If Corporations Really Want to Address Racial Inequality, Here Are 9 Things That Actually Make a Difference

Since protests over the killing of George Floyd erupted across the country, I’ve received numerous calls from corporate CEOs who want to know what they should do, and where can they quickly donate $10 million dollars to advance the cause of racial justice?

The first thing I do is remind them of Martin Luther King Jr.’s caution that philanthropy must not be used to obscure the economic injustices that make it necessary. The frustration and rage we’re seeing across the country aren’t just about a racist system of policing.

It’s also about original sins–a genocide of Native Americans and enslavement of Black Africans whose stolen land and labor built this country’s wealth, enriching countless white people and their descendants in the process. It’s about the predations of modern-day capitalism that have allowed a privileged few to hoard the lion’s share of the nation’s wealth, effectively consigning Black folks to the bottom rung of the economic ladder.

This time the usual corporate playbook–issue a statement, gather a group of Black leaders for a conference call, give a hefty grant to the Urban League, resume business as usual–isn’t going to work. Here are 9 things every corporate leader can do to improve Black lives.

1. Remake your C suite

Change starts at the top. Do you have African-American board members? Black executives in your leadership team? If you do, are they token appointments, or do they have real power to recommend changes that would make your company more racially equitable?

2. Hire and advance more Black people

As leaders of large corporations, you have the power to transform Black lives immediately, simply by hiring and promoting more of us. Blind tests show that when identical resumes are submitted for the same job – one with a white-sounding name, the other with a Black-sounding one – the white applicant receives a callback 50% more often. Taking racial inclusion seriously means telling your managers that they cannot go forward with a hire or a promotion, at any level, unless the candidate pool is racially diverse.

3. Get involved in the Fair Chance Hiring Initiative

One legacy of the “tough on crime” era is that about one-third of American adults now have a criminal record, mostly for minor crimes that nonetheless hamper their ability to get a job. Black people are hugely overrepresented in that group, in significant part because of the kind of over-policing that sparked today’s protests.

That’s why the Society of Human Resource Management has urged employers to take the Getting Talent Back to Work Pledge as part of the Fair Chance Hiring Initiative by employing qualified job applicants with criminal backgrounds. Five years ago, the Ford Foundation committed to hire 10 formerly incarcerated business associates every year, and they are among our most dedicated employees.

4. Pay your employees a living wage

The federal minimum wage–$2.13 per hour for tipped workers and $7.25 per hour for others–is not a living wage. In 2016, nearly half of government public assistance went to people who worked full-time but still fell below the federal poverty line.

Black workers make up about 11% percent of the workforce, but 38% of Black workers who now work for the minimum wage would get a raise. Raising the pay of the workers at the bottom of your scale would disproportionately help people of color.

Commit to paying your workers a living wage of at least $15 per hour, and more in higher-cost parts of the country.

5. Provide a safe and healthy workplace

Valuing Black lives in a pandemic also means doing everything possible to create a safe workplace. Lack of adequate health insurance coverage are big reasons Black, Latinx and Native American people have contracted the coronavirus at a disproportionally higher rate than white Americans, with Black people dying of COVID-19 at a rate of almost 2.5 times the rate of white people. Does your company manipulate the schedules of your workers to fall just below the threshold for health coverage? Does it label people independent contractors even if they spend the bulk of their days working for you? If so, this is what advocates mean when they talk about structural racism.

6. Provide paid sick and family leave

Black workers often cannot afford to take time off to care for a newborn or sick family member. The lack of paid sick leave is another reason so many people of color have suffered higher rates of illness and death from COVID-19. If there were ever a question about whether paid leave is a moral issue, the pandemic should have laid it to rest.

7. Reconsider executive compensation

You might be asking, “but where am I going to find the resources to give my workers more?” Here, CEOs would do well to look in the mirror. According to the Economic Policy Institute, CEO compensation has grown 940% since 1978, while the salary of the average worker has increased only 12%. The economy would suffer zero harm if CEOs were paid less.

We know this, because many of those same executives are steering their excess wealth into philanthropic foundations, which have proliferated in the past two decades as their compensation has skyrocketed. While that charitable instinct benefits some of my foundation’s favorite causes, it would be better for the economy and for racial equity if more of that largesse were directed toward workers.

8. Advocate for a more progressive tax code

Standing up for Black lives means investing in the essential building blocks of social equality, from adequately funded schools to universal health care and affordable housing. These things require government action at scale.

Moving money from police budgets should be just the start. What we really need is a progressive tax code that will reduce income inequality, shore up our crumbling infrastructure, create a proper public health system and provide the social safety net that people need in a crisis. Five months into a pandemic that has shuttered the economy, Canada is subsidizing wages at 75% of full salary, while Americans are left to queue at food banks, wondering whether the next unemployment check will be their last.

Instead of deploying your lobbyists only on issues of narrow self-interest, detail them to advocate for tax reform and the expansion of social programs for poor people.

9. Advocate for shareholder reforms

But I hear you saying, “I have public shareholders to whom I’m accountable. Supporting tax policies that work against my company’s bottom line will only drive down our share price.” Yes, and this is why the current model of shareholder-driven capitalism that puts quarterly profits over people is bad for the long-term social and economic health of the country.

The Business Roundtable acknowledged as much last year, when 181 CEOs signed a statement revising the purpose of a corporation as one that benefits customers, employees, supplies and communities – not just shareholders. This was an important first step. Now, companies must turn that resolution into action, by committing to the kinds of tangible changes in practice and policy that will reduce inequality.

The uncomfortable truth is that if what you’re changing in your corporate practices doesn’t affect your bottom line, you’re not doing enough.

So to my friends in the Fortune 500: while the millions in onetime donations are appreciated, a permanent commitment to reducing racial inequality through changes in your own practices would be more meaningful. Outsourcing the work of racial justice isn’t sufficient when a broken system of capitalism has produced indefensible levels of wealth for owners and daily insecurity for workers. The corporate sector has the responsibility–and the ability–to act now.