The perfect storm keeping women of colour behind at work

Effects from the pandemic have set back many workers. For women of colour, these factors have compounded to hurt their growth potential even more.

The pandemic’s effects on working women have been well documented by researchers and workers alike.

Throughout the past three years, women around the world disproportionately suffered due to economic shutdowns. Their earnings, in many cases, have stalled or fallen relative to men’s, and in many pockets of the labour market, women still struggle to climb to critical leadership positions. More women than men are leaving their jobs, unable to navigate corporate structures while balancing commitments outside of paid work.

But buried in the narrative of women’s recent struggles overall is another critical and often even more troubling storyline: the experiences of women of colour.

Although much gender-based data and research is reported in binary – men versus women – women’s lived experiences are formed at the intersection of gender and race, or ethnicity. Simply, looking at women as a monolith can lose nuance: the struggles of a white woman in the workforce may not necessarily be comparable – or even at all similar – to those of a black working woman; and, in turn, a black working woman may tend to face entirely different barriers to those experienced by women of Middle Eastern, Hispanic or Asian descent.

Now, as the effects of the past several years begin to crystallise, researchers stress it’s important to acknowledge that women of colour in the paid labour market have been disproportionately affected by a perfect storm of economic and societal factors that have played havoc with their pay and earnings potential.

Not only were women of colour more likely to be laid off during the pandemic, for example, but evidence has also emerged that during the most recent wave of job cuts, they were more likely than their white peers to have been made redundant. To make matters worse, companies have been cutting and shelving diversity initiatives and programmes designed to women of colour in the workforce. 

This confluence has left women of colour at a particular disadvantage, and in their quest to advance in the workforce and boost their earnings, they may now face an even steeper climb than before – something that employers, say experts, have a responsibility to address.

A perfect storm

Even though women of colour have always earned less and endured worse representation in management roles across the corporate world, the past three years have served up a crush of additional challenges. 

First, their workforce representation has fallen at an alarming rate. In the US, research shows that women of colour, ­and especially those with childcare responsibilities, were more likely to leave the workforce during the Covid-19 pandemic. And the latest Women in the Workplace report, compiled by consulting firm McKinsey & Company, in collaboration with women’s workplace-equality non-profit Lean In, showed that among the unprecedented number of women leaving their employers, the phenomenon is particularly pronounced for women of colour.

For those who do remain in the workforce, many are encountering what McKinsey coins the “broken rung” at the first step up the ladder to management. According to their most recent research, for every 100 men who are promoted from entry level to manager, only 87 women are promoted, and only 82 women of colour are promoted. This is particularly worrying, says Tina Opie, an associate management professor at Babson College, US, since earnings potential correlates strongly to seniority. She notes that while 21% of C-suite leaders in the US are women, only 4% are women of colour and just 1% are black women.

Opie says that while it’s “nothing new” that employees of colour, and particularly women, have tended to earn less and be less represented in the most senior ranks of the corporate world, the most recent headwinds are “troubling”.

The ongoing corporate cuts are also taking a toll on this group, affecting their current roles as well as critical structures. Although there is no hard data that indicates women of colour have been laid off in higher numbers than other workers, research by scholar Alexandra Kalev at Tel Aviv University shows that layoffs do tend to disproportionately affect women and minorities – especially managers – and particularly when cuts are determined by the tenure that an employee has been at an organisation, and by the position that they hold. In other words, women and minorities are less likely to have been at the company for many years, and are also less likely to be in a senior position than a white man. This makes them more likely to be deemed non-essential – more vulnerable to cuts. 

The important diversity and inclusion programmes that employees of colour rely on for advancement are also being threatened. Early data indicates that, during the recent wave of mass layoffs, and particularly in the tech sector, these DEI efforts have been on the chopping block (among other companies, Twitter is a high-profile example). And if economic uncertainty lingers, and companies continue to cut budgets, slashed funding could discourage organisations from reinstating or bolstering efforts and functions that would help to address the dynamics disadvantaging women of colour.

Other cuts may also be stalling out advancement opportunities for women of colour. Kalev’s research shows that when companies offer work-life s – such as the option to work flexibly, family leave and help with childcare – women, and especially women of colour, as well as men of colour, are significantly more likely to succeed climbing into management jobs. But these are benefits that can fall by the wayside when economic headwinds pick up. “Without such work-life s, it is much harder for [women and women of colour] to keep their jobs and climb up the ranks,” says Kalev.

A pay challenge

If the challenges faced by women of colour persist or get worse, one of the major knock-on effects will be on earnings.

There is already a significant pay gap between men and women in most countries.

In the US, for example, 2022 data shows that for every US dollar a median man working full time makes, a median woman earns about 83 cents. In the UK, using the same parameters, the gap is marginally smaller, at about 85 pence to the British pound. According to the United Nations, the global gap is about 77 cents to the dollar, predominantly driven by women being under-represented in decision-making roles, doing more unpaid work than men and being over-represented in lower skilled and lower income work. Discrimination may also factor in, but that’s something that’s hard to measure and often difficult to prove, meaning that it can persist for years unnoticed.

Yet women of colour earn even less. Research from the Center for American Progress (Cap), for example, showed that in the US, Hispanic women earned just 57 cents for every $1 earned by white, non-Hispanic men in 2020. For black women in the US, the wage gap may be responsible for an average of $976,800 in lost wages over a 40-year career, while resulting in losses of $1.15m for Latinas and $1.08m for Native American women. In the UK, ONS data shows Pakistani women earned about 69 pence for each pound earned by a man. As women of colour lose their opportunities for advancement and workforce tenure, it will be challenging to close this earnings gap, and enable them to gain footing in pay equality.

And while women of colour are set back, losing economic empowerment, these issues can be tough to reverse.

“This is deeply troubling,” says Hephzi Pemberton, founder of Equality Group, a London-based consultancy that focuses on inclusion and diversity in the finance and technology industry. She says that these effects are particularly concerning, because losses associated with being underpaid compared to another demographic group accumulate and grow over time. “As a result, women of colour are less able to build savings, withstand economic downturns and achieve some measure of economic stability. They are often the same women who are caring for others and ing many community activities.”

This potentially growing discrepancy can also have widespread implications, adds Pemberton. “It is not only a deep loss for the workplace – it ends up having a large impact on society more broadly,” she says. “When we invest in women of colour, we are ing whole families and communities. We have to appreciate the outsized impact reversing this gap can have on our economy and society.”

‘An extensive diversity penalty’

Experts agree that employers must bear the brunt of responsibility for ensuring that women of colour don’t fall even further behind their peers in the workplace.

As a first step, Pemberton says companies can start taking action by understanding the extent of these conditions, and collecting more nuanced data around them. Pay reports, she says, can be a useful resource to gauge and acknowledge just how much work needs to be done. Some countries, like the UK, mandate annual gender pay gap reporting for organisations of a certain size, but don’t require companies to break down gender pay data into categories that include race, for example. That, say some experts, could be one way of shining a light on the severity and urgency of the problem.

Subsequently, it’s important for firms to also recognise there are several factors exacerbating pay gap issues – especially amid current conditions. “As those with the power to implement change at a higher level, the responsibility lies on the shoulders of employers and managers to acknowledge, address and remedy all racial and gender pay gaps,” agrees Opie, of Babson. “Employers must take a look at the role of intersectionality in pay discrepancies, and ensure that employees are compensated in an equitable manner,” she says.

“Without active intervention, the gap will keep widening,” says Pemberton. “Often, managers are unaware of the many ways they can be part of the solution. They need to see the data, receive additional training and establish structures to ensure women of colour aren't continuing to pay such an extensive diversity penalty.”

Even with these compounding factors in play, however, not every development throughout the past few years has grim implications for women of colour.

For example, some experts are hopeful that new US laws banning employers from asking salary history could help to stem the widening in pay gaps. When employers are able to ask about salary history before making a prospective employee a monetary offer, that enables a form of institutional discrimination and the perpetuation of wage gaps that can particularly disadvantage women and employees of colour, according to a paper published by academics at Boston University. “Even if employers do not individually discriminate, the use of salary histories appears to perpetuate the effects of past discrimination or other group inequities,” they add.

Data from the National Women’s Law Center, a US-based non-profit, also suggests that salary-history bans can be effective at making sure that women of colour are paid fairly. Research shows, too, that women and minority workers tend to ask for less money, so some experts also predict that that incoming salary transparency laws – mandates to publish pay ranges on job ments, for example – could help to stamp out inequity.

Levelling pay is, of course, only one part of the puzzle. As Kalev’s research shows, for example, employees need to create ecosystems – networks and benefits – that lead to the kinds of conditions in the workplace in which women – all women – can thrive.

And perhaps far more basic than that, experts agree that employers must lead by example in acknowledging the lived experience of these women throughout the past few years. Only by doing this, can they create the structures needed to ensure that no single demographic group falls even further behind.