According to a survey by KPMG, Canadian companies are making uneven progress in tackling racism at work. The survey revealed that a little over 80 percent of respondents said their employers are making small improvements; nevertheless, a similar proportion said that they experienced some form of racism or microaggression at their workplace. This means that many employees from marginalized and Black communities make less money than others in the same field.
Understanding the racial wealth gap involves peering into its fundamental meaning. Many people think of wealth in terms of money. While that is true, wealth is also about improving the quality of your life to protect those you love and care about, to support them to be healthy, and pursue work that makes them feel respected and find meaning.
If you think about it, that isn’t the case for many people in marginalized communities. For many years, many philanthropic organizations have tried to bridge the racial wealth gap by providing so-called band-aid solutions. Nevertheless, to bridge the gap effectively involves much more. At its root core, it involves providing strong wages for everyone, especially people of colour.
If you were a Black Canadian living in a province like Toronto in the 1980s, you probably had the same income as your white neighbour. According to an article by the Toronto Star, the average income of radicalized people in Toronto has stagnated or dropped over the past 35 years, while incomes of non-radicalized residents have soared.
The pandemic also took a toll on many Black households. A 2022 report released by the Canadian Centre for Policy Alternatives revealed that the benefits of the pandemic recovery, such as wage increases, have been unevenly distributed for radicalized workers, widening the gap between Black employees and their white counterparts.
How to Tackle the Economic Divide
Increase Wages
For many years, people from Black communities have often trailed behind white workers when it comes to wages, even if they have the same education, experience, and skills. Nevertheless, establishing a path to financial security begins with strategic wages.
Many in marginalized communities do not necessarily have the same circumstances as their white neighbours. These communities need more than a living wage; they need long-term career development, pay parity, and gradual wage progression for them to thrive. A stable job with a rising wage allows them to provide for their families and facilitates wealth accumulation for future generations.
Many black families are being left out of home ownership. According to Statistics Canada, 48 percent of the Black population in Canada in 2018 lived in a home owned by a household member. For them to have a home of their own, they need to accumulate enough capital, which cannot happen without a steady rising wage. Wage progression is good for employees and employers. It attracts top talent, improves retention, and incentivizes business growth.
Include a Benefit System
Meaningful benefits play a pivotal role in building generational wealth. Most employee wealth is derived from workplace benefit packages. Nevertheless, if you are on a low wage, a benefit system might not exist. Business leaders and investors can change that by giving employees benefits that would improve their lives and frees up some income for saving and investing. For example, they can provide healthcare support, such as dental benefits, childcare support, or a retirement savings plan. All these can generate wealth.
Help Employees Grow their Skills
People from marginalized communities are often stuck in entry-level jobs. For them to bridge the gap, entry-level employees must have access to training and development opportunities that enable them to step into bigger leadership roles. Programs that teach them valuable skills prepares them for higher responsibilities and reduces turnover, thereby accelerating business growth.
When employers hire more workers from marginalized communities, they make diversity and inclusion a priority. This, in turn, helps employees benefit from quality jobs and sets up their generation for greater progress, thereby bridging the racial wealth gap!
David Messiha | Staff Writer