By Andrea Ferstan, Vice President of Innovation, Policy, and Research, and Betsy Ohrn, Director of Research
(This article first appeared on the Ramsey County website.)
Employers in the Twin Cities are competing for talent in a tight and churning labor market. Yet even as workers have more leverage than they have in decades, the dire reality for Black and Hispanic workers calls us to action.
Despite steady or increasing employment, wages for Hispanic and Black workers continue to lag those of the region’s white workers. While wages have increased for all workers in recent years, wages for white workers are significantly higher and have increased faster than those of Black workers.
In 2020, the average annual earnings of full-time white workers in the Twin Cities was $84,000 while Hispanic workers earned $58,000, American Indian/Indigenous workers earned $66,000, and Black workers earned $48,000.
You can see this data more in-depth at our new Indicators for an Inclusive Regional Economy dashboard beginning June 21.
The result is that many full-time Black, Indigenous, and Hispanic workers in the Twin Cities are not earning enough to sustain a family.
In 2020, 77% of the region's workers earned a living wage, but this figure was far lower for many racial and ethnic communities — Black (52%), Hmong (53%), Mexican (60%), Vietnamese (63%), Indigenous (69%) — signaling compounding barriers to access jobs paying to family-sustaining wages and benefits in a labor market where a large number of employers are raising wages to attract talent, yet continue to over-concentrate people of color in lower-wage occupations. Given that Covid-related job losses disproportionately impacted Black, Hispanic, and low-wage workers, addressing wage inequities is more critical than ever.
Good Jobs
Rising inequality is driven by a rise in low-wage jobs. The Center for Economic and Policy Research found that since the 1970’s, the provision of “good jobs” — those that provide a living wage, employee-sponsored healthcare, and retirement benefits — has fallen. This is due to a loss in bargaining power for low- and middle-income workers, globalization, privatization, deregulation, and a stagnant federal minimum wage.
Meanwhile, the evidence is clear: a “good job” leads to employee engagement and well-being. And what is good for workers is also good for employers.
Our Good Jobs Framework includes four key pillars aligned with the following research-based strategies focused on racial equity:
Leadership: Provide core elements of a good job, such as sustainable equitable pay and benefits, stable hours, and scheduling.
Hiring & Support: Help workers perform well and achieve stability by attracting racially diverse talent, providing training, childcare, and transportation support.
Retention & Advancement: Help employees advance in their careers and develop their skills through career development, mentorship, and acknowledgement.
Voice & Culture: Ensure employees have agency and are engaged through participatory management and a commitment to antiracism.
Becoming an inclusive and competitive region requires cooperative employer action. Good jobs and racially equitable and inclusive workplaces are vital ingredient for employers pursuing competitive edge for talent and customers. This is correlated to higher profits, innovation, and productivity. In today's environment, this is a critical competitive edge to attracting and retaining diverse talent.
Action Steps
1. Commit to Pay Equity: Start by conducting a pay equity audit and identifying where you have pay gaps by race and gender. Close gaps and build salary ranges for new positions to help guide more equitable decision-making during hiring, negotiations, and promotions. Establish a policy to stop asking candidates for their salary history or salary expectations, which limits salary negotiations. By establishing job offers based on salary history or expectations rather than salary ranges and candidate experiences, employers have been shown to exacerbate pay disparities by race and gender. Finally, make a commitment and stick with it. Let your team know you are working toward a more equitable pay structure, take action, and continue to measure progress.
2. Provide Educational Benefits & Formal Career Pathways: Ensure equitable access to leadership development, tuition reimbursement and advancement programs, career advancement, and on-site education programs for Black, Indigenous, Latinx, and Asian employees. Analyze participation in these programs and develop strategies to increase diverse representation and completion.
3. Provide Mentoring, Coaching, and/or Employee Resource Groups for Employees of Color: Black and Brown employees regularly face aggressions in the workplace and in the community and such efforts can help Black, Indigenous, and employees of color navigate some of these challenges. Managers should also be trained to ensure they are not coaching employees of color to adopt white cultural norms, but to maintain autonomy, build and leverage diverse strengths, address micro- and macro-aggressions, and facilitate inclusive teams and cultures.
4. Create Supports your Employees Need: The Covid pandemic laid bare the challenges facing working families today. As we emerge into a new era, consider how you can support your employees in meaningful ways. Offering flexible work hours, subsidized transportation, housing and childcare, and sick and family leave benefits can pay dividends for both employees and employers in reducing lost time, increasing retention, and productivity. Start by asking your employees which benefits would help them the most and invest in the options that will have the greatest impact for your workforce.
5. Take Stock of your Inclusive Culture: Inclusiveness starts with trust and ends in high levels of engagement and productivity. When trust and relationships are in the center, good policies for all are the result. A good job goes beyond compensation and benefits. Regularly survey and analyze the quality of your culture. Consider, do you have a transparent grievance process? Do employees have the autonomy they need? Is there open communication between leadership and employees? Is antiracism demonstrated in organizational values, strategy, goals, vision, and partnerships? If you’re interested in learning more about measuring your company’s progress towards building a racially equitable and inclusive workplace, check out the Center’s Racial Equity Dividends Index.
Becoming an employer focused on good jobs is a strategy, not an accident, requiring inclusive policy, practices, and culture. The results of these strategies are worth the work. Not only do they result in improved retention, higher productivity, and profitability, but in an inclusive economy that works for everyone.
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Resources
Gould, E., & Kassa, M. (2021). Low-wage, low-hours workers were hit hardest in the COVID-19 recession: The State of Working America 2020 employment report.
Schmitt, J., & Jones, J. (2012). Where have all the good jobs gone? Washington, DC: Center for Economic and Policy Research.
Congdon, W. J., Scott, M. M., Katz, B., Loprest, P. J., Nightingale, D. S., & Shakesprere, J. (2020). Understanding Good Jobs: A Review of Definitions and Evidence.