Policy Recommendations and Private Sector Solutions to Address Gaps Negatively Affecting Black Americans
Published
July 06, 2020
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The U.S. Chamber of Commerce launched the Equality of Opportunity Initiative in June 2020 to develop real, sustainable solutions to help close race-based opportunity gaps in four areas: education, employment, entrepreneurship, and criminal justice. Systemic inequalities in these four areas perpetuate broader inequalities in our society, hold back individual and business success, and hinder economic growth.
Driven by data and informed by conversations with business, government, academic, and civic leaders, in July 2020 we developed this initial Equality of Opportunity Agenda to advance private sector solutions and best practices, scale impactful programs, and drive policy action at the federal, state, and local level.
We also will continue to identify and advance other solutions to help close the equality of opportunity gaps.
Together, we can—and we must—turn national dialogue into nationwide action. We are committed to reclaiming and reaffirming the American promise of equal opportunity for all.
Closing America's Education Gap
Longstanding race-based education gaps continue to exist at all levels, from early childhood and K-12 to postsecondary education and on-the-job training. These education gaps perpetuate inequalities in employment, income and wealth development.
Black students are twice as likely to attend high-poverty schools than their white peers
Math scores for Black students entering kindergarten are 21% lower than those of white students
Only one in five Black 4th graders are reading on grade level, compared to half of the white students
Only 15.3% of Black students earn a bachelor’s degree, compared to 23% of white students
Too often school funding is more a reflection of the socio-economic status of the local community rather than the needs of students. States should take steps to reduce school-based funding disparities and move towards programs where funding is student-needs based such as through the use of weighted per-pupil formulas.
Federal Policy, State/Local Policy
Closing the education gap requires not just measuring student performance but holding schools and school districts accountable for progress. Federal education programs should support and states should require that schools and districts that fall short of metrics take corrective actions.
State/Local Policy
Local demand for existing school choice scholarship programs and charter schools often exceeds supply resulting in wait lists. States and local governments should recognize the market signals sent by parents and expand school choice programs, especially in areas where parents and students believe that such choices can improve their education.
Federal Policy, State/Local Policy, Private Sector
Every student should graduate high school prepared for numerous paths ahead, whether that is college, a certificate program, or directly to employment. State and local education authorities supported by the private sector should work together to equip all students with the knowledge, skills, competence, and real-world work experiences they need to reach and succeed in the jobs of tomorrow regardless of what path they take after graduation.
State/Local Policy, Private Sector
So-called “soft-skills” like communication and leadership are often as important as hard skills in securing and sustaining gainful employment. The business community should work with education officials to define and implement soft-skills programs in local schools.
Federal Policy, State/Local Policy, Private Sector
Broadband access is a necessity for learning in today’s world. Closing the digital divide will require both government and private sector investment. Congress should develop a national broadband strategy that addresses deployment issues such as funding and permitting as well as connectivity issues. Any successful strategy will require coordination between federal, state, and local officials and the private sector.
Federal Policy, State/Local Policy, Private Sector
Many of the jobs of today and tomorrow require more than a high school degree, but less than a four-year or even two-year college degree. Yet, our nation lacks a way of recognizing, accrediting, and helping individuals access credentialing and other “earn & learn" programs. Working with the private sector, federal and state officials should establish a process to recognize alternative career pathways and provide financial assistance to help individuals access these programs.
Federal Policy
Students and parents often lack credible, independent information regarding educational and employment outcomes at different postsecondary institutions – information that would be valuable before enrolling or taking on student debt. Current federal law makes it difficult to compile such information. Congress should amend the law to ensure greater transparency.
Closing America's Employment Gap
For decades, Black unemployment rates have been consistently twice as high as white unemployment rates. Black Americans are underrepresented among high-earning management positions, and even within the same positions and education levels, Black workers earn less than their white counterparts.
Black Americans represent 12% of the American workforce but only 9% of workers in “high earning management and professional” positions
Within "high earning managerial and professional" roles, the median weekly earnings for Black men is $1,167, 24% lower than the $1,538 earned by white men in high-earning roles
Black and Hispanic workers with a bachelor’s degree and higher have lower median weekly earnings ($1,065 and $1,101 respectively) than Asian and white workers ($1,465 and $1,342).
During the pandemic, Black (23%) and Latinx (24%) workers are more likely than white (15%) and Asian American (13%) workers to have been laid off.
The federal government has certified nearly 9,000 Opportunity Zones across the United States. In addition to being low-income, a majority of the residents of Opportunity Zones are not white. The private sector should launch a broad cross-sector campaign to encourage and coordinate greater, more impactful investment in Opportunity Zones as means of expanding employment opportunities.
Federal Policy
The Federal Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment. To encourage broader employment growth in disadvantaged communities, WOTC should be expanded to cover all local hiring in Opportunity Zones.
Federal Policy, State/Local Policy, Private Sector
Too often job training programs focus on inputs rather than outcomes. Pay-for-performance provides a mechanism to increase accountability and improve outcomes through public-private partnerships where training providers are paid based on whether they are successful in getting individuals into steady jobs. Federal and state job training programs should work with the private sector to expand the pay-for-performance model.
State/Local Policy, Private Sector
Developed by the private sector, the Talent Pipeline Management program seeks to link job training to the skills employers need to fill current and future jobs. The program, which now operates in over half of the states, should be expanded to help underserved communities.
Federal Policy, State/Local Policy, Private Sector
For many Americans, lack of available quality childcare is a barrier to employment, especially in low-income communities. Federal, state, and local officials should work with the private sector to streamline and provide support for the expansion of childcare in underserved communities.
Private Sector
Personal business networks are especially important to those starting their careers but many minorities lack access to such opportunities. The private sector should work to create more pathways, such as internships and apprenticeships, for minorities.
Closing America's Entrepreneurship Gap
Black Americans are underrepresented among entrepreneurs, and Black-owned businesses tend to have fewer employees and less revenue than white-owned firms. Black business owners struggle to access capital for their ventures.
Black Americans represent 12% of the labor force but only 9.4% of business owners
Black-owned businesses tend to be smaller, as well. Companies owned by whites average annual sales more than double those of firms owned by Blacks
Black-owned businesses are less than half as likely to get financing as white-owned firms and nearly three times more likely to have profits negatively impacted by a lack of capital
Larger businesses can help support Black entrepreneurship by focusing on diversity in their supply chains. Utilizing a data-driven approach, the private sector should establish best practices and resources to increase the participation of minority owned enterprises in corporate supply chains.
Federal Policy, State/Local Policy, Private Sector
Federal, state, and local governments as well as private entities operate minority business certification programs for Black and other underrepresented businesses. The requirements, process, and cost for certification vary widely. Establishing a streamlined and uniform process will make it easier for these businesses to receive and benefit from certification.
State/Local Policy
Nearly 1 in 4 jobs today require a state occupational license. Licensing requirements, including which occupations require licenses, vary widely throughout the United States. These licenses are often costly and time consuming to obtain and many instances offer little benefit to consumers. License requirements can pose an especially significant barrier for Black entrepreneurs. States should work to eliminate unnecessary occupational licensing requirements while reducing the cost and time burden for those that they retain.
Federal Policy, Private Sector
The U.S. Department of Commerce’s Minority Business Development Agency (MBDA) is the only agency in the federal government whose sole purpose is to support, expand, and create opportunities for minority-owned enterprises. Congress should provide additional support to the MBDA and the private sector should work to partner with the MBDA to expand programs to assist minority owned businesses.
Federal Policy, Private Sector
Lack of access to capital is a significant problem for most entrepreneurs but is especially acute for Black entrepreneurs. Following the model of the successful 2012 JOBS Act, Congress should initiate a formal process through the SEC to develop recommendations for changes in existing law and regulations that would improve access to capital for Black-owned businesses.
Federal Policy, State/Local Policy, Private Sector
Entrepreneurship opportunities can be limited for individuals exiting prison. Building on successful state and local programs, Congress should create a program within the SBA to award grants to organizations to provide business counseling and entrepreneurial development training to returning citizens.
Addressing Inequality in Criminal Justice
Black Americans are more likely than white Americans to be arrested; once arrested, they are more likely to be convicted; once convicted, they are more likely to experience lengthy prison sentences. A prior conviction makes reentry into society and the economy disproportionately challenging for Black Americans.
Black Americans represent 27% of arrests and 40% of the incarcerated population, more than double and triple their proportion of the American population (13%), respectively
Unemployment rates for formerly incarcerated Black males and females are 28 and 37 percentage points higher, respectively, than the rate for Black males and females overall. The “prison penalty” jobless rate increase for white males and females are 14 and 19 percentage points, respectively.
Having a prior conviction reduces employer callback rates by 65% for Black male job applicants versus a 50% reduction for white men.
Current federal law prohibits those in prison from accessing federal financial aid programs. Allowing the incarcerated to utilize Pell Grants to pursue educational opportunities while serving time will improve rehabilitation, reentry, and post-prison job prospects.
State/Local Policy
Nearly 1 in 4 jobs today require a state occupational license. A prior criminal conviction can by itself prevent a person from receiving a license. In half of the states a license can be denied regardless of how long ago the conviction was or whether the crime is relevant to the occupation. Reform should more narrowly target any restrictions and provide a means to recognize rehabilitation.
Federal Policy
The federal government imposes various employment and licensing restrictions, especially in banking and financial services, on those with criminal records. In some cases, for example bank employment, the conviction need not be related to the occupation in question. Reform should more narrowly target any restrictions and provide a means to recognize rehabilitation.
State/Local Policy, Private Sector
Requiring disclosure of a past criminal conviction on an initial job application has been shown to lead to otherwise qualified candidates becoming excluded from the hiring process. All employers should review their hiring practices with regard to delaying inquiries about a criminal record until later in the process. Many states and localities already have passed so-called “ban-the-box” laws—the remaining states should consider doing so as well.
Private Sector
Employing the formerly incarcerated can present its own challenges, but also opportunities for businesses. The replication of best practices, such as those developed by the Society for Human Resource Management can help employers to confidently hire employees with a criminal background.
State/Local Policy
In over 40 states, individuals can lose their driver’s license over unpaid fines or fees. Given the vast majority of Americans have to drive to get to work and many drive for their work, loss of a license can mean loss of a job and/or greater risk for arrest on charges of driving without a license. States should end debt-based driver’s license suspensions.
Federal Policy, State/Local Policy
Approximately 70 million Americans have an arrest or conviction record. While many are for low-level offenses that are eligible for expungement, the process can be complicated and costly. Congress and the states should simplify the process for sealing or expunging certain non-violent and low-level arrests and convictions by making it automatic one year after a person has fulfilled their legal obligations without re-arrest or conviction.
