How companies can use benefits to address the racial wealth gap

But first, here’s your bigoted-nonsense week in review in Haiku.

I would like to see
your LSAT score, your college
admission essay

I weep for the blonde
haired refugees who
deserve better than

What about the real
girls! They can’t compete like this
we need to protect

Books are dangerous,
impressionable youth must
be carefully taught

Every day is a
chance to breathe, think, do better.
Don’t be a Tucker.

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Wishing you an open-minded and joyful weekend.

Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com

In brief

John Branam understood the racial wealth gap because he was born into it.

“I grew up as a poor Black boy in America,” he says simply. His Black father was a janitor who pumped gas for extra money, and like the vast majority of Black veterans, was denied access to his G.I.Bill benefits. When the elder Branam died, he left virtually nothing behind. His son worked hard and got lucky. Now, he and his wife own a beautiful home and their kids attend a well-resourced school. “Building and accumulating wealth has been a very difficult one and very painful,” he says. “It shouldn’t have been this hard.”

Branam is the executive director of Get Schooled, a non-profit he describes as America's only all-free, all-digital, personalized college and first jobs counselor. The national ratio of high school, college, and career counselors to students is around one to 450, he says. “And so what that means is if you're a Black or brown, first-generation immigrant kid in America and you aspire to go to college, you have to get in line behind 450 other kids in order to get the help you need.”

But he also runs a company.

In a recent LinkedIn post, Branam discussed a new plan to address the racial wealth gap in the U.S. by offering a unique set of benefits for all non-director level Get Schooled employees who may live in the gap as he once did:

• ONE—We’ll contribute $5K towards the purchase of employees’ first homes. We're committed to helping staff gain access to America’s wealth wedge: homeownership.
• TWO—We'll contribute a lump sum of $2.5K towards their retirement account, in addition to our current 3% monthly contributions. Saving for retirement helps build real wealth and can be a catalyst for homeownership.
• THREE—We’ll contribute $1K towards repaying an employee’s student loans. Especially for many Black and Brown folk, student loans often are not at lower interest rates, and we hope making a modest dent can be motivational and helpful.
• FOUR—We’re making a financial advisor available to all employees. And while this is common for larger companies, we’ve secured an advisor whose personal background is culturally similar to that of most of our younger employees—increasing their likelihood of comfort and engagement.

I asked Branam to walk me through the process by which they landed on these benefits and to offer any advice he had for larger organizations that wanted to consider them.

Branam said it started for them at the hiring level. Get Schooled has 14 employees, a modest budget, and a big vision. But mission alone doesn’t ensure that you’ll create a company comfortable with inclusion work. So, they explicitly recruit for it. “Your team will help shape the organizational culture, right?  So, we seek to attract employees that are going to be open and supportive of not only helping us to achieve our mission but contributing to this organizational culture in which we are lifting up our employees.”

Then, they roll up their sleeves. He describes a series of pre-conversations, retreats, and feedback sessions where the staff weighed in what would be most meaningful in the context of their lives. Homeownership was a big one. Investing in 529 college tuition plans? The mostly millennial staff said to hit pause. “They said ‘Global warming, duh! We’re not having kids,’ and I was like, ‘okay, I hear you, for now.’” But because everyone understood the larger problem the benefits were trying to solve, “there was a spirit of celebration that we were making these investments or exploring them.”

Branam refers to the benefits as “investments,” which hit my ear as a form of reparations. He does think of them that way. “Part of the reason why we're making these investments is because I want to help contribute to shifting the narrative and the conversation in this country about investing in Black and brown folks.”  

So, what advice does he have for leaders in other companies and industries that haven’t thought about benefits as a tool to address the racial wealth gap—and are worried about white resentment?

Start by getting real, he says.

“I think it behooves organizations to be very honest about where they're at in the journey, even if that's like not even quite yet at the starting line.” That kind of systemic introspection takes time. “[They need to be] very plain-spoken about the aspirations that they have, hopes that they have, what they hope might be possible by doing this work, and then start on the journey and to stay committed to it. Even if it's not a linear path.”

And avoid the trap of exclusion. These investments can and should be for anyone with the unique pre-conditions of having been left out of the wealth-generation machines available to majority culture folks, many of whom just happen to be Black, brown, immigrant, or from rural areas. “These investments are useful in their familial trajectories, regardless of the employee's race,” he says.

And they’re working.

“About an hour ago I got a Slack message from a Black woman on our team—early thirties—who just had her first offer accepted on a home using our money.” Branam, the son of a man who had been locked out of the U.S. financial system is beaming. “Oh my God. Amazing. Honestly, just amazing. That investment, as you and I both know, can have a transformational impact on the rest of her life.”

On background

Let's look at a typical Black college student graduating this spring  They will hold an average of $52,000 in student loan debt, some $25,000 more than their white peers. Their white counterparts were raised in families that likely held twelve times the wealth of their own. And even if they were lucky enough to live in a home of their own, their proud parents were likely to be just the latest generation who had been relegated to sub-standard, low-equity communities, thanks to federal housing policies that had been enforced throughout the 20th century.

The college debt problem, in Black and white  Two expert sociologists, Louise Seamster and Tressie McMillan Cottom team up on this special episode of The Ezra Klein Show, to explore the policy roots and solutions associated with student loan debt. Specifically, the impact of a pre-existing wealth and future income gap that leaves Black students disproportionately more burdened by student loans. Seamster is an expert in wealth creation; her research formed the cornerstone of Senator Elizabeth Warren’s loan forgiveness plan. Cottom, well known to raceAhead readers, is a writer who focuses on higher education, policy, wealth, and beauty, among many other topics.
The Ezra Klein Show

Yes, redlining still needs to be addressed  Redlining, the practice of lenders to deny certain communities access to affordable capital based on race, is still very much a thing. This story explores the 2015 HUD settlement with Wisconsin’s largest bank for discrimination against Black and Hispanic mortgage borrowers in Wisconsin, Illinois, and Minnesota from 2008 to 2010, people who were exactly as credit-worthy as white borrowers on the other side of the red line. But the story is a reminder that historic redlining, which began in the 1930s, is an integral part of the American experience for many people. “If your family was denied a mortgage in the 1930s, or the 1950s, or the 1970s, then you may not have the family wealth or down payment help to become a homeowner today.” 
Washington Post

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