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Towards Equity: Wealth Impacts For Black Professionals In Careers Launched By Internships

Towards Equity: Wealth Impacts For Black Professionals In Careers Launched By Internships
Posted By: Reggie Culpepper on July 29, 2022

SUMMARY
This article expands upon the study of wealth impacts for students who matriculated through a career development program targeting African American, Hispanic, and Indigenous students. The study was conducted by Fulbright Scholar, Adam Davids, who was hosted by INROADS, a nonprofit organization focused on providing access and opportunities for career acceleration to students from backgrounds underrepresented in corporate leadership. Authors theorize that students who matriculate through the INROADS process can leverage training, professional experiences, and the support of peer connections to land in high-income careers and build wealth. An analysis of economic indicators shows considerable wealth-enhancing outcomes, compared to college-educated White peers, including heightened rates of homeownership, higher income, and comparable net worth.

INTRODUCTION
Eliminating racial and ethnic inequalities is a core concern in the United States. Since at least the time of the Civil Rights Movement, strategies for reducing racial inequalities have most often focused on programs to increase educational attainment among groups labeled as minorities. Education has been viewed as a critical component of the struggle toward social justice because the acquisition of literacy and numeracy are important to enhance human development broadly and therefore has been viewed as an important tool for increasing the full and equitable participation of individuals in modern society. Alongside ideas about civic participation, the pragmatic reason that educational attainment has been given importance is because of the link between the acquisition of higher education with increased access to higher-income jobs (Oliver & Shapiro, 1994; Silvia, Evans, & Maume, 1996; Emmons & Ricketts, 2017). Simply put, most jobs with high wages come from jobs that require high levels of education. The assumption undergirding the focus on both educational attainment and its link with income is that income is critical to economic well-being. Racial disparities tied to economic status are believed to be consequences of systemic discrimination and policies of economic exclusion. Therefore, the drive to create a more just society and to reduce racial and ethnic inequality has very often been understood as the need to broaden access to education. By doing so, it is believed that economic rewards will be more equitably distributed.

The aftermath of the Civil Rights Movement has brought important changes in laws protecting against explicit discrimination which has resulted in declines in race and ethnic income gaps. However, in the last several decades, research has demonstrated that despite progress in reducing income inequality, race and ethnic gaps in wealth have not declined. Wealth, as an indicator of economic well-being, signifies a command over financial resources simply not captured by focusing on income alone. Because it is inclusive of income, savings, homeownership, and ownership of other assets (stocks, bonds, etc.), wealth gaps are a far better indicator of the magnitude of economic inequality (Blau & Graham, 1990; Emmons & Ricketts, 2017).

In this paper, we examine the wealth profiles of individuals who have completed the INROADS process. INROADS is a nonprofit organization focused on pathways to corporate leadership for underrepresented groups through career readiness programming. For this study, we utilize a novel strategy to discover and comparatively examine the wealth profiles of INROADS participants. Comparing the wealth profiles of INROADS alumni to those of college-educated Whites, we find that INROADS participants are advantaged. In the next sections of this research brief we describe the INROADS program; our data and findings; and our understanding of how participation in INROADS garners success in reducing racial gaps in economic well-being.

WEALTH INEQUALITY AS AN ECONOMIC INDICATOR
As mentioned in the introduction, education has been the predominant strategy used to address racial inequality-the struggle to improve access to education is an effort to improve access to higher paying jobs (Oliver & Shapiro, 1994; Emmons & Noeth, 2015). Parallel to educational attainment, racial income gaps have shown improvement in the decades since the civil rights movement.



Between the 1960 and 1980s, levels of college attainment rose significantly and a greater proportion of families of color were able to enter the middle class. Although families of color continue to have, on average, lower incomes than Whites, median income levels of Black and Hispanic Americans have grown considerably closer to that of Whites over time (Emmons & Noeth, 2015; Emmons & Ricketts, 2017). However, the gaps in wealth during this period have not improved nearly as much (Oliver & Shapiro, 1994). Studies have shown that Black and Latinx households have far less wealth as compared to their White peers (Blau & Graham, 1990; Oliver & Shapiro,1994). While no one would argue that college attainment is unimportant, college attainment by itself is not enough to close the considerable racial and ethnic gaps in economic well-being that continue to disadvantage households of color. Group differences in wealth have multiplicative and intergenerational impacts. For example, if a family has more wealth to draw upon, they have a greater ability to finance their child’s education and help with the purchase of the child’s first home, both actions that can help establish a faster trajectory for young adults to begin building their wealth portfolios by virtue of having a college education which both increases access to higher paying jobs, leaving them with lower amounts of student loan and other debt (Oliver & Shapiro,1994; Killewald & Bryan, 2018). The combined impact of higher incomes and lower debt profiles that young adults from wealthier families have generally helped them to become homeowners earlier in life and illustrates the numerous ways that wealth inequality may be multiplicative both intergenerationally, and over an individual’s life course (Oliver & Shapiro, 1994; Killewald, & Bryan, 2016).

Evidence of the lack of progress in reducing the wealth gap is sobering. Despite civil rights legislation in the areas of employment and in housing discrimination, wealth gaps between blacks and whites are as substantial today as they were in 1968. Adjusting for inflation, in 1968, a typical middle-class Black household had $6,674 in wealth compared with $70,786 for the typical middle-class white household (Peterson and Mann, 2020). Most current numbers show net worth at $24,100 for Blacks and $188,200 for Whites (Survey of Consumer Finances 2019). So, while the sheer amount of wealth has increased substantially among middle-class Black households, racial gaps in wealth profiles have more than doubled. The chart below shows that since 1989, White net worth has substantially outpaced the net worth of Black families. Wealth gaps can also be observed among households with similar income levels. For example, among those in the top 10 percentile, the median net worth for White families in this group is $1,789,300, compared to $343,160 for Black families (Emmons and Noeth, 2017).

Changes in educational acquisition have not proved effective in shrinking racial wealth gaps despite their salutary impact on income. Extending the earlier example clarifies why this is the case. An individual whose family lacks the capacity to finance their education would likely take out considerable loans to attain a college degree. So, even if the graduate in this example was able to acquire a similar income as a person from a wealthier family, they will begin their career with far more debt and therefore have considerably fewer resources available to invest in activities that could create more wealth, such as home ownership, business ownership, or investments in stocks, annuities, and other revenue-generating opportunities. Read more at INROADS.org

ABOUT THE AUTHORS
Adam Davids is a Non-Executive Director at Social Ventures Australia and a Fulbright Scholar focused on establishing a robust framework of workplace equity standards for Indigenous Australians.

Dr. Angela James is currently Research Director at the Center for Transformation of Schools at UCLA. A seasoned scholar, sociologist, consultant, and ardent community organizer/activist, Dr. James has devoted her professional life to studying poverty and inequality and her personal life working to eradicate it.

Dr. Kelly D. Owens serves as the Chief Impact & Strategy Officer at INROADS, where she oversees evaluation, training, and research activities for the organization.

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