Economic Inequality in the Workforce

Posted on by DeniseMpls

Have you lived paycheck-to-paycheck for a long time? Does it feel like most of the people you know are also struggling with money — even those with “good jobs?”

Your money troubles are not (completely) your fault.

Economic disparities refer to unfair conditions and systems in our economy. Because of outside forces, members of some groups of people have a harder time achieving financial or career success than people in other groups.

Economic inequality has three types:

  • Income Inequality — Uneven distribution of pay, benefits, and investments in a group of people
  • Pay Inequity — Differences in hourly, monthly or annual payments for employment between people or groups.
  • Wealth Inequality — Amount of individual or household financial assets such as stocks and bonds.

The economy and job market in the United States is set up so that People of Color/Indigenous Peoples, people from low-income backgrounds and members from a few other groups will always have a harder time gaining access to higher-paying occupations and to wealth-building opportunities. People in other groups “naturally” end up on top.

For example, it’s been well documented that, as a demographic group, White men earn more money than Black and Hispanic men, and more money than women from all ethnic groups.

This does NOT mean that your hard work will not pay off. Each person’s career and life journey is different. You will be able to buy a house, or a new car, or get out of debt, or finish college, or help your children pay for their college, or whatever your financial goals are.

You have the right and the ability to achieve whatever career goals your set for yourself. It just might take you longer or be more difficult than someone from another group.

What You Need to Know

1. Focus on Livable Wage Not Wage Discrimination
Wage discrimination is purposely confusing. You probably don’t know how much other people get paid for jobs that are similar to yours. Instead of attempting to compare your income to others, compare your pay to what is considered a “livable wage” in your region. A livable wage, or family-sustaining wage, is the amount of money you need to earn to pay for you and your family’s basic needs. Livable wage amounts change based on where you live because the cost of groceries, housing, gas, etc varies across the country. Use this Livable Wage Calculator from MIT to find out how much you need to earn to live comfortably in your state, county or city.

2. Think About Job Quality Not Just Pay
All jobs offer more than just a paycheck. You want a position where you feel respected, are able to use and learn new skills, and you generally like the job. A “good job” also offers a livable wage, health care and other benefits, shifts and hours that fit your schedule, and is long-term or offers job security that meets your goals. “Bad jobs” are easy to come by — they are often entry-level positions and are typically low-skilled or do not require training or a degree to start. Low-skilled jobs that do not offer big paychecks or any benefits are OK for a short time. Make a career plan that includes ways for you to gain the qualifications needed for the “good job” of your choice. It might take several years to get to your goal, but you do not want to work in low quality jobs forever.

3. Do Not Give Up On Your Goals
The good is that there is currently a low unemployment rate in the U.S. The bad news is that the unemployment rate does not count the number of people who are underemployed (not making enough money, forced to work more than one job, or working in a job that does not fit their career goals). The unemployment rate also does not include discouraged workers — people who have given up on looking for a job. Young people, Black and Hispanic people are more likely to be discouraged workers than other groups. Do not let economic inequities keep you from going after your goals. Know your Professional Identity, Make a career plan. Review your plan often. Congratulate yourself when you complete a task or move forward. Accept that it might take a while to reach your goals, but do not give up. When you achieve your career or financial goals, you are not just showing yourself how strong you are, you are becoming a role model for your family and the people in your community.

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