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Article Addresses How The Advancement Of Black Women Will Build A Better Economy For All

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Article Addresses How The Advancement Of Black Women Will Build A Better Economy For All

NEW YORK (S&P Global Ratings) June 11, 2021--As the U.S. continues to grapple with the issue of racial inequality, S&P Global analysis shows that disparities in opportunities--specifically for Black women in America--carry a significant cost, not just from a social aspect but also for the economy overall. In simplest terms, the inequalities Black women face have been a drag on both their bank accounts and on long-term economic growth for everyone.

See our report, "How The Advancement Of Black Women Will Build A Better Economy For All."

In a word, the economic cost of the certain educational and professional gaps is astounding. Given that higher education correlates strongly with higher wages, we found that if educational attainment among Black women had kept pace with that of white women from 1960-2019, the U.S. would have generated an additional $107 billion in economic activity. Factor in the historic underemployment of Black women, and the results are even more startling. If Black women had not only kept pace in achieving college degrees but had also been in positions that better matched their education and skill sets, the productivity boost that would have resulted means the world's biggest economy would have generated an additional $507 billion to GDP in that time.

The breakdown regarding personal finances is just as telling. If the educational and professional gaps between Black and white women stayed at rates seen in 1960 (all other factors constant), a Black college-educated female professional would have made $5,000 more in annual wages by 2019. Sadly, however, a still-large wage gap exists even when controlling for education. In our hypothetical scenario, adjusted for the quality of education, a Black professional woman's annual earnings would still be $7,600 lower than that of a professional white woman.

These inequities, exacerbated by COVID-19, leave Black women even further behind economically, with a bigger percent drop in their participation rate and an unemployment rate now almost double that of white women.

Clearly, closing the gaps won't happen in a vacuum--and multiple variables are always at play when it comes to the causes of economic inequity. But this doesn't diminish the larger truth that structural and systemic racism has long stymied the economic advancement and prosperity of Black communities in America. This perpetuates by putting future generations at an economic disadvantage, most notably with regard to mobility and income, particularly as it relates to education levels.

In our view, a simple, objective, nonpartisan measure that would equip lawmakers with the requisite tools to assess appropriate proposed legislation and its effect on women in the workforce would go a long way. In particular, a Congressional Budget Office (CBO)-like "score" could assess the impact legislation would have on the economic feasibility and accessibility to the workforce for Black women and women of color.

This report does not constitute a rating action.

S&P Global Ratings, part of S&P Global Inc. (NYSE: SPGI), is the world's leading provider of independent credit risk research. We publish more than a million credit ratings on debt issued by sovereign, municipal, corporate and financial sector entities. With over 1,400 credit analysts in 26 countries, and more than 150 years' experience of assessing credit risk, we offer a unique combination of global coverage and local insight. Our research and opinions about relative credit risk provide market participants with information that helps to support the growth of transparent, liquid debt markets worldwide.

U.S. Chief Economist:Beth Ann Bovino, New York + 1 (212) 438 1652;
bethann.bovino@spglobal.com
Contributor:Rafia Zafar, Independent Researcher
Media Contact:Jeff Sexton, New York + 1 (212) 438 3448;
jeff.sexton@spglobal.com

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