Honoring Black History Month Through Economic Empowerment

February is Black History Month, a time to honor the rich history, vibrant culture, and remarkable achievements of Black and African Americans. This month is a celebration of hope, inspiration, and strength that highlights the community’s journey through countless obstacles, discrimination, and adversity.

While Black History Month is a time to recognize these achievements, it also serves as a stark reminder of the ongoing challenges many Black Americans still encounter today, including social inequality, economic disparity, and a lack of financial security and resources. These issues are not relics of the past but ongoing struggles that must be acknowledged, addressed, and resolved.

As companies honor the significance and impact of Black Americans during Black History Month, they can show their commitment to tackling the financial barriers many still face by providing access to solutions that greater promote economic empowerment, participation, and well-being within this community.

A Look at the Numbers: Black Americans are More Likely to Face Economic Insecurity

A Pew Research study revealed that when asked to define what “success” means to them personally, 82% of Black adults point to the ability to provide for their family. And among all the pressures Black adults experience, the top two cited relate to personal finances. 71% say they face a great deal or fair amount of pressure to have enough money to do the things they want to do, and 68% say the same about being able to provide for their family.

Short- and long-term savings rates among Black Americans are another cause for concern:

• 37% of Americans don’t have $400 in liquid savings. That percentage increases to 72% for Black households.
• 54% of Black Americans don’t have adequate savings set aside to retire.

There are several reasons Black Americans are behind in these areas. The most common are:

• Black employees are paid less compared to other demographics.
• Black unemployment is higher.
• Black workers are less likely to have access to an employer-sponsored retirement plan.
• Fewer Black households own their homes.
• Black families are less likely to inherit wealth.

A Call to Action

For employers, Black History Month presents an opportunity to make a difference. By guiding employees from all demographics and walks of life through personalized economic empowerment strategies and encouraging disciplined savings habits, you can help them achieve financial independence, dignity, and resilience. Here are some initiatives to consider:

• Financial education: Educating your employees on financial fundamentals helps them make more informed decisions about budgeting, saving, and investing.
• Access to financial literacy services and personalized support: Offering financial planning knowledge tailored to individual needs can open doors to greater wealth-building opportunities.
• Advocacy and awareness: By promoting policies and practices that support financial equity, businesses can drive systemic change.

The Role of Earned Wage Access in Driving Workplace Equity

82% of workers believe immediate access to same-day pay would significantly enhance their ability to save money. Industry has been slow to keep pace with this trend, with most US businesses processing payroll on a weekly or bi-weekly basis.

In many cases, the traditional payroll model stretches employees’ earnings for too long to cover the rising cost of living. On-demand pay, also known as Earned Wage Access¹ (EWA), is a low-cost, high-impact, and easy-to-implement solution that helps workers cope financially between paychecks.

By giving workers the option of accessing their wages immediately after they’ve earned them, they can avoid credit-damaging actions like paying bills late or over-drafting their bank accounts. They’re also less likely to seek short-term, high-interest lending options, such as those offered by unscrupulous payday lenders that prey on people needing instant cash relief. With the flexibility offered by EWA, they can pay their bills and spend and save on their own terms and schedules.

The following statistics illustrate how EWA can positively impact workplace equity and why it’s a popular choice for organizations looking to support employees from underserved populations:

• A survey of nearly 500 US adults showed 54% of white EWA users reported that they would have used a credit card to pay a bill or make a purchase if EWA was not an option for them. A statistically significant lower percentage of Black (39%) and Hispanic (29%) respondents had that same option available to them, exposing the racial disparity that exists in access to financial credit.
• The need for costly payday loans, the majority of which target minority populations, is significantly reduced when employers offer EWA.

Final Thoughts

Black History Month reminds us of the importance of helping underserved communities navigate financial hardships, build economic empowerment, and achieve their dreams.

Companies can do their part by ensuring employees from marginalized groups are given more financial education opportunities, access to basic financial services, and resources that help them build financial wellness and stability.

Payactiv is a leading provider of EWA and financial inclusion resources. Our solutions make it easy for you to help your workers plan, spend, and live with dignity while building financial security and savings for tomorrow.

Learn more about Payactiv’s service, or book your demo now.

¹Earned Wage Access requires employer participation. Employees can only access a portion of the wages they have earned to date.

All content provided on Payactiv.com/financial-learning/ is for informational purposes only. Payactiv makes no representations as to the accuracy or completeness of any information on this site or found by following any link from this site. Payactiv will not be liable for any errors or omissions in this information nor for the availability of this information. Payactiv will not be liable for any losses, injuries, or damages from the display or use of this information.