If you knew that you had the power to help eliminate some of the financial impacts of racism, what would you do?

This is a question that employers must answer.  Nearly half of employers now offer financial wellness programs and 95% of organizations feel a sense of responsibility for their peoples’ outcomes.

The problem is that most of these programs are unintentionally racist.  Just 8% of employees with access to a financial wellness program say they use it, and the average participant is a white male with higher household income.

It is clear offering more of the same will not help those who most need the help.

Retirement plans and salary matching incentives are another land mine.  White households’ median retirement balance is $79,500, while Black and Latinx have just $29,200 and $23,000, respectively.  This is obviously a multi-dimensional issue, but it is important to examine the reasons for disparities beyond the racial wage gap (which employers also have the power to fix).

Black and Latinx families are much more likely to financially support family members (and others) outside the household.  Black and Latinx households have much more restricted access to traditional banking relationships.  Once they do have access to savings institutions, Black and Latinx investors prefer safer vehicles than their White counterparts—White savers are four times as likely to own stocks and IRAs.  Black and Latinx families get paid less (making salary-based matches less impactful), are less financially-educated, are about 33% less likely to own a home (meaning they are more likely to be saving cash for a down payment as opposed to retirement), are more likely to be trapped in high-interest payday loan debt.  Is retirement and investment advice what they really need?

Financial wellness programs often use licensed financial advisors to dispense advice.  This creates an obvious conflict of interest—the advisors want to spend more time working with the participants who have the assets to become valuable clients, and their expertise is in investments and insurance that do not address the immediate needs of many Black and Latinx families.

The bottom line is this: a financial wellness program that is not constructed to fairly meet the needs of a diverse workforce is probably increasing the racial wealth gap and favoring white, male participants.

A program that is designed to meet the current needs of individuals—instead of the general needs of the highly-compensated—is much more likely to open pathways to progress for all participants.  This means asking employees what they need and want, identifying the barriers to those outcomes, and providing resources and guidance to help them overcome challenges and reach their goals.  Emergency savings vehicles and incentives, low-cost debt and debt alternatives, financial organization and budgeting tools, employer-linked banking solutions, and unbiased guidance are all excellent tools that are likely to help every participant make meaningful progress.

Employers can offer all of these tools—and more—through ProsperBridge for about 0.5% of the average salary, or 17 cents/hour.  That’s about 1/7th the median cost of a 401k matching program.

Americans overwhelmingly (73%) say that money is their dominant cause of stress.  It’s time to offer financial wellness programs that help everyone’s wellbeing.