How can Cleveland close its racial income and wealth gap?


Racial disparities in income run deep in this country. Unconscious bias, historic disinvestment in black communities and public policies that advantage white people have all fed a growing wealth gap that persists to this day. While it is true that black workers are disproportionately represented in low-wage occupations, there is national research that shows black workers earn less pay than their white counterparts, even when controlling for things like education and gender, and that the wage gap has gotten worse in the last decade. Locally, The Two Tomorrows has sounded the alarm; not only are these racial disparities bad for our black neighbors, but they are also bad for our regional economy. Below, I’ll share some work that is happening (or should happen) locally to help close this gap, with the caveat that this list alone will never completely solve this problem.

Employers need to implement equitable policies

Ultimately, private employers conduct hiring, set wages and implement employment policies. Since the status quo is not working, employers would do well to learn how advancing equity would be good for their bottom line. Once they’re convinced, they should go beyond traditional diversity and inclusion efforts, and set organizational policies that truly advance equity in their workplace. A good place to start would be with internal audits to check for racial disparities in wages as well as professional development and advancement opportunities. The Greater Cleveland Partnership has created a library of best practices for companies looking to implement more inclusive, equitable practices.

Support black-owned businesses and entrepreneurship

One reason why the wealth gap persists is because black people and other people of color have historically been denied access to loans and investments to build businesses or purchase real estate – both mechanisms by which the majority white population have built wealth over the past 200+ years. Now that the wealth gap exists, closing it is a huge challenge because wealth tends to build exponentially.

How are people of color to catch up?

This is why it is important to strategically invest in minority entrepreneurs. Racial bias still exists in lending, so unless there are efforts to specifically invest in black businesses and black wealth building, it is unlikely to occur naturally. Along these lines, the Urban League of Greater Cleveland runs a Small Business Development Center; the State of Ohio has a Minority Business Enterprise (MBE) program which offers financial and technical assistance to qualified minority-owned businesses; and the Economic & Community Development Institute Cleveland offers small business loans to disadvantaged people and communities.

Develop career pathways for young people

Cleveland is one of five cities that The Annie E. Casey Foundation selected for its new Generation Work initiative, which seeks to “build quality career pathways for young people of all backgrounds” with a focus on careers that are in-demand locally. Local organizations, Towards Employment and Youth Opportunities Unlimited, are key partners in this work, which connect young people to careers that will help them thrive in the future. According to our research last year, black youth in Cuyahoga County are disproportionately likely to be ‘disengaged’ – neither in school nor employed – and are therefore a target population for workforce programs such as Generation Work.

Generate solutions for spatial mismatch

The recently announced initiative of the Fund for Our Economic Future, The Paradox Prize, points to a glaring problem in our local economy: jobs are far from where the people live. The fund will invest up to $1 million to support innovative ideas to help connect people to jobs in our region. Since black Cuyahoga County residents are more than twice as likely as white residents to rely on public transportation to get to work,[1] initiatives like this have great potential to positively impact employment opportunities for black people in the county.

This is the fifth blog in a series responding to the infographic report on racial disparities in Cleveland that I authored in December. Go back and read the first blog on infant mortality, the second blog on racial disparities in childhood, the third blog on juvenile justice and the fourth blog on criminal justice.

I would like to thank the following people who shared their knowledge and perspectives with me as I researched this piece: Bishara Addison, Towards Employment; Erika Anthony, Cleveland Neighborhood Progress; Sara McCarthy and Janine Spadafore Kaiser, Fund for Our Economic Future

[1] U.S. Census Bureau, 2013-2017 ACS 5-Year Estimates, Table S0802