In 2020, events compelled Americans to reckon with the inadequacy of focusing on equality rather than equity in pursuit of the nation’s stated goal of treating all people fairly.
Equality requires that each person has the same opportunity, but equity necessitates that each person has what they need to thrive and race no longer determines one’s social or economic upward mobility. To focus on equity means recognizing that people are starting from different circumstances and that the reason some people are further behind is not due to deficits within them, their families or their communities. Rather, the disparities they experience are grounded in systemic barriers, including structural racism—that is, the policies, programs and institutional practices that facilitate the well-being of white people, while creating barriers to the well-being of people of color.
The inequities people experience can accumulate over their lifetimes, leaving their well-being in old age uncertain. This is particularly true for older people of color. An Urban Institute analysis showed that people’s lifetime earnings differ markedly by race and gender. Among people born between 1950 and 1964 (people ages 58 to 62 at the time of the analysis), average real lifetime earnings were $2.7 million among white men, $2 million among Latinos and $1.8 million among Black men.
Women had even fewer lifetime earnings: white women typically had $1.5 million, Latinas $1.1 million and Black women $1.3 million. Frequently, such disparities are attributed to a lack of education among people of color—that is, to a deficit. However, the data do not support this explanation.
Black Workers Face Labor Market Barriers Regardless of Their Education Level
The data show that Black workers at every level of educational attainment typically experience higher rates of unemployment and part-time work when they would prefer full-time work, longer periods of unemployment and lower wages than white workers. In other words, Black workers with high school degrees and those with advanced degrees both experience these same disparities.
Black women have a long history of labor market participation and have consistently shown higher rates of labor force participation than white women. Despite this, Black women experience higher rates of unemployment and periods of involuntary part-time employment, longer periods of unemployment and lower wages than white women and white men, at every level of educational attainment.
Rigorous research found that discrimination in the labor market persists. For example, one study of hiring practices from 1989 to 2017 showed that white applicants received 36 percent more callbacks than Black applicants, and 24 percent more than Latinos. The Institute for Women’s Policy Research estimated that if progress on pay inequity proceeds at its current (slow) pace, it would typically take approximately 40 years for women to achieve pay equity, more than 100 years for Black women and 200 years for Latinas.
Enhancing Social Security benefits and expanding Supplemental Security Income would lift more than 1 million people out of poverty in 2021.
Moreover, the Equal Employment Opportunity Commission found that even after its more than 50 years of operations, occupational segregation persists. People of color are underrepresented in managerial positions that tend to pay higher wages and include benefits, and they are overrepresented in service positions that typically pay lower wages and are less likely to offer benefits. These benefits include employer-sponsored retirement savings plans and health insurance.
Workers who lack such benefits are less likely to have sufficient pension benefits and other retirement savings when they retire, leaving them more reliant upon Social Security during those years. But, given their higher rates of unemployment and lower wages, on average, workers of color also receive lower Social Security benefits than they would if they had steady work with equitable pay. In addition, the absence of employer-sponsored health insurance means these workers may have to pay out of pocket for coverage or be susceptible to financial shocks if they or a family member becomes ill.
Looking Forward, Potential Opportunity in the New Administration
The COVID-19 pandemic brought occupational segregation into stark relief as it became apparent that essential workers in the United States are disproportionately people of color. Their work on the front lines has ensured that the rest of the country can purchase food at grocery stores and has sufficient caregivers for older adults, children, and the infirm.
Unsurprisingly, people of color have been hit harder than others by the virus, experiencing higher rates of illness and death. Yet, many of these essential workers are not paid enough and do not have benefits for themselves and their families to cover their daily expenses or healthcare expenses, if eventually they contract COVID-19 and are unable to work.
As a new administration enters the White House, there is a new opportunity to choose equity as the means for achieving a just society. An Urban Institute assessment of Biden-Harris proposals regarding benefits indicates that they would enhance Social Security benefits and expand Supplemental Security Income. Together, these proposed changes would lift more than 1 million people out of poverty in 2021 and cut the poverty rate among adult Social Security beneficiaries by more than half over the coming decades.
Because of systemic racial and gender discrimination in the labor market, people of color—especially women of color—experience higher rates of poverty than other communities, even after a lifetime of work and after receiving Social Security. The Biden-Harris proposals, if enacted, could move the country closer to achieving equity and a just society.
Kilolo Kijakazi, MSW, PhD, is an Institute Fellow at the Urban Institute in Washington, DC. The views expressed are her own.