More and more employers are considering race, ethnicity and gender when analyzing financial health. Explore how financial wellness might help close wealth equity gaps.
We are in the midst of what might be considered a significant social justice movement centered around race since the civil rights era.
One difference between then and now, however, is the number of employers coming to realize that diversity, equity and inclusion (DEI) challenges may be addressed, at least in part, through financial wellness programs.1 To understand why, it may help to consider some historical disparities that persist to this day—and some strategies organizations are considering in response.
Addressing the Wealth Gap
Data from the 2022 Survey of Consumer Finances (SCF)2 reveals long-standing and substantial wealth disparities between families in different racial and ethnic groups. The typical White family has about six times the wealth of the typical Black family and five times the wealth of the typical Hispanic/Latino family. Although these wealth ratios have narrowed since 2019, income disparities have widened. Meanwhile, median net worth gaps remain significant. While the median net worth of White families was $285,000 in 2022, Black and Hispanic/Latino families held just $44,900 and $61,600, respectively.
To address the wealth gap, employers are increasingly offering holistic financial wellness programs designed to enhance employee education around a wide variety of topics, such as debt management, budgeting, saving, retirement planning and more.3 For more personalized guidance, employers may consider providing access to a financial planner or Financial Advisor who can meet with employees individually to discuss their unique financial needs.
To take it a step further, consider offering equity compensation benefits, such as employee stock purchase plans, incentive stock options and performance shares. More companies are trending toward offering this option to all employees rather than just to management and executive teams.4 This approach may be particularly helpful given that the percentage of White employees who own stock is roughly 66%, compared to 35% for Black employees and 28% for Hispanic and Latino employees.5