Findings of recent research suggest that career development programs that focus on key levers of economic mobility may play a critical role in reducing or even eliminating racial wealth gaps for their participants.
According to Towards Equity: Wealth Impacts for Black Professionals in Careers Launched by Internships, “While education can certainly facilitate entry into high-income careers, educational attainment alone does not eliminate racial gaps in income, or in wealth attainment.”
Fulbright scholar Adam Davids conducted the study of wealth impacts for students who matriculated through a career development program targeting African American, Hispanic, and Indigenous students. This program, INROADS, is a nonprofit organization focused on providing access and opportunities for career acceleration to students from backgrounds underrepresented in corporate leadership.
“One of the goals of the research was to examine the financial impact of INROADS,” explains Kelly D. Owens, Ph.D., chief impact and strategy officer at INROADS.
“Davids was curious about the life outcomes for INROADS alumni, who benefited from leadership development training, career coaching, and internships within corporate America.”
Commented Dr. Angela James, a UCLA sociologist and researcher who co-authored the Towards Equity article: “When examining its alumni population, Davids confirmed that individuals who matriculated through the INROADS process were more likely to achieve parity with their white counterparts when looking at income and net wealth.”
For example, the study shows that racial gaps exist in homeownership—which is among the most critical components of wealth accumulation. While more than 71% of white families own homes, only 41% of Black families and 46% of Hispanic families do so. However, for INROADS alumni, homeownership rates reached 76%.
When looking at wealth more broadly, while only 18% of all households and 8% of non-white families have a net worth that exceeds $500,000, more than 40% of INROADS alumni from the study’s sample group have attained this level of financial security.
“The year 2020 brought racial equity to the forefront and corporations have been making tremendous commitments toward racial equity, which is phenomenal,” Dr. Owens says.
“Scaling up efforts that have proven to make a difference is a surefire way to address lingering issues, such as college student attrition, the need for more diverse professionals in certain industries, and the racial wealth gap.”
Dr. Owens says that employers and colleges can help advance racial equity by:
- Using culturally competent practices that support all students through college completion;
- Offering paid versus unpaid internships. Because many students from low-income households are expected to help with college and family expenses, an unpaid internship is not a viable option. Students who cannot afford to participate in unpaid internships miss out on substantive experiences that could make them more competitive hires;
- Awarding scholarships and offering paid internships to decrease the number of students who drop out due to financial strain. Scholarships and internships can also help students eliminate college loan debt and become homeowners earlier in life;
- Supporting organizations that prepare students for the workforce with real-world training. Setting students up for a successful transition into the professional workforce may have positive impacts on employee retention.
- Training hiring managers on unconscious bias and designing recruitment and hiring practices using an equity lens; and
- Using cultural competence to support young professionals of diverse backgrounds in the workplace;
“Helping students obtain skills and relevant work experience in addition to a college degree means opening doors for them to become high-income earners,” Dr. Owens explains.
“My advice to corporations wanting to make progress towards racial equity is to invest in organizations that focus on preparing diverse students to enroll in and persist through college graduation. Also, invest in organizations that broker relationships with employers that provide entrée for college students from all backgrounds to gain substantive work experience as paid interns.
“Scaling up the number of young people who benefit from these investments not only results in greater wealth impacts for program participants, but also results in positive economic impacts for society.