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We won’t have a true economic recovery until we tackle the racial wealth gap

September 1, 2020, 4:01 PM UTC

A global conversation about diversity and inclusion is growing to a roar no one can ignore. Yet still we do not see enough meaningful action from those in a position to drive real change. 

Business leaders and shareholders must lead the charge, for the good of society and the competitiveness of their businesses and our nation. The economic impact of an equitable workforce is significant.

The coronavirus health crisis has provided visibility into how disproportionately vulnerable lower-income individuals are in our society—as an already pronounced racial wealth gap continues to widen. While there are outliers, we have unfortunately left major demographic groups behind, even disenfranchised them. We are at a tipping point; we can create a more level playing field by working together, or risk slipping further behind.  

Closer public and private partnership

Complacency and lack of action by both business and government are to blame, and together we must fix those issues. Governments and businesses must move toward a new form of inclusiveness with built-in trajectory and compensation mechanisms for those who today benefit the least.

A major challenge for people of color to rise in economic class is the availability of social advocates—mentors within their communities, from early education, to home life and the workplace. These issues bleed into our education systems. It is hard to motivate young students who feel their future is already written for them. Youth must visualize the options for their future, and feel anything they dream is attainable. Community role models support that vision. 

In secondary education, corporations and universities must work closer to identify skill sets most in demand, so schools can invest in teaching the skills that will best prepare students for the workforce—a campaign that should include community colleges and trade schools. 

Training and reskilling talent in the workforce provides pathways to managerial roles. Companies must look harder to spot the talent in their organizations, and open pathways through coaching and mentorship. Formal mentoring boosts minority and female representation in management. At Harman International, where I was CEO from 2007 until earlier this year, we developed numerous career development programs that enhance diverse representation in management roles. These programs rely heavily on allyship, coaching, training, guidance, and support of leaders and colleagues. 

The way corporations hire must also change. The talent is there, we need to do a better job of finding them through nontraditional channels. Public and private sectors must work together to ensure a more even distribution of wealth. 

Establish targets

Where do we start? I think we have to start at every end, and meet in the middle. Start in the boardroom, in the conference room, in the classroom, and in the living room. 

Goldman Sachs stepped up earlier this year with a strong position to support gender diversity, stating they will not bring a company public if they do not have at least one female director. We need similar benchmarks that bring more people of color, and more people from diverse cultures, into our boardrooms and our conference rooms. Diversity benefits all. I benefited immensely from the diversity-rich environment of having men and women of color in my teams throughout my professional career. The business community is in a powerful position to create change, and must be a purposeful participant and advocate. 

Access to affordable secondary education is critical. Colleges and universities must evaluate their acceptance procedures and cost structures. Those administering scholarship and grant programs must consider how to reach underserved populations. 

At the end of the day, conversation must start in the home. We all must diversify our consumption—seek out new voices with varying perspectives across news, podcasts, and entertainment. Each of us has an obligation to befriend people who are different from us and invite them into our homes.

Our children grew up in multiple countries and attended international schools where people from 30 to 40 nationalities learned together. My wife and I understood and challenged our hidden biases when our children introduced us to friends who were different from them. My wife and I learnt a great deal about race, caste, and social boundaries. I am convinced that a solid foundation of racial and gender equality and mutual respect starts from early childhood, and it starts from home and early schools.

Ongoing activism and advocacy 

We can’t let this be just another short-lived civil rights movement and a moment in time. When the media stops paying attention to the daily headlines, let us not stop paying attention to our own daily actions. Each of us, not only the business and political leaders, have a role to play as changemakers. The future of our businesses, our economy, and our nation relies on us today to be allies for our neighbors. Talk is cheap: Let’s step up and drive real, continuous, and ongoing action. 

Working together today, we can begin to repair the damage of decades of disenfranchising minority groups. Equality is not about philanthropy, it’s about integrity. It’s not about compliance, it’s about competitiveness. Unlike other issues, this will not pass, and we must do better. 

Dinesh Paliwal (@dineshcpaliwal) is a board member of Bristol-Myers Squibb, Nestlé, and Raytheon Technologies, and former chairman and CEO of Harman.