Growing up in Staten Island, New York, Chief Member Dafina Lovelace learned early on about the importance of money and budgeting. “My mom sat me down and said, ‘This is a budget and this is how much money I bring in,’” she says. “I remember I was like five and she was like, ‘These are how much our bills are and this is how much is left over. Now, when we go out and we're at Woolworth, do you think you should ask for ice cream?’”
Those early lessons about money, Lovelace said, piqued her interest about not only how to make money, but how to grow it for the long-term. That’s why, at the young age of 14, she invested in her first stock after reading investment articles in Newsweek and Black Enterprise. Her early encounters with money also influenced her career in finance as she currently serves as the SVP of Product at an investment and wealth management firm in New York.
For Lovelace, she knows that having a healthy understanding of money at a young age is not common, as decades of discriminatory laws and pay inequality have blocked generations of Black families from gaining economic freedom. That’s why, she co-founded GRODT Investment Group, which focuses on teaching women and diverse people about angel investing and long-term stock investments — all of which can contribute to helping close the ongoing racial wealth gap today.
Currently, white American families have eight times the wealth of Black American families, according to the National Women’s Law Center. And single Black women own $200 in wealth for every $28,900 single white men own. Much of this gap, Lovelace says, is linked directly to pay discrimination, with Black women earning just $0.58 for every dollar earned by white men.
In honor of Black Women’s Equal Pay Day, Lovelace shares how the wage gap Black women face at work snowballs into the wealth gap Black families face at home, hindering generations of individuals from reaching financial success.
The Generational Impact of the Wage Gap
According to the Institute for Women’s Policy and Research, three in four Black mothers today are breadwinners in their family, proving just how vital a Black woman’s salary is to a household. On average, Black women who work full-time, year-round, lose more than $900,000 over the course of a 40-year career due to pay inequality, reports NWLC. This economic gap impacts how much an individual can put down on a home, how much they can contribute to their child’s education, and how much they can invest or tuck away for retirement savings.
“You know, if on average I'm making, let’s say $10,000 less than even my white female counterpart, because we’re not even going to talk about my white male counterpart, and they’re taking that $10,000 and investing it at a 4% interest rate year over year, they are now creating a beautiful nest egg for themselves and for their future that is going to take me twice as long to get to,” Lovelace says. “So they're now able to buy a house maybe five years after undergrad. But for me, because my salary is less, it took me like 10 years or more after graduation. So that’s how [pay inequality] is creating a differential in terms of how I get to access the things that bring in significant wealth.”
How Black Women Can Ask for More
Lovelace, who remembers a specific moment in her career where she was paid less than a junior employee she trained, encourages all women, specifically Black women, to be as detailed as possible when negotiating salary. This, she says, will ensure that you have discussions about a pay range that works for both you and your family’s financial future.
“When I negotiated my offer for this job, I was very clear. I had to have my spreadsheet and I was like, What's my base salary? What's my bonus? What's my long-term incentive? And what is my total compensation? And when they sent their spreadsheet, I was able to say, ‘I need these numbers instead of your numbers.’” The reality is, she says, you only get one real time to ask for more money when joining a new company. That’s why, you have to go in armed with the right information about your market value and how much you need to ensure that you’re being paid fairly.
“The other thing that I learned to negotiate in my salary that I never did before this job was a severance package,” Lovelace says, while crediting an HR friend for giving her this advice. “She was like, ‘You need to negotiate a better severance package because it's the middle of COVID and you don't know what this company is going to do or what their strategy is and things change.’”
If you can, Lovelace advises women to negotiate a severance package for up to six months. This way, if you do have to look for a new job you still have income coming in that can support your financial obligations. “You know beyond our six-month savings that we try to get to, which is really hard to get to, we need to go in knowing that the nature of a corporation can change, and we have to prepare to navigate that change.”
What Company Leaders Can Do to Help Close the Wealth Gap
One key way for executives to not only hire diverse talent, but keep diverse talent is to ensure that there’s equal pay at all levels of an organization. That’s why, Lovelace encourages all leaders to “stop with the veil of secrecy” when it comes to salary.
“You want us to have conversations about everything else and you want us to be able to share a message across the organization,” she says. “But you don't want me to talk about how I live and my financial income because all of the things that make up my income are part of how I live and breathe and my wellbeing. So we need to demystify the secrecy behind salary, equity, severance agreements, and vacation agreements because all of these things are valuable.”
Additionally, Lovelace says that instead of offering stock options and equity only to executives at a company, more leaders need to consider offering equity to all employees, especially considering women of color hold just 13% of C-Suite roles.
“Everybody needs to have skin in the game,” she says. “You want people to give their ingenuity and their innovation to the company and you're asking them to just get in return a salary while everybody else above them is also getting equity. That makes no sense. And [equity] is what we've seen generationally be part of a wealth transfer from generation to generation.”
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