How Corporate America Is Failing Black Employees

Black workers continue to face significant gaps in the labor market when it comes to promotion, pay and opportunity, costing the U.S. economy trillions of dollars.

If the Black wage, education, housing and investing gaps had been closed 20 years ago, it would have added an estimated $16 trillion to the economy, according to a report by Citi, with the Black pay gap alone accounting for $2.7 trillion.

Today, Black workers are overrepresented in low-wage entry-level jobs and underrepresented in senior leader and executive roles. In the U.S. private sector, Black workers make up 12% of the entry-level workforce and just 7% of the managerial workforce, according to McKinsey & Company.

The higher you go, the fewer Black professionals you see. At the senior manager and VP level, Black workers make up just 5% of the workforce, and at the SVP level, just 4%. At the very top, only around 1% of Fortune 500 CEO spots are held by Black leaders.

If the current trajectory continues, McKinsey & Company estimates that it could take 95 years before Black employees reach parity at all levels in the private sector.

“Black workers, on average, are not being hired, promoted or paid according to what would signal their level of productivity based on their experience or their education,” Valerie Wilson, director of the Economic Policy Institute’s program on race, ethnicity and the economy, tells CNBC Make It. And “it absolutely impacts everything. It impacts your family’s economic security.”

On average, Black men are paid just $0.71 for every dollar paid to white men, according to EPI. Black women, who face both gender and racial barriers, are paid just $0.63 for every dollar paid to white men. Over the course of a 40-year career, the National Women’s Law Center estimates that Black women stand to lose close to $1 million due to this disparity.

These racial gaps in the labor market are linked to several structural inequities, according to McKinsey & Company, including Black workers’ underrepresentation in regions with high job growth opportunities and overrepresentation in industries with low growth and low wages, such as entry-level healthcare jobs, retail and food services.

And in the corporate world, Black workers face ongoing challenges like bias and discrimination, a “broken rung from entry-level to manager roles,” lack of support from supervisors and tokenism that continues to hold them back and can even force them out the door.

How bias and discrimination can play out

In September 2017, Ryan Walker-Hartshorn landed what she thought was her “dream position” working in New York City as an assistant to Bon Appetit’s then editor-in-chief Adam Rapoport. In her role, she earned $35,300 per year and says she was told, with overtime hours, she could earn up to $50,000.

“That was a sell for me because I was like ’Hell yeah, I’m out of college. I’m just going to work my a-- off and I’ll make a lot of money in overtime, and I’ll be able to make ends meet,” she says.

Starting out, the Stanford University graduate says she was aware that her job would include many of the standard tasks most assistants are asked to do, such as managing the editor-in-chief’s calendar, answering phones, coordinating travel and running personal errands for her boss. When she was hired she says she was also told there would be potential for her to work on creative projects.

What she didn’t expect was working in what she calls a “toxic” culture where she was just one of two Black people on staff. Walker-Hartshorn alleges that in addition to racially insensitive comments — such as the time her boss asked her to make his coffee the color of Rihanna — she says she experienced microaggressions and differential treatment from her white peers when it came to overtime pay, budgets for stories and investment in career growth.

During her nearly three years of working as an assistant, she alleges that she was repeatedly denied a pay raise or promotion, despite finding out from a senior employee at Conde Nast, Bon Appetit’s parent company, that assistants at other publications were making more money than her. Eventually, in August 2020, the 26-year-old left Bon Appetit after being offered an interim editorial assistant role rather than the promotion she wanted.

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How Corporate America Is Failing Black Employees