Black voices have been suppressed in America for far too long. And the problem has become so glaringly apparent in the economics industry that an entire federal agency is still struggling to diversify its staff, even after federal law has required it to do so.
The Federal Reserve, the nation’s central bank responsible for controlling the monetary system and fending off financial crises, is predominantly white. Ten years after the Dodd Frank Act required the system to diversify its hiring, an analysis by the New York Times found it’s still falling far short of being inclusive.
Even on a smaller scale, it can be hard to find Black voices in economics. #EconTwitter is dominated by white men. Studies show the voices of Black economists were largely absent in early discussions of the Covid-19 pandemic’s financial impact.
In a country where systemic racism steals the promise of a flourishing financial future for Black Americans, representation matters—especially when it comes to the people responsible for researching, proposing and implementing economic policy that can help lift the community.
Economics Lacks Black Voices, Perspectives
There’s a long history of racial inequality in economics. The first Black woman to earn a PhD in economics, Sadie Alexander, couldn’t practice after earning her doctorate because of racism and sexism in the industry in 1921—the same year that Black Wall Street was destroyed. The incident took place in Tulsa, Oklahoma, where one of the wealthiest territories of Black-owned businesses was burned to the ground by a mob of white people.
George Stigler, a 1982 Nobel laureate in economics, once argued that Black Americans were inferior as workers and could achieve economic success with a “willingness to work hard.”
Today there is still an overwhelming lack of Black representation in the economics industry. Only 4% of economics PhDs in the United States went to Black economists in 2018.
Not many of those professionals end up at one of the highest economic agencies in the country, the Federal Reserve—only 0.5% on staff at the Fed in Washington were Black in April 2021, according to the New York Times analysis.
The Federal Reserve is one of the centerpieces of economic research in the U.S., and its work is highly influential over policy research and development. The agency is responsible for implementing monetary policy that heavily affects vulnerable groups in the country, including Black Americans.
When there isn’t appropriate representation among its researchers and lead economists, policy choices might not be adequate enough to help lift these demographics with the rest of the economy.
“If you block out certain perspectives or voices, then you’re missing a broad range of experiences that are representative of the broader culture and population,” says Valerie Wilson, who holds a doctorate in economics and is the director of the Economic Policy Institute’s Program on Race, Ethnicity, and the Economy , which analyzes the impact of policy decisions on the economic condition of America’s people of color. “By doing that you automatically limit your ability to problem solve as it relates to policy.”
Even if the issue of racial representation was resolved at the Fed, there’s still an alarming lack of research and discussion around racism and equality.
An analysis by the International Monetary Fund in 2020 found only 0.2% of articles in the top 10 economics journals published over the last 10 years—about 16 articles out of 7,920 total—cover issues of race, racial inequality and racism. And when it comes to amplifying the few Black voices in the field, the world of economics strikingly falls short. One study finds Black economic authors are slightly less likely to publish in top-tier journals than their white counterparts.
Without additional focus on these topics, and the voices of experts from within these communities, blind spots are persistent throughout economic research. Little change can happen when issues aren’t properly identified and addressed.
William Spriggs, who holds a doctorate in economics and is a professor at Howard University and chief economist at the AFL-CIO, acknowledged such blind spots at an April conference where he stated economists completely fail to acknowledge everyday racism at all in their research.
Why Representation Matters in Economics
The industry’s lack of attention to—and sometimes blatant disregard of systemic racism—can result in economic policy that neglects the financial condition of a huge portion of the country. And those ongoing policy blind spots perpetuate the racial wealth gap.
The racial wealth gap is the result of institutionalized racism that has eaten away at the earnings, savings, home values and overall wealth of Americans of color. The gap makes these communities more at risk of financial insecurity throughout their lives, including in retirement.
Read more: America’s Racial Wealth Gap In Retirement Savings
Adding more Black voices to economics is becoming a vehicle for overcoming the racial wealth gap. Wilson says Black economists are largely responsible for bringing the issue to the forefront as “an issue worthy of serious consideration.” Their role is crucial in creating solutions.
“Your interpretation of [economic] disparity will largely be influenced by your personal experiences, and that comes to bear in thinking about how we decide to solve a problem,” Wilson says.
But it’s not as easy as telling the federal government or research organizations to hire more Black economists. There have to be systems in place that promote and ensure diversity in every stage of life.
“As with any other institution in this country, the way to make it more diverse is to prioritize diversity—but unfortunately that does not happen organically in this country because of the long history of segregation,” Wilson says. “In order to make it a more diverse field, [it] has to be a priority of those who are in positions of power and influence who can use their voices.”
The Biden administration has focused heavily on diversifying its top advisor roles, especially in the labor and economics offices. It appointed 36-year-old Janelle Jones as the Department of Labor’s chief economist, making her the first Black woman to ever hold the position. Treasury Secretary Janet Yellen has also expressed the urgency of diversifying those in charge of economic policy changes, stating “diversity is important in ensuring that the research that is done within economics appropriately reflects society’s priorities.”
Those diverse voices will prove crucial in rebuilding communities of color as they continue to disproportionately carry the economic burden of the pandemic. At the pandemic’s peak in April 2020, Black or African American workers saw an unemployment rate of 16.7%, compared to 14.1% that of whites.
And though the economy may be recovering, the Black community is being left behind. The unemployment rate of Black and African American workers was a staggering 9.7% in April; for white workers it was 5.3%.
