Just over two years ago, Corporate America found itself at a crossroads. As Americans rose up in the streets to acknowledge the violent truths about our country’s painful manifestations of everyday racism, leaders were forced to look critically at their marketing, their hiring, their supply chains, and—perhaps most critically—themselves.
T 2022 Ƶ Trust Barometer Special Report: Business and Racial Justice in America finds that their efforts, while not without good intentions, have fallen short when it comes to impact. Work—the pre-eminent pathway to economic equity and generational wealth—is still largely perceived as a racist place, and in many cases, DEI leadership isn’t empowered or valued enough to make a material change.
In a climate of low trust in government and nonprofits, as reported in our January 2022 Ƶ Trust Barometer, most Americans expect their CEOs to serve as leaders and guides on societal issues. It’s a large cross to bear for a group historically perceived solely as agents of enterprise value creation.
But it also, in many ways, makes sense: if the most significant result of racism is the deeply unequal distribution of economic opportunity in our country, shouldn’t those who control the flows of capital play a part in rectifying the challenges that persist? Consider the core set of structural challenges acutely felt by communities of color, according to McKinsey:
- Wage gaps: Wage inequality across the Black community manifests as a $220 billion annual wage disparity. For Hispanics, it’s $288 billion. 43 percent of Black workers earn less than $30,000 a year, and the median wage for U.S. Latinos is less than $40,000.
- Wealth gaps: The median Black household has just one-eighth the wealth of the median white household, with inheritance driving 60 percent of the disparity in annual income. The median Latino household has one-fifth the wealth.
- Irregular income distribution: Asian-Americans have the highest within-group income inequality in the U.S., with the top 10 percent of earners out-earning the bottom 10 percent by a factor of 10.
- Mental health: Crisis Text Line, a nonprofit group that provides free mental-health support via text message, saw a 39 percent increase in texts from Asian Americans in the first quarter of 2020.
- Nutrition: 8.3 million Black Americans —one in five—live in food deserts.
Now consider the power of the corporation. Leaders have the power to identify and fix wage gaps, strike out bias in the workplace, support physical and mental health equity, grant access to capital, and invest in neglected communities.
Our research finds, two years in, that trust in employers’ racism response may be waning. Consider the structural challenges above, and it’s for good reason. Trust on this issue is hard to win without tangible, structural progress. But the work of winning it is deeply rewarding – and must not be neglected by Corporate America.
The 2022 Trust Barometer Special Report: “Business and Racial Injustice in America” makes it clear that no one is coming to save America from its past and present. Not government, not nonprofits, and certainly not media. For employers—still deeply trusted by the employees they serve—it’s time to take the lead on racism response.
Lisa Ross is U.S. CEO.