S. Census Bureau, only 6% of U.S. retail businesses have a Black owner-even though Black Americans represent 14% of the U.S. adult population.

Black-owned businesses have also been disproportionately impacted by the COVID-19 pandemic, according to the U.S. House Small Business Committee. This is why we are committing $150 million over the next four years to help thousands of Black entrepreneurs reach hundreds of millions of customers and become successful sellers on Amazon. Third-party sellers on Amazon-almost all of whom are small and medium-sized businesses-represent nearly 60% of product sales in our store and saw record sales growth in 2020. We would like more Black-owned businesses to enjoy this success.

Amazon's BBA will provide access to financial assistance, strategic business guidance and mentorship, and marketing and promotional support to help both current and aspiring Black small business owners grow their businesses and maximize the opportunities of selling on Amazon.

  • Financial assistance: BBA participants can access services and grants to help jump-start business growth and customer acquisition. Opportunities include Amazon credits and services valued at $3,900 that include free product imaging services and advertising credits. In addition, multiple teams across Amazon and our cloud computing division Amazon Web Services (AWS) are also excited to help fund an initial round of $10,000 cash grants in partnership with Hello Alice, an organization dedicated to helping entrepreneurs launch and grow their businesses. Applications for these grants will open on July 1, 2021, and be awarded on September 2, 2021. Additional details can be found at hialice.co/amazon.
  • Business education & mentorship: Participants can access a minimum of one year of free strategic advisory services to get the coaching, training, and insights needed to take their business to the next level. They can also connect with a dedicated network of business mentors, including Amazon experts and small business thought leaders, to continue to accelerate business growth.
  • Marketing & promotion: In the highly competitive retail space, it can be difficult for customers to find and shop products from Black-owned brands even though customers increasingly value shopping from diverse businesses. Through initiatives like the Black-owned business storefronts for both consumersand Amazon Business customersand promotions featuring Black-owned businesses, customers can find products from these businesses throughout the shopping experience. Amazon also recently launched discoverability enhancements that highlight products from minority-owned businesses in related search results, allowing customers to easily find and buy from certified businesses.

We're proud to have strategic partners collaborate with us on this initiative, including the Minority Business Development Agency and the U.S. Black Chambers Inc. (USBC). These organizations will lead community engagement for BBA and help us provide participants with mentorship, business development, training, and educational resources to empower their success. Our partners will continue to advise us as we enhance BBA based on their deep experience in supporting Black businesses. They will also help us as we create similar programs for other underrepresented populations of business owners. We anticipate welcoming additional partners and advisors in the future.

Ron Busby Sr., president and CEO of the U.S. Black Chambers Inc., said, 'We applaud Amazon's leadership in responding to the racial inequities that led to a significant number of Black-owned businesses closing during the pandemic. The financial, educational, and mentoring resources Amazon will invest through the Black Business Accelerator will enable USBC-affiliated businesses and Black entrepreneurs to not only survive but thrive as they adapt to operating in a post-pandemic world.'

BBA and selling on Amazon unlocks a powerful and proven economic engine that enables entrepreneurs to build their brands and sell their products to our more than 300 million global customers. We know that customers value the wide selection and diversity of products offered by these businesses, and we are excited to see the offerings these new sellers will bring.

Over the last few months, we've piloted BBA's benefits with some of the Black-owned businesses already selling in our store to better understand how we can most effectively support them, and we have applied our learnings to further develop BBA and ensure it provides value. Here's what some pilot participants had to say about the program and selling on Amazon:

'Amazon provides an opportunity where everyone is welcome, and the door is open. We gained access to a huge customer base that provided the opportunity to offer our innovative products directly to millions of potential customers. We have depended on honest reviews and feedback from customers to improve, learn more about what our customers like, further innovate, and grow the business.'

Toyin Kolawole, CEO, Iya Foods
'Since enrolling in the Black Business Accelerator pilot, I've been able to enhance my listings with strategic optimization, imaging services, and building brand awareness using their advertising tools.'

Karen Blackwell, founder and CEO, Kanda Chocolates
'Through this program, we have a partner who has helped us better understand how to use Amazon's tools and analytics to expand our sales and help me connect with business customers.'

Rodney Marshall, founder and CEO, Aldevra

We are thrilled to embark on this journey to welcome many more Black business owners to the opportunities of selling on Amazon. We are optimistic about the potential to help them generate wealth for themselves, their employees, and their communities. To learn more about participating in the program, visit sell.amazon.com/bba.

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Darnella Frazier, Teen Who Filmed George Floyd’s Murder, Wins A Pulitzer Award

Darnella Frazier George Floyd

“She was the one who recorded a motion cinema picture that set the world on fire,” said George Floyd’s brother, Philonise.

Darnella Frazier, the teenager whose video of George Floyd’s murder went viral, fueling massive protests against police brutality around the world last year, has been awarded an honorary Pulitzer Prize.

In an announcement Friday afternoon, the Pulitzer Prize board commended Frazier “for courageously recording the murder of George Floyd,” highlighting “the crucial role of citizens in journalists’ quests for truth and justice.”

Frazier was just 17 years old on May 25, 2020, when she pulled out her cellphone to record Minneapolis police officer Derek Chauvin kneeling on George Floyd’s neck.

In the words of George’s brother Philonise, the video “changed the world.”

“She was the one who recorded a motion cinema picture that set the world on fire,” he said just over a year later, after the video served as a key piece of evidence in Chauvin’s trial and conviction.

Frazier would go on to testify in Chauvin’s trial, where she was overcome with emotion as she recalled Floyd’s terror and fear and pain, which she shared with millions of people via her cellphone.

In a social media post on the first anniversary of Floyd’s death, she reflected on the moment she filmed, describing a trauma that’s reverberated through every aspect of her life.

“Although this wasn’t the first time I’ve seen a black man get killed at the hands of the police, this is the first time I witnessed it happen in front of me,” Frazier wrote. “Right in front of my eyes, a few feet away. I didn’t know this man from a can of paint, but I knew his life mattered. I knew that he was in pain. I knew that he was another Black man in danger with no power.”

Frazier said the trauma has manifested in panic and anxiety attacks, insomnia, having to leave home over safety concerns, and “closing my eyes at night only to see a man who is brown like me, lifeless on the ground.”

“A lot of people call me a hero even though I don’t see myself as one,” she said. “I was just in the right place at the right time. Behind this smile, behind these awards, behind the publicity, I’m a girl trying to heal from something I am reminded of every day.”

Conagra Brands Forms Multi-Year Partnerships with Thurgood Marshall College Fund and Hispanic Scholarship Fund.

Conagra Brands announced a new partnerships with the Thurgood Marshall College Fund (TMCF), the nation’s largest organization exclusively representing the Black college community, and the Hispanic Scholarship Fund (HSF), one of the nation’s leading nonprofit organizations supporting higher education, to support Black and Brown students. The partnerships will help ensure students receive equitable access to quality higher education opportunities and reinforce Conagra’s commitment to supporting the communities where its employees live and work.

Conagra will make donations to each organization to fund several college scholarships. Additional resources will be provided to each institution to support scholarship recipients as they navigate internships and other services that prepare them for their future careers. Conagra employees will also actively engage with scholarship recipients to provide unique professional development opportunities that strengthen career prospects for students’ post-college, including resume building assistance, job interview preparation, and additional workplace readiness experiences.

“Conagra is committed to advocating for Black and Brown students in their educational pursuits. A significant barrier to higher education remains its cost. Our partnerships with the Thurgood Marshall College Fund and Hispanic Scholarship Fund will help overcome that barrier to ensure equity and education go hand-in-hand,” said Henry Jones, Senior Director of Diversity and Inclusion at Conagra Brands. “By providing diverse students with not only the financial resources, but also with skills and experiences to succeed in their chosen career, we will play a role cultivating our next generation of leaders.”

Key components of Conagra’s comprehensive diversity and inclusion strategy include building a strong entry-level pipeline; providing development opportunities for underrepresented groups internal and external; and committing to develop and advance talent in order to increase the amount of racial, ethnic and gender diversity and representation within the company. This scholarship initiative will help ensure Black and Brown talent are supported in their pursuit for academic excellence and as they enter today’s workforce.

“We are delighted to have the support of Conagra Brands,” said Betsy Burton-Strunk, Vice President of Development at the Thurgood Marshall College Fund. “Our commitment to increasing the pipeline and pathways for young Black talent is directly aligned with their dedication to making a difference in the Black community through higher education. We are grateful for their direct support of the Thurgood Marshall College Fund.”

“We at HSF are pleased to have Conagra Brands as a partner, who shares our belief that scholarships and support services can make the crucial difference for talented youth to complete a bachelor’s degree and ultimately launch careers in fields that matters to our society and our world,” said Fidel A. Vargas, President & CEO at the Hispanic Scholarship Fund. “Conagra’s contribution will help our scholars achieve their full potential.”

For more information on eligibility requirements and how to apply for scholarships, please visit tmcf.org and hsf.net.

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