Confronting Racial Inequities in Workplace Benefits

New IASP research connects U.S. occupational segregation with the racial wealth gap

October 09, 2019

By Bethany Romano, MBA'17

Occupational segregation has major wealth repercussions for black and Latino workers across a variety of sectors, from construction to finance, according to a new report. This study comes from the Institute on Assets and Social Policy (IASP), a team that has done years of foundational research on the racial wealth gap in the United States. IASP researchers, led by Director Thomas Shapiro, are now digging in to specific structural causes of the gap, such as work.

In a recent report, the team focused on the relationship between occupational segregation, workplace benefits and the racial wealth gap, finding that black and Latino employees are less likely to have wealth-building and wealth-protecting workplace benefits than their white colleagues.

Laura Sullivan

The team partnered with The Workers Lab, an Oakland, California-based incubator that invests in solutions to improve conditions for low-wage workers, to bring its research before labor unions and workers’ advocates, where it could have maximum impact.

“Work is an important contributor to wealth building. You can think of it as a work-to-wealth pipeline,” says report co-author and Senior Research Associate Laura Sullivan, PhD’13. “But there are holes in that pipeline, and those holes are bigger for households of color.”

The report reveals a series of compounding disparities: First, black and Latino workers are disproportionately segregated into lower-paying sectors, where they have less access to wealth-building benefits. For example, Latinos are more likely than others to work in construction — which tends to have lower health care and retirement benefits — and within that sector, Latinos are half as likely as their white peers to have health insurance. Second, even in higher-paying fields (like finance and STEM), black and Latino workers frequently are paid less and receive fewer benefits than their white peers.

“There are disparities within and between sectors,” says Shapiro. “Which actually broadens the racial wealth gap.”

Thomas Shapiro

This suggests that the advantages of working in higher-paying fields are not shared equally. Across several key sectors, the typical black or Latino employee has tens of thousands of dollars less in wealth than white peers in the same field with similar educational backgrounds.

“People tend to think that getting an education and the right job in the right sector will solve disparities in financial security and wealth,” says Sullivan. “But these gaps are significant, and they’re even larger in some typically high-paying sectors.”

Good benefits are important to building economic security. Sullivan adds, “As you go from a typically lower-paying sector to a typically higher-paying sector, every group is more likely to have either health or retirement benefits, but those disparities persist.”

When the IASP team first took on this research, they started thinking early about how to ensure that their work would have the greatest positive impact. “We knew we wanted to connect with ground-level advocacy and organizing,” says Shapiro. “So I was thrilled when Carmen Rojas, CEO of The Workers Lab, was interested in partnering with us on disseminating this research.”

“The Workers Lab is doing cutting-edge work on new styles of organizing and redressing the imbalance of worker power,” Shapiro adds. “Partnering with organizations like this is important to IASP, and we look forward to growing this partnership more in the future.”