How the Biden Administration Can Help Close the Racial Opportunity Gap
As corporate America has been forced to grapple with its responsibilities to combat racial inequalities, the Biden administration has a chance to chart a more detailed path for how companies can expand economic opportunity for their employees of color. Given the political capital the administration has already spent in passing the America Rescue Plan and advancing its Build Back Better agenda – and the likelihood of Republicans capturing at least one house of Congress in 2022 – it’s unlikely President Biden will have more legislative opportunities to close racial opportunity gaps. In order to combat racial inequality without congressional action, it behooves the Biden administration to launch a national campaign encouraging employers to expand and adopt inclusive talent management practices.
Even before the “Great Resignation,” millions of Americans without college degrees were excluded from economic opportunity and struggled to find a path to self-sufficiency or a family-sustaining wage. At the same time, employers struggled to fill open positions for jobs that require more education than a high school diploma but less than a four-year college degree. This paradox is the result of a market failure: our education and training systems are increasingly both out of touch with employers’ needs and out of reach for too many Americans.
While the federal government has made substantial investments in communities through infrastructure, tax, and housing incentives, these efforts have not expanded economic opportunity for communities of color. According to a 2018 analysis by the Federal Reserve Bank of Minneapolis, no progress has been made in reducing income and wealth inequalities between Black and white households over the past 70 years, while youth of color make up the largest share of disconnected youth nationally. The COVID-19 pandemic has only exacerbated racial inequality, and further harmed community health and regional economies that were already suffering from a loss of major employers, high unemployment, and population loss.
After the death of George Floyd, the reckoning with systemic oppression of Black people and racial inequality in America spurred corporations to discuss how they could take meaningful and sustained action or racial justice and equity. As a result, equity as a business imperative to attract and retain top talent began to rise; 92% of Americans now say it’s important for companies to promote an economy that serves everyone. Despite the post-pandemic emergence of organizations like OneTen which has been aggregating employer demand from Fortune 500 companies to invest in Black talent, too many C-Suite leaders remain unsure which actions are most effective at increasing diverse representation, improving feelings of inclusion, or making progress on other diversity, equity, and inclusion goals.
Correcting America’s talent marketplace failure is both a moral imperative and economic necessity – especially for American businesses struggling to manage their talent supply chains in the wake of the pandemic. By mobilizing companies to invest in diverse talent pipelines, the Biden administration can help employers get better at sourcing their own talent and actively developing their employees’ skills. Such a campaign would inspire employers to adopt best-in-class investments across the talent management cycle such as skills-based hiring practices, upskilling, and educational opportunities. While a national campaign would rely on the voluntary compliance of American companies, it could very well enjoy bipartisan support given President Trump’s executive order in 2020 that directed the federal government to emphasize skills over degrees for federal jobs.
In the short-term, a national campaign could lead to meaningful changes to legacy hiring practices. Consider that many companies continue to use four-year degree requirements as a proxy for hiring even when the responsibilities for that job often don’t require a degree. According to EMSI Burning Glass research, employers will open 1.4 million jobs to those without a degree in the next five years. A national campaign that aspires to end this corrosive practice of “degree inflation” would better prepare large and small businesses to reevaluate job requirements to appeal to a broader talent pool. Inclusive hiring practices such as setting specific skill requirements for jobs while deemphasizing credentialing have been shown to be more effective at expanding economic opportunity for candidates of color who lack a bachelor’s degree and are often overlooked by hiring managers. These practices, over time, also help companies improve employee diversity, retention, and engagement.
By launching a national campaign focused on expanding awareness and action among employers to prioritize inclusive talent management practices, President Biden can help increase pressure on all American businesses to place the economic mobility of diverse talent at the forefront of their business models and growth strategies moving forward.
Jonathan Hasak is a Senior Director at Year Up, a national job training organization that enables young adults to move from minimum wage jobs to meaningful careers.