McKinsey has just issued a report on Race in the workplace: The Black experience in the US private sector. According to the report, “advancing racial equity in the workplace is a system-level challenge—ranging from the structural inequities of geography to underrepresentation in industries and jobs that could create additional opportunity to the behaviors of the workplace itself.” Among the racial equity challenges highlighted in the report are the following:
An underrepresentation of Black workers in the most lucrative industries where wages are relatively high,
An underrepresentation of Black workers in jobs that pay on the high side,
An underrepresentation of Black workers in executive positions, and
A lack of advocacy by management for Blacks to advance to high managerial and executive positions.
The contents of the report are interesting for two primary reasons, rendered more poignant within the context of Black History Month that has just come to a close. Why interesting? Because the challenges mentioned correlate with elements I have noticed in my professional experience and academic journey in America. I will skip my professional experience for the time being and focus on my academic journey.
The McKinsey report contains parallels with my doctoral research findings of a few years ago. My study was on “strategies that some leaders of minority-owned small businesses use to compete for contracts in high-revenue industries.” In laying out the foundation of the study, I delved into the landscape of ethnicity and small businesses. I discovered, among other things, that minorities were indeed underrepresented in lucrative, high-revenue industries. This, of course, translated into a gap between their earnings and those of their nonminority counterparts. Below is a representative table I put together as part of my study:
What the table shows, in summary, is the underrepresentation of minority-owned small businesses (26%) in the top 7 high-revenue industries. It also shows that, on average, for every dollar they earned, their nonminority counterparts made $3.
What are the factors behind the representation and earnings discrepancies? Based on my findings, there are quite a few. Discrimination is one such, which has been scholarly substantiated. Blacks and other minorities face regulatory, demographic, and other challenges because of discrimination. According to the Minority Business Development Association, discriminatory behavior against minority-owned business leaders exists where race is a statistically significant predictor of business formation disparities, access to capital, and owner earnings. Here are some specific examples:
Access to markets and industries: Although some leaders of minority-owned firms typically have the right combination of skills, knowledge, and experience to run successful operations, they remain excluded from accessing lucrative business opportunities.
Access to finance: Bank lending practices constitute one of the broad areas of institutional challenges that minority-owned small business leaders face. So do the attitudes of non-banking financial capital avenues like funding from venture capitalists. Limited access to capital and predatory lending hinder the ability of minority-owned small business leaders to generate production and sales.
Preconceptions: Some large contracting companies, usually nonminority-owned, tend to shy away from considering minority business owners for jobs in some lucrative industries. Contractors of these large contracting companies sometimes have unfounded notions that minority business owners are unable to handle large corporate contracts.
Despite the challenges, Black business owners have been finding ways of advancing their businesses by successfully overcoming the obstacles they traditionally face. In my doctoral study, I show the strategies some of these owners have employed to get ahead of the game and remain profitable. If you are interested in receiving a full summary of the findings of the study, please send an email to info@jonstarconsulting.com.
Comentarios