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May 15, 2015
Four Ways to Lift Up Women of Color in the Workforce
Ensuring the economic success of women of color has never been more crucial to America’s future. Though women of color make up a large and growing share of the workers, breadwinners, and entrepreneurs that are driving local and regional economies, they are consistently paid less than all other groups of workers — White women, men of color, and White men [see graph above]. Further, women of color are all too frequently employed in low-wage jobs that fail to provide family-supporting wages or basic benefits such as paid parental and sick leave.
“More than 70 percent of women of color are either the sole or co-breadwinner, making their economic security inextricably linked to that of their family,” said Fatima Goss Graves, vice president for education and employment at the National Women’s Law Center.
Tackling the disparities in pay and employment facing women of color will require policies at the national, state, and local level that link these women to the education, workforce training, business support, and work opportunities necessary to thrive. Several cities and states have taken pioneering steps to enact the types of policies and programs that lift up women of color workers, providing models for other local, state, and federal initiatives. These local successes center around four policy priorities:
- Improve the quality and wages of low-wage jobs: Because women of color are disproportionately employed in the low-wage sector and live in or near poverty, strategies to raise the floor on low-wage work can have immediate impact for these women and their families. Effective policies to raise the floor include those that encourage workplaces to invest in their workers (e.g., programs that upgrade workers’ skills and pay) or make it easier for workers to organize and collectively bargain for better pay and working conditions. “You are seeing some companies recognize the value of investing in their workers — that it is valuable for workers to feel good about their workplace and be able to fill their roles at home,” Goss Graves said.
Policies that directly establish higher standards for wages and working conditions, such as increasing minimum and living wages, eliminating the sub-minimum tipped wage, and providing paid sick leave, child care supports, and retirement savings are also vital to increasing the pool of quality low-wage jobs. In September 2014, after a two-year campaign by community, labor, and civil rights groups, the Los Angeles City Council approved a living wage ordinance to raise the minimum wage for the city’s hotel workers to $15.37 an hour. This will raise pay for 13,000 low-income hotel workers, most of them women and people of color.
- Create pathways for women of color to access good jobs: Women of color often face barriers to accessing “middle-wage” jobs that offer career pathways but do not require a four-year degree, such as those in construction or some health care. Targeted and local hiring policies for public investments can increase access to middle-wage jobs for women of color, as can workforce training strategies that connect women of color to apprenticeship programs and workforce training programs in high-growth industries.
The Washington State’s Home Care Worker Training Partnership is the nation’s first large-scale career pathway program for home care aides, training 40,000 aides a year in 200 classrooms across the state and online, providing instruction in 13 languages. The partnership runs the nation’s first registered apprenticeship for more advanced training so that aides can increase their earnings and move up the career ladder.
- Support women of color to become entrepreneurs: Despite many barriers to quality employment, women of color are the fastest-growing segment of entrepreneurs and job creators, numbering 1.4 million workers and generating more than $220 billion in revenues in 2013. At the same time, numerous studies show that women of color have a harder time getting business loans or equity investments than their White and male counterparts. Policies that increase access to affordable capital, support business development for entrepreneurs of color, and leverage government procurement policies to link women of color-owned businesses to government contracts are all effective strategies for supporting these entrepreneurs, and helping them create employment opportunities within their communities.
The New Orleans Regional Transit Authority has dramatically increased contracting with firms owned by women and people of color from 11 to 31 percent as part of a new commitment to equity.
- Ensure girls of color can succeed in school and access science, technology, engineering, and math (STEM) education and careers: Higher education (at least an associate, if not a bachelor’s degree) is a critical stepping stone for success in the 21st century job market, but girls of color often face challenges accessing high-quality preK-12 public education and are more likely to attend schools that lack STEM-related courses. Many girls of color are also subject to overly harsh school discipline measures that result in disproportionately high rates of suspensions and expulsions, reducing their learning time and ability to thrive in school, according to Goss Graves. Policies to eliminate the use of harsh school discipline measures, increase access to high-quality public education and STEM courses, and supplemental programming that exposes girls of color to STEM-related skills and experiences are key to setting girls of color on a track toward later career success and financial stability.
Black Girls CODE is a San Francisco-based nonprofit dedicated to training and empowering girls of color to become leaders and innovators in computer science and technology. In the three years since its founding, it has served more than 3,000 girls ages seven through 17 and opened seven chapters around the country.
For more data on women of color in the economy, such as the percentage of people of color who earn $15 an hour or more, see the National Equity Atlas.
Preventing Predatory Payday Loans in Alabama: An Interview with Mike Milner
Over the last 10 years, payday lenders have proliferated within low-income communities nationwide, advertising themselves as a quick and easy way to make ends meet. In reality, these loans, with onerous fees and interest rates in excess of 100 percent, cost low-income workers billions a year, and often trap borrowers in a long-term cycle of debt.
Despite their predatory nature, these lenders can seem a necessary service to cover expenses for those who lack access to traditional financial products and are trying to get by on paychecks that are too small to begin with.
President Obama recently traveled to Birmingham, Alabama, to announce that the federal Consumer Financial Protection Bureau will propose new rules to limit the predatory practices of payday lending. While this is welcome news for many, some aren’t waiting for federal rules before taking local action.
One organization at the forefront of this fight is the Alabama Asset Building Coalition (AABC). Among AABC’s many areas of work is challenging the predatory nature of the payday lending industry in the state through consumer education and legislative advocacy. America’s Tomorrow spoke with AABC’s Executive Director Mike Milner on how predatory payday lending has been stripping wealth from Alabama families.
How does predatory lending affect the Alabama economy?
$48 million is pulled out of the state of Alabama annually through the payday lending industry. For every $1 that is paid to a high-cost lender, $2 is taken away from the local economy due to lower consumer spending and additional debt burdens leading to bankruptcy.
Dr. Lonnie Hannon III at Tuskegee University has researched the impact of payday lending in Alabama, particularly in communities of color. He showed that payday lenders target low-income communities of color because they don’t have the best credit and are considered easy pickings. The challenge with this population is that because of their lack of income, payday loans were being used to make ends meet, as opposed to being used for an emergency.
When did payday lenders come to Alabama?
Payday lending came to Alabama in 2003, when the state legislature created the Deferred Presentment Services Act, which allowed for up to 436% APR on these small loans. That means that a $500 loan could cost a person over $2,000. Originally the law said that the borrower cannot have more than one $500 loan open at a time; however there was no process set up to verify any outstanding loans. A borrower would borrow $500 here and then maybe two weeks later go down the street to borrow another loan. The normal customer has at least five loans. People were owing thousands of dollars and using their entire paycheck to refinance these loans, driving many people into bankruptcy, having already low wages garnished, and more.
I live on the eastern part of town in a nice middle-class neighborhood. Within a mile radius, there was a thriving area with grocery stores and restaurants, a very popular area. Then the payday lenders moved in and in many cases, they would move in right next to each other. There might be 14 or 15 of them in one neighborhood. Eventually other retail stores started moving out, grocery stores started closing. The commercial bank moved out, payday lenders moved in. This was a booming area years ago — the negative economic effect of payday lenders has been devastating to the community.
Why did you choose to focus on payday lending?
We held listening sessions all over Alabama, talking to individuals and businesses about what they needed to build assets. As we talked to low-income people, payday lending became more prevalent. It was the opposite of asset-building, it was asset-stripping out of communities. This issue is just as important as teaching someone how to save. Low-income people really need to be in the mainstream of financial services for their borrowing and lending. The problem is that the payday lending industry targets those with less access to credit and who tend to be the most vulnerable. So we began our campaign three years ago to try to increase consumer protections through the state.
How are you addressing payday lending?
Out of all of this we created a policy organization, the Alliance for Responsible Lending in Alabama, which includes a number of powerful organizations, such as the YWCA, AARP, and NAACP.
To date, we’ve been able to get an administrative ruling from the State Banking Department that ensures borrowers are not taking out multiple loans at once. That rule is set to go into effect in June of 2015.
Overall, we see our role as being the educators on the issue. We have explained to folks across the state the challenges of payday lending. We also developed a 101 booklet and a video, explaining the issue. We use those as educational training tools, we work with our partners to have town hall meetings and workshops across the state.
What are you planning for next?
We’re hopeful for having new legislation that in some way reduces the interest rate. In the meantime, we believe that we have a responsibility to educate the community and to look at alternatives to payday lending that doesn’t gouge people.
How does this relate to the national conversation on predatory payday lending? What can be done to address this problem?
President Obama came to Birmingham, Alabama, a few weeks ago to announce the rule currently under consideration at the Consumer Financial Protection Board regarding payday lending. Before his announcement, he met with our group. We were very honored.
I’m excited about the proposed new rule, especially the affordability piece. Anything that can be done on a national level that would reduce the number of payday lending institutions, or push them out of the business. I think that is something that would help reduce the number of people using payday loans.