Economic gains: Racial equity in income: Eliminating racial inequities in income would strengthen families, communities, and local economies.

Insights & Analyses

  • In 2015, the Nine-County Bay Area economy would have been $356 billion larger if there were no racial gaps in income.
  • Among people of color, incomes for all racial/ethnic groups except Asians or Pacific Islanders would at least double with racial equity in income.
  • Latinx and Black earners would have the largest gains: average annual income would have been $55,394 higher for the Latino population and $51,830 higher for the Black population with racial equity in income.
  • San Francisco County would experience the largest percent gain in GDP (43 percent) with racial equity in income, whereas Sonoma County would experience the smallest percent gain in GDP (14 percent).

Drivers of Inequity

Historically, people of color were barred from educational opportunities that would allow them to obtain higher-paid employment, while occupations dominated by people of color (e.g., domestic and agricultural work), were excluded from minimum wage and overtime protections. Deindustrialization and cuts to the public sector decimated unions and disproportionately hurt people of color who were first to be laid-off and pushed into a growing service sector. Today, hiring and pay discrimination is widespread even among candidates with equal education and the loss of worker protections has created wealth for top earners as wages have declined for the bottom half. Opportunities for inclusion exist in industries driving economic growth (e.g., tech), but to date, these industries have lacked the racial diversity reflective of the region.

Strategies

Build community power: Policies to close the racial income gap

Strategy in Action

San José raises the floor for Silicon Valley workers. In 2012, a San José State University undergraduate class project turned into a successful ballot initiative to raise the minimum wage in the city to $10/hour, pegged to inflation. Local labor unions, community organizations, and business partners supported the effort, and the campaign helped build support for a statewide $10/hour minimum wage that passed the next year. Currently, the city’s minimum wage is $15/hour. San José also has one of the highest living wages in the state, at $21.73/hour (with health benefits), that adjusts annually based on increases in the cost of living in the city, and applies to all businesses that contract with the city. Learn more.

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