Solving economic insecurity by focusing on Black women

By Susan Rupe

“When you do right by Black women, you fix the problem of economic security for everyone else.”

Kilolo Kijakazi, deputy commissioner of the Social Security Administration’s Office of Retirement and Disability Policy, recited this quote from Janelle Jones, chief economist and policy director for the Service Employees International Union, in her personal observations of Social Security policy issues.

Kijakazi spoke during this week’s Employee Benefit Research Institute-Milken Institute 2024 Retirement Symposium.

“Unless and until you focus on racial, ethnic, gender and other discrimination in employment, we will not succeed in protecting the economic security of Black women. And we will all be the poorer for it,” she said.

Achieving security in the employment years

The key to a secure retirement for Americans is to achieve economic security during their employment years, Kijakazi said.

“If we are not economically secure during our working lives, it is very unlikely that we will be economically secure when we become elderly and deserve to just rest,” she said.

But economic disparities between genders and racial groups continue to put up barriers to security in Americans’ working years and in their retirement years, Kijakazi said. She presented two schools of thought on why economic disparities exist.

The first school of thought, the deficit model, says the individual is the source of economic disparity. “He didn’t work hard enough, or she didn’t save enough,” Kijakazi said.

“Too often, the proposed solution is that we need to provide education to those who are economically insecure, or the popular solution is to teach people to save through financial education,” she said. “Now, why is this such a favorite? Because it's easy. It puts all the onus on the individual and holds no one and nothing else accountable for change. And it’s low cost. It requires no investment, other than the production and dissemination of financial education information.”

Kijakazi said that as a Black woman, “this emphasis on education is particularly galling to me … because these admonitions to get more education, and more financial education are frequently if not typically directed to Black people. Black people were the only people for whom it was illegal in this country to obtain an education. And we did it anyway.

“If a lack of education were the real root cause of economic disparities, we would have solved that a long time ago.”

The second school of thought, she said, is that policies, programs and institutional practices advance the economic well-being of some groups, while creating structural barriers that impede the economic well-being of others.

“We can see this in the form of labor market barriers that particularly impede Black women,” she said.

Kijakazi cited Harvard University research that showed Black women have consistently had higher rates of labor market participation than white women, yet they typically experience higher rates of unemployment than both white men and white women at every level of education. Similarly, Black women are paid lower wages than white men or women at every level of education, and Black women are usually paid less than white and Black men and white women in every occupation.

“In 2019, the Institute for Women's Policy Research estimated that, ‘If change continues at the same slow pace as it has done for the past 50 years, it will take 40 years -or until 2059 - for women to finally reach pay parity. For Black women, it will take a century,’” she said.

Occupational segregation is a challenge for Black women

Another factor leading to financial and retirement insecurity in Black women, Kijakazi said, is occupational segregation – the over-representation of a group in an occupation.

“This has resulted in Black women being more represented in occupations in which employers do not provide pensions or retirement savings plans, especially not matched savings plans,” she said. “This leaves Black women more exposed to poverty in their senior years.”

She added that, as a result of lower lifetime wages and lower rates of access to employer sponsored retirement plans, older Black Americans less likely than whites to be economically secure when they retire. Because earning histories determine the Social Security eligibility and benefit level, Black Americans receive a substantially lower benefit than white Americans on average.

“Despite a lifetime of working, African American workers are more likely than white workers to face poverty in their senior years, even after receiving Social Security benefits,” she said.

What is the solution to the problem of economic insecurity?

“First, don't do the same thing and expect a different result,” she said.

“We need policy solutions that address the root causes of economic insecurity and labor market barriers. We need to hold accountable anyone or any entity practicing racial, ethnic, gender or other employment discrimination. Private sector employers need to hold themselves accountable for any discrimination occurring in their places of business, identify it, measure it, eliminate it.

“Also, private sector employers need to hold each other accountable. The public sector must not give the private sector a pass, but instead hold these employers accountable. And the public sector must police itself and eliminate any employment discrimination in its institutions.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on X @INNsusan.