Transcripts For CSPAN3 Hearing On Race And Gender-Based Wealth Gaps 20240714

Ways to overcome those obstacles. This is about one hour and half. [inaudible conversations] the committee will come to order. I note that a quorum shall be present without objection the committee is authorized to declare a recess of the committee at any time. Without objection members of the full committee, not on the subcommittee are authorized to participate in todays hearing. The committee is meeting today pursuant to the testimony on examining racial and gender wealth gaps in america. I now recognize myself for four minutes to give an opening statement. Todays hearing is around a Critical Mission avoid the subcommittee exist. The racial and gender wealth gap is real. Unacceptable and actually much larger than people think. True wealth can be defined by adding of total assets including cash retirement account or your home and then subtracting liability which is credit card debt, student loans, mortgage to reach you reach your net worth. The median net worth of white household with 130,800, the white median net worth of latina and households was 17530. And for black households, it was 9590. For nearly all working families, the most powerful Building Tools are homeownership, and retirement. However, due to Structural Racism, redlining, practices, outright discrimination, disparities and the list goes on, along with predatory lending practices that disproportionately affect women and communities of color. It has been more difficult for certain families to actually build wealth across multiple generations. There is always talk about disparities in income between women and people of color as compared to the white peers but social economic differences do not explain a way racial in office a. Todays reality in which a homeownership of black households is the same as it was in 1967. When racebased discrimination in housing was legal. And it did not happen by accident. We heard all the stories. Racial, gender are not caused by individual behavior but seek in systems that perpetuate past injustices. The subcommittee was founded to help leaders and members of congress confront the reality that our systems, institutions and outcomes emanate from an unjust hierarchy of which the United States was built. According to richard who authored the law, he said we have created a cast system in this country which africanamericans in geographically separate by racial explicit Government Policies and also most of these policies are now off the books and have never been remedied in their effect endured. For that reason i am proud to have todays hearing to have identified an underlying issue that perpetuate the racial and gender welfare and helps set up the stage for bold comprehensive solutions to set the promise facing the nation. Barriers to wealth, accumulation remains a growing issue facing our communities and in particular my constituents in the third Congressional District of ohio and the nation at large. There is no one side that fits all and i call my colleagues within this committee to give this topic the full attention that it deserves and Work Together to implement multifaceted federal policy solutions. And i reserve the balance of my time for the chair of the Financial Services committee maxine waters. The chair now recognizes the Ranking Member congresswoman and wagoner for her full five minutes for her opening statement. I think the chair and i thank you so much for putting together the hearing. Its a critical hearing and as we have congressional efforts towards the gender pay and wealth gaps. In 1976, one in 20 women were the sole breadwinners in their household. By 2013 it was one and four. And today, women are the breadwinner or cobreadwinner in nearly two thirds of families with children. Given the substantial gains in the percentage of women participating in the workforce and growing our economy, we must ensure that women have equal access to opportunity to support their family for the future and build access. The good news is, we have seen a tremendous improvement in how women are compensated in the past few decades. A 2018 pay scale study which i would ask madam chair that we submit for the record. Without objection. Comparing men and women with similar experience industry and job level found that women receive 98 cents for every dollar earned by men. This is fantastic progress. But there is still much to be done. Particularly in addressing the wealth gap in the managers gap. In ensuring that the American Workforce is more flexible and familyfriendly so mothers can produce pate without facing unnecessary hurdles or sacrificing the wellbeing of their children, americas next generation. As a working woman, i worked before, during and after i had my children. And grandchildren. I have always been a past defender of equal pay for equal work. In order to close the pay gap and empower more women and people of color to be leaders in our workforce, i am proud cosponsor of hr 1925, the wage equity act. This legislation would empower employees to utilize Flexible Work arrangements to create proactively incentivize businesses to fix pay and protect individuals and negotiating employment based upon merit, not salary history. Target negotiation, education for women. And protect employees in discussing the compensation with their colleagues. In 2017, the Government Accountability office, the gao found that women are under representative especially management. In this industry, mathematics, mathematicians, engineers and physicists were alongside the economics. But women receive far few degrees in math, statistics, Computer Science and engineering compared to men. The underrepresentation of women in wellpaid stem careers is one of the underlying causes of the wealth gap, creating greater diversity in Stem Education and doing it at an early age is critical, not only for improving opportunity for women and minorities and finance but across all workforce sectors. It is key to sustaining robust Economic Growth in the United States. That is why i sent a letter yesterday to the gao which i would like again to submit for the record madam chair. Without objection. Requesting a study to assess how firms are supporting participation among women in the stem program at the secondary undergraduate and graduate levels. And what best practices firms are using to recruit and retain women with stem degrees. This study will help us continue to find solutions that would strengthen the u. S. Industry and i think you, i will now yield the remainder of my time to the Ranking Member of the Financial Services committee mr. Patrick mchenry. I think the Ranking Member in the chairwoman for holding this meeting. The subcommittee principle is very simple. Every american should hold equal access to the same economic opportunities. The data indicating racial wealth gaps tells us that that is not the case. Financial firms and other companies of all types have recognized the negative consequences of the wealth gaps in this country. Firms are taking proactive steps to address underlying conditions resulting in women minorities to earn less and save less. Initiatives such as literacy training, changes to family leave and childcare policies, that ive been supportive. And for higher participation stem programs have been effective and they need to do more. Thank you for participation in thank you for your initiatives and we look forward to a good hearing. Thank you. Today we welcome the testimony of a very diverse and distinguished panel of five witnesses. Thank you. First we welcome the testimony of dietrich mohammed, the chief of race and community at the national reinvestment coalition. In the in crc fair housing, fair lending and Small Business. He oversees the Small Business program as well. Prior to his role he was a senior director of the Economic Department and executive director of the Financial Freedom center. Next we welcome the testimony of tj who is the Institute Fellow at the urban institute. Tj researched focus is on Economic Security, Structural Racism in the racial well cast. Her publications include africanamerican Economic Development and ownership. She is an advisor for the closing Womens Wealth Gap Initiative and a member of the Bipartisan Commission on Retirement Security and personal savings. We next welcome the testimony of doctor powell, a researcher and independent consultant specializing in external evaluation of grants that seeks to increase Faculty Diversity and bring underrepresented groups into stem. Science, technology, engineering and mathematics. Doctor powell is a National Expert on the wealth gap especially gender and racial dimension of wealth inequality. She is also a Founding Member of the closing Wealth Gap Initiative and a member of the Insight Centers experts of color network. Next we welcome the testimony of celie crosscheck who is the chair of the 135,000 strong Global Professional womens network. She is the ceo and cofounder of elevate, additionally First Mission driven platform for women. Before launching, she built a successful center as the ceo of merrill lynch, u. S. Trust, City Private Bank and Stanford Steve bernstein. She was also chief Financial Officer for citigroup. Finally, we welcome the testimony of doctor lisa cook and a professor of the department of economics at the j Madison College at Michigan State university. She served as president of the National Economic association from 2015 to 2016 and currently serves as codirector of the american Economic Association summer training program. Prior to this appointment and while on faculty at Harvard University Kennedy School of government, she was also the Deputy Director for African Research and programs at the center of International Development at Harvard University. Now, the witnesses are reminded that the oral testimony will be limited to five minutes. Without objection, your written statement will be part of the record. The witnesses are reminded to turn on their microphones and abide in the three lights in front of you. Green means go, yellow needs wrap up and red means stop. We will first start, you are now recognized for five minutes to give an oral presentation of your testimony. Chairwoman beatty and Ranking Member wagoner and members of the subcommittee, thank you for inviting me too testify today. The views expressed are my own and should not be attributed to the urban institute, trustees or funders. This hearing represents a critical step in work that is been done to bring the racial and gender wealth gaps Nation International attention. My remarks will focus on three key points, first, the racial wealth gap is not a result of bad financial choices by people of color, it was created through a Structural Racism. Second, to understand and effectively address the wealth gap, we need more expansive Data Collection that is federally funded, third they gap can be closed but it will require Equitable Solutions that focus on policy change, not changing peoples behavior. The racial wealth gap is the difference in net worth between families of color and white families. The median wealth of white families in 2016 was ten times the wealth of black families and eight times the wealth of latino families. Research demonstrates the racial wealth gap was created by policies and institutional practices designed to facilitate the wealth accumulation while impeding wealth building or stripping wealth from families of color. These policies include Human Trafficking and bondage of people of african descent to build wealth for white people followed by policies that restricted black homes and Business Ownership, employment and educational opportunities. Latino families experienced extensive land locks during the manifest destiny. And displacement through deportation thereafter. Native americans lost much of their land and Natural Resources to award treaties and forced displacement including to the homestead act. Asian americans face special fees, taxes and regulations that leave them less competitive than white people and japaneseamericans were interned in world war ii moving their freedom and their assets. It was not until 1900 that the legislation passed to allow women to control property and qualified labor market discrimination into the 1970s. More recently families of color were targeted for subprime mortgages even when they qualified for prime loans resulting in the loss of homeownership and equity. The racial wealth gap persists even when back families meet all the rights and choices. Lack people with College Degrees have less wealth and White High School dropouts. Twoparent black families have less wealth than singleparent white families. The Ford Foundation funded the First Research that was specifically designed to measure the racial wealth gap and to disaggregate the data not only by race and ethnic city by country of origin and tribal affiliation. But the study was limited to five cities into one year. We need federally funded Data Collected periodically to better understand the drivers of the racial and gender wealth gap for foreign policymakers. A possible solution is to expand the Federal Reserve survey of consumer finance. The racial and gender wealth gap are not improbable problems but they require equitable policy solutions to eliminate them. Baby bonds are a solution proposed Derek Hamilton that would give all newborns a publicly funded endowment of 50e familys wealth. They would be held by the federal government until the child becomes a young adult and can use them to pay for an asset like Higher Education or homes. One Analysis Shows that they nearly closed the racial wealth gap in the cost of baby bonds could be covered by a more equitable use of existing tax expenditures for asset building. Over 70 of tax expenditures intended to help Families Build wealth are going to the top 20 of income earners. A more equitable use of these tax subsidies would cover the cost of baby bonds so in summary. Wealth gaps are caused by discriminatory policies and practices. Thank you. Thank you so much. Now i would like to recognize mr. Mohammed for five minutes. Good afternoon and thank you for inviting me here as chief of race wealth and community with a reinvestment coalition. To speak about the racial wealth divide and what must be done to address a issue. In crc was formed in 1990 and is grown into association of more than 600 communitybased organizations that promote access to banking services, Affordable Housing, entrepreneurship, and vibrant communities for americas working families. Thanks to the Ground Breaking work of colleagues, there is growing recognition of the ongoing challenge of a deep too often racial wealth divide. As i often state, the foundation of inequality is racial economic inequality. In the foundation of racial economic inequality is racial wealth inequality. As the demographic continues to change, the racial wealth divide is no longer primary challenge of disenfranchise minorities but a threat to the american middle class. As a report referred notes, since early 1980s, median wealth among black latino families have been struck ellison 10000. Why white household median wealth grew from 105000 145000. And despite of the growth of white wealth, showing how the racial wealth divide is weakening the american middle class as a whole. Similar to the racial wealth divide, there has been ongoing racial inequality for the two largest assets in americas wealth portfolio. Business ownership in homeownership. For the last 40 years black latino homeownership have stabled 50 while white homeownership has remained at about 70 . In the Second Quarter of 2019 white hot homeownership rate of 73 and latinos had almost 47 and black homeownership nearly 41 . In regards, Business Ownership, 13 of u. S. Population is black only 10 of africanamericans are Business Owners and only 2 of businesses of employees are blackowned. Hispanics are 70 of the population but only own 6 of Small Businesses with employees. As was done to jumpstart the White American middle class. Significant Investment Capital must be invested to build africanamerican latino and native american wealth. The report solutions of racial divide and proposals to bridge racial inequality as a whole and the racial wealth divide in particular. This report was a collaboration between ncrc and the curing institute of ethnicity of Ohio State University and Inequality Project of the institute for policy study. These proposals include baby bonds that was mentioned similar to those in cory bookers 2018 bill the american opportunity. He also proposed a significant investment to Affordable Housing and homeownership exemplified with Elizabeth Warren American Housing mobility act and senator Bernie Sanders housing for all plan. It also promotes the passenger hr 42 established a commission to study and proposals for africanamericans. Finally improving Data Collection on race and wealth is another proposed solution. Ncrc advocates for Data Collection in regards to the racial wealth divide such as a representation for section 1071 of the dodd frank act. Which requires the cfpb to collect to disclose better data on loans made to minority women own and Small Businesses. Similarly they advocate for the provision of the previously mentioned American Housing and economic mobility act and requires banks to be examined with making significant amount of retail loans outside the geographical area and leveling the Playing Field for Financial Institutions by requiring nonbanks to be examined under the cra. Policy proposals are needed to address the National Crisis of racial wealth inequality and we think the House Finance subcommittee on diversity and inclusion to discuss these necessary reforms. Thank you very much. Ms. Powell you are now recognized for five minutes to give an oral presentation on your testimony. Chairwoman, Ranking Member and members of the subcommittee, i am a former associate professor of sociology at Harvard University and currently the president of consulting. I appreciate the opportunity to testify about the Womens Wealth gap. The Womens Wealth gap not only impacts women, it affects men, families and especially children. Two thirds of mothers are the family breadwinners or cobreadwinners and about one quarter of children under the age of 18 lived in a single mother family. More than ever before, the Economic Security of families rest on women shoulders. Data from the 2013 survey of Consumer Finances provided by the Federal Reserve board revealed a significant wealth gap between single men and women during the prime working ages of 18 64. Single men, those who had never been married or were divorced or widowed have a median wealth on 10150. In comparison, single women own 3210. Expressed as a proportion single women had 32 cents for every dollar of wealth owned by single men. These gaps remain when we take into consideration other factors that impact wealth such as age, income and level of education. And the wealth gap is magnified for women of color. Single black women of prime working age have a median wealth of 200. And for single Hispanic Women it is 100. Which amounts to less than a penny of wealth for every dollar owned by the single white nonhispanic male counterparts. Women of all races experience and motherhood wealth penalty with mothers possessing only 20 as much wealth as fathers. Again the penalty is much greater for women of color. Black and Hispanic Women with children under the age of 18 have a median wealth of 0 and 50 respectively. In contrast, single white men who are fathers have a median wealth of more than 41000. Huawei is no doubt contributed to wealth building, they are not determinate. To illustrate, never married women working full time have close the wage gap but only about one third as much wealth of never married went. Closing the wage gap is insufficient for closing the wealth gap for two reasons. The first reason, women bear a negative Economic Cost of parenthood. Mothers experience a wage penalty and women are more likely to be singleparent supporting more people on a single income. Two or more the second reason, women lack access to the wealth escalator. The wealth escalator is made up of mechanisms built into our Current System that help people turn the income into wealth more quickly. The wealth escalator consist of government benefits such as Social Security, employer related Fringe Benefits such as paid sick days and contribution to retirement plans and tax breaks that help people retain wealth. Women and especially women of color lack full access to the wealth because they engage in caregiving and because of lower incomes. Women are also carrying more get into debt which restricts their ability to build wealth. Differential access to the wealth escalator cements other inequities and place. Magnifying the impact of the wage gap, motherhood wealth penalty and women of color, the racial wealth gap, to reduce the gap we need to focus on pay equity but we must also expand access to the wealth escalator so its more acceptable to those with lower incomes and caregivers are not penalized. I will give three examples of ways this can be done. First, Social Security reform to incorporate caregiver credit so the years spent out of the labor market or working part time for caregiving do not lower average retirement benefits. Second, access to paid family and medical leave is essential. Third, if assets limit to qualify Public Benefit are raised or certain types of assets such as vehicles are excluded, these assets can help lowincome women get back on their feet in times of temporary need rather than becoming an additional barrier to burying wealth. In summary, reducing the Womens Wealth gap is not only about directing the wage gap, it requires a more comprehensive approach. Doing so is not only good for women but essential for improving the wellbeing of children, families and our nation. I appreciate and welcome your questions. Thank you very much. You are now recognized for five minutes to give an oral testimony of your presentation. Thank you and good afternoon everyone. Madam chairwoman, Ranking Members and members of the committee, thank you for letting me testify on the gender and wealth divide on america today. My passion for this topic is a result of a recognition a few years ago the Retirement Savings gap in the Retirement Savings crisis in this country can be looked at through the lens of gender. Women today who have taken six to eight years longer than men, 75 of women die single and less for women of color. The wealth gap is noted by the panel as a result of many things, the pay gap, the pink tax, the death gap, the motion gap, the Domestic Work gap among others. And i would add another one to it the wealth escalator, the gender investment gap in which women today keep 71 cents out of every dollar of the wealth in cash and more than men do rather than invest it. There are many reasons for this and much data showing this. I would like to address a couple of issues that are not typically addressed in terms of the investment gap in the money gap. First, in our Society Today, boys and girls receive different messages about money. They received them from childhood through adulthood. So we have a gender have an approach to money. Research shows that young boys in our household today are taught to go out and earn money, become a ceo or invest, and girls are taught to be careful, clip coupons and safe. Boys today receive higher allowances for the same chores as girls and boys today receive higher grades in math for the same as girls. Later in life as girls go into young women, articles on womens magazine explain why budgeting is hard, websites tell us to take the quiz to see your money type an entire book written the guilt women into giving up a lot of pay with a offbase premise of giving up small luxuries will be the key to financial security. In contrast men are told to dare and grow, under their money. So we women tend to over the course of her life internal lies that were bad with money. It is today an attractive characteristic in our society to be bad with money as a female. And we wonder why were less confident in money today for women is associated with loneliness and stress and isolation. Not with power and independence. The second issue relates to the representation of females in the money industry. In my old industry in the industry which is spent two and half decades on and wall street. Today 86 of Financial Advisors are men overwhelmingly white men, 90 of wall street traders are men, and 98 of Mutual Fund Assets are managed by men. This despite the fact that the Research Tells Us women are as good or better Money Managers as men are. But last one missed the point, the industry symbol of wall street is involved. A big sorting, anger, and a typically correct. It is not getting any better. Instead the industry, the diversity went backwards after the financial crisis. Even though Research Shows women are as good or better investors in the Research Points clearly to the superior performance of companies with diverse leadership teams. By superior support performance with lower risk which is something that i think would be important for all of us on wall street. Given this q in the industry to serve the saw in the money industry should be a surprise. This gender wealth gap is important in a ripple effect. For example, the power and equity that allows the harassment of the me too moment is also a money and equity. Id like to say the amount of money that women historically could have earned from investing is a no more me too money, get your hand off my live money. So getting more money in the hands of women and others is why we found it best. We invested in algorithms to remove gender bias by adjusting that women live longer. And we work to be assessable as possible having very low investments. To make it assessable for more people. Were among the most quickly Digital Investment engaging with more money in a positive way. Today so many women primary motion are money or shaman will neeloneliness and Research Indicates a key driver of a womans confidence in achieving for future goals as whether they are actually investing and saving. Thank you. Doctor cook, you are now recognized for five minutes to give oral testimony on your presentation. Chairwoman, Ranking Member and eminent members of the subcommittee. Thank you for the opportunity to testify today about examining the racial and gender wealth gap in america. 11 1. From the survey of Consumer Finances, this is the ratio of white median Household Net Worth to block median Household Net Worth. 31000 1 from the Federal Reserve bank of boston and the coauthors in the color of wealth in boston report, this is the ratio of white median Household Net Worth to block median household math work in boston. 50 1, since his annual survey, entrepreneurs, this is the number of white to black entrepreneurs in the United States. In a widely covered speech on income and wealth inequality in 2014, then chair of the Federal Reserve identified four pillars of opportunity or Building Blocks for the gains and income on wealth that most americans hope are within reach of those who strive for them. Resources available for children including education, affordable Higher Education, Business Ownership and inherited wealth. Given the data on entrepreneurship and net worth, it appears the pathways in america are blocked from any racial and ethnic minorities. What we know from American Economic history and current data, laws, policy, institution and practices with Key Opportunities have emerged and these are diminishing the effective outcomes. To quote the opening to roosevelt institute, the 2016 report, the right of racial rules until economic and social rules work for all but are not working. In the short term have left, i like to illustrate how this works through one of the critical inputs to Economic Growth and then to innovation the focus of the longterm research. Despite the gains in the 1970s, women and africanamericans remain underrepresented in the innovation economy. Allow me too start with a few basic facts about the economy. In 2014, the median innovation worker earned 81000 compared to 36000 for all workers. In general, innovation of jobs are growing faster than other sectors in employment rates are lower. My Research Suggests that inequality exist at every stage of innovation process for women unders represented by minorities. Education, training and commercialization and i will review each in turn. Education, in 1979 the science and engineering fields were awarded to women and by 2014, this was 41. 6 . In 1970, 1 of all phds with africanamericans and by 2014, the share that went to africanamericans with 3. 5 . The trends are similar from degrees and comparable through 2014. What is preventing participation in these fields . We have clues, the recent research of economists suggest that black girls are disproportionately under recommended for calculus classes by math teachers to near the pathway to stem careers. It is a lot more research is to just the underrepresented minorities are interested in stem but not consistently supported throughout their academic career. And to set the stage of participating in the economy is to actively engage in intervention. Although participation has increased at this critical cre training stage, in 2015 white women made 18 of scientists and engineers working in science and occupation in africanamerican women, 2 in africanamerican men 3 . Unemployment for underrepresented minority men just about 4 is higher than white asian men and higher than the average for all scientists and engineers. The Unemployment Rate for africanamerican women is higher than the unappointed rate overall nearly double of scientists and engineers. There is big device with patenting as well. The third and final stages are ones where wealth has accumulated and finally my coauthor and i calculated that the gdp per capita is 0. 6 to fourpoint were percent higher than more women in africanamerican participated at the beginning of the innovation process. Thank you. And thank you to all the witnesses. I now yield myself five minutes for the first question. Im going to try to get through several questions quickly. The first question will go to doctor cook and mr. Homan. Evidence shows an additional way or pathway to Building Wealth is investment in insecurity, yet black families are less likely to own than white families. Partly because black families have fewer Discretionary Income with little to none to invest. Several of you into my good friend Derek Campbellton in the baby bond issue. So in 2014, president obama established to help low and middle class income workers regardless of color who do not have access to a 401k or pension plan to start saving for retirement. In 2017, the Trump Administration into the program. So to the three of you, how could programs like my alright or other federal saving programs help families invest comfortably to build a nest egg in the future. I would suggest that the program be reinstituted, is not exactly my research but i know the work of Derek Hamilton and sandy, i used to be her Research Assistant so quite familiar with the research. I would say, this is urgent because we are starting from so far back, were talking about boston with 30000 1 net worth ratio, that is urgent that programs like this be reinstated. I would add that definitely programs like that should be reinstated and we see the greatest wealth inequality happening in later years but i think also additional programs as mentioned the Baby Bond Program that provides Investment Opportunities and finance opportunities for people and young adult life is also essential. And i would note i do believe that the main challenge around investment for africanamerican latino families is not lack of Discretionary Income, its poverty, if youre not a homeowner its challenging to say i will invest in stock before you have solidified your household owning a house. Thank you. Anything you want to add . I would agree with all that, more avenues to taxdeferred Retirement Savings are important in taking care of the finances of the Family Credit card debt exist Student Loan Debt et cetera which keeps individuals from investing for retirement and were trying to do it for the private sector and keeping the minimums very low, high invested minimums by the nature really are sexist and racist at the end of the day because theyre the ones that have the money and able to overcome the high investment minimums and working to keep it as plain english intuitive as possible as opposed to reaching ones girl goals ins mutual fund and not stock. Let me say thank you. Earlier we had a conversation when we talk about disparities, we were talking about algorithms and it was interesting that i told the story of an africanamerican female, when i stick my hands under the water fountain, its based on people being in crowds, nine out of ten times the water does not come on and somebody next to me would put their hands under there in the water would come on. So we talk about often times people watching want to know why do we talk about race and ethnic city when we talk about disparity. And you finished the story for me. Do you want to say what you said . We were talking about how much medical research was done on a white male heart attack and crash dummies are built in the image of a male, so in the vesting industry probably not surprisingly is an industry that is been built by and for men and probably no surprise that so much about investing remind you of sports. Buying low, selling high et cetera. My last question, we have a lot of young people sitting in the audience today. And so when i think about the future and debts. I cannot help but think about the Student Loan Debt, can you share how that affects young people and millennials, who should be included in wanting to have a prosperous future. So that is definitely impacting the ability of a young person to accumulate wealth over their lifetime and africanamerican students are more likely to incur debt which means that they have to delay when they will purchase a home which means the rate at which they can accumulate equity in their home is slower than that of white students and absolutely affects how they can move forward in terms of accumulation. So going back to the baby bonds. If they had that endowment at the beginning of the young adulthood they would be able to invest in Higher Education without incurring as much if any debt if thats a choice they made for their investments. My time is up but we may be able to fit you in on someone elses question. But thank you. I now yield five minutes for questioning to the Ranking Member and my colleague congresswoman wagoner. Studies have shown that when children are introduced to opportunities in different professions at aoung age, they are more likely to enter the field. Doctor cook, i know you have done research on this and i was stunned to hear about the under recommended ap courses of people of color and young girls are seeing. What efforts are proactive Companies Taking to increase the number of women and minorities earning degrees in stamp programs and what more can be done to increase the number in your estimation . Thank you for your question. I happen to be the director of the american Economic Association program so economic to the stem field and they come to Michigan State university supported by the National Science foundation. This is intensive mentoring and is intensive in the sense that i tell them all the time, you belong here. What age do you start . This is for undergraduate. This is to encourage underrepresented minorities to do phds in economics. And one thing that they have always been told many times throughout their educational career, that they do not belong there, they dont belong in higher level math classes, they do not belong in economics classes and metrics classes in data science classes in a. I. Classes. So a lot of this has to do with men touring. So this is what i do in the two month long course. Most programs that are similar have similar focus and focus on different pathways to these careers. One that i would suggest in addition to my own is going to the center at the National Museum of American History to start clabber where children can go through the steps, eight steps related to invention and innovation. The last thing that they do is develop innovation. So you are right in terms of the beginning of your statement, the earlier the exposure they have the work showing that he and his coauthors show that children who are exposed to invention early have much better life outcomes in the accumulate wealth and many outcomes that are better. I think that is perceptive. And innovation if we are talking about the economy if this Workplace Climate. You mentioned making workplaces more friendly for women. I interviewed entrepreneurs and tech firms every october and one thing that i find is when men are kept out of a lot of project management and a lot of the projects because they have to go home and take care of children. Changing Workplace Climate is critical. Repercussions because of that, i read your issue in the Washington Center for Global Growth in july and one time you discussed within the stem participation is the effects in the doctoral programs. You touched on a little bit and how these efforts could impact whether they graduate within six years. Its how we can improve this retention. One thing with economics in that what you do is allow them to be isolated you dont have the kind of mentor ship or role modeling but you need. It goes back to the whole concept of not just diversity, but inclusion and acceptance. Ive run out of time and i have to run to the floor. I believe mr. Gonzales will be taking a seat and then i will take back questions. Questions. Thank you very much. We think the panelists for your participation today. Please start with and hosted a panel on the racial wealth gap. The middle and upperclass families are still losing wealth due to the segregation and deniability of africanamerica africanamericans. What do you think about that and what are some solutions to amend these action it is interconnected. They have distinct components but there are various dollar causes that could go to exacerbate the inequities and so i feel we cant talk about one without the other beer and they are intricately related. Hell do we close the racial wealth gap. I think what is helpful in looking at any quality in the frame of wealth is that it helps us to see a multifaceted aspect that is not just getting the person to the right Education Program or household competition because all of the sting we still see in wealth and equality because its an Economic Indicator that that factor is over a generation. To address this issue is going to be comprehensive and again it is mentioned in things like employment and things the government can do is make sure that there is good adequate information understanding the data in a racialized way. It is the reparations and the role when closing the wealth gap. Do you have a view on reparations . Separately for the native americans is essential and its an important component of the country moving forward in terms of Racial Justice and i will make a note in a very oppressive economy like today even with a strong reparationthestrong repad have ongoing wealth and equality does that include any of those equations . For this participation in the economy, but one solution that i would suggest would be to augment that we are focused on closing the racial wealth gap. For example, the Progress Capital in grand Rapids Michigan is specifically focused on closing the racial wealth gap so they look at those that have positive externalities they are profit maximizing this is a less then 2yearold business that has the right kind of business on addressing the racial wealth gap and i think that there could be more of those. An and with closing the homeownership gap would that help Families Build equity and build investment . Absolutely. It is a pathway to inherited wealth. For example, if we have the same conditions that we had in 2008, i would not want Home Ownership about well okay i wouldnt want to Business Ownership either about to address the conditions that are associated with financial crisis i would say that the path to the inherited wealth is entrepreneurship not just homeownership because a lot of africanamerican families and hispanic families lost their entire intergenerational wealth in one home i now recognize the gentleman from indiana, but congressmen for five minutes serious good afternoon im excited to see such a great panel and appreciate the chair and Majority Holding this hearing this is the discussion that needs to be ongoing and Much Research has been dedicated to this area. I was having a debate with a unintelligent frienwithinintelld he was chastising me and desist from that we in Public Policy to frequently asked question of whats gone wrong instead of a more thoughtful question of what went right in individual cases when something went well for him individual or the country overall. It is from the pathway to success but a lot has to go right to break free and get to that success. Kind of that principle that every happy family but his point was we should find what works and extrapolate from that and io the microcosm instead of talking about the grand broad sweeping policies that might not pan out in practice. I wondered if you might talk about a specific example, maybe a program, maybe a group or community that came together and was able to break through the barriers. I wonder if you could talk to me about that. Via initiative that worked, childrens savings accounts which were proposed by and he really shifted the focus from income to recognizing the importance of the asset accumulation. It demonstrated lowincome households and they do save and invest. The issue if we cannot sav is wr way out of the racial wealth gap because it wasnt created as a result of not saving. It was created as a result of Structural Racism and discriminatory policies and practices. What are some of the examples of practices that have worked and perhaps fully closed the g gap. It hasnt been tested and the determination was that it was almost close the wealth gap if creativity american class was the policy of the 40s and 50s and created massive subsidies and Home Ownership and education. Its an example of what can move people forward in its greatest Economic Security its designed to dea do with the wealthy and c assumptions about the middle income and high income while the value and to work with the council by factoring in to the financial planning. A big fan of your career i thought you closely and appreciate some of the work that youve done with this new venture and i heard something you said earlier which i found interesting. Hi minimums are inherently racist and sexist. How do we monitor the burdens that hold firms to the highest levels of investments because they are Holding People back and keeping people out of a system that we otherwise want the system and its something that the Ranking Member of that i now had to step out but she has been really passionate about is making sure that we have a thoughtful best interest policy coming out of to enable and empower those to get the advantage of the Financial Planners. I appreciate the work youve done to ensure everyone has a Financial Planner they can help rely on. Thank you for your leadership and to all of those who come here today not only to testify. Its to the issue that we are discussing today. The past four decades it skyrocketed nearly half of all since 1986 as you know its going to the top 1 of the households were the top 1 controls 42 of the nations wealth. Those by the bottom 90 is rapidly shrinking. Youve spoken about the district already and some of you in your testimony here today, the massachusetts Congressional District which includes boston, one of the most diverse and unequal districts in the nation, the households have 247,500 while black households have a ha median net worth of just 8 for the work that we have to do none of this happens in a vacuum. This is as much an indictment of our reaction as it is the federal governments role in selectively facilitating the wealth building of some whale excluding others. But we are not here today just to double down on the problem. We are here to be solution for this and many of you have reference to legislation referenced the legislation introduced in partnerships in the bicameral legislation would receive up to 47,000. That is money towards tuition from a down paymen,down paymentr investment in Small Business and this is something that is radical. In the threemile radius Life Expectancy by 30 years we need to be doing something radical and bold to address that area whether or not they are measured proportionate to the problem given the inequitable policies that have caused the wealth gap and the magnitude that you indicated you call it radica ral and i collect Old Solutions are needed and bab debuted on this recommend this solutions. You mentioned the data from boston and was gathered with the Data Collection effort of course how great the problem is if there is a strong need to do something about that and i know that derek feels that the forming of your bill has been approved on his concept by adjusting annually the amount that could be contributed to the endowment. So it is contributing to helping enlighten us about what is needed and we need Additional Data. I would argue Additional Data is important and your bill would ask to gather more information about providing Additional Information on the wealth of families and i think that is only beneficial. Again since we arrived here because of policies the path forward is going to require policies so in my remaining time do you mind taking off the litany of legislative solutions that you are supportive of because you did include the bb bond. We also have things like full employment with the high minimum wage with restaurant workers and wthen we also have touted medicare for all because the medical cost is the number one source for bankruptcy. We also again have the collecting data and making sure that there is a racial wealth divide because we can look at them and have been understanding who ithem understandingwho is gd whether it is going to increase the divide or bridge. Thank you. I will be yield back. The congressman is recognized for five minutes. Thank you for holding todays hearing on a critical topic. I want to dive into a little bit on the education side. I want to look at it from a couple different angles from college and phd and k12. Doctor cook, in your issue brief to discuss the relationship between female and minority participation in the phd programs in these age groups compared to the relatively low where age inventions. While it is important to focus on i think there are good paying jobs that require the skills that can be obtained with two year and College Degrees especially in my home state of wisconsin but can it play in addressing the discrepancies of this than participation. One thing i want to stress is giving the attainment of that was signaling a required twoyear degrees and specialization. Special programs as massachusetts to focus on advanced manufacturing those degrees are twoyear, four year, so on so we have to have force that is adequately prepared so we have to prepare any way we can, but that is a moment that still has to come no matter whether it is a two year degree, four year degree, six or ten. I am going to go backwards and dive in a little bit if i can. I look at the discrimination and how that plays a role for the Young Students trajectory into the workforce providing kids into the education informing them about the courier opportunities and ultimately chipping away at some of the Empirical Data that we have leaves a lot to be desired. As i look at this, i think theres a lot of kids that do not provide them the opportunities to put them on a path to a better life and in particular i look at the School Choice and innovative k12 programs that exist in the state and help of School Choice is giving particularly underrepresented minorities an opportunity not to obtain an education walked into their specific zip code for a broad american dream. Can you comment on if any of your research has looked into School Choice in particular as a way to impact the minorities pursuing a degree in the field . Mining research hasnt touched on that but my evidence with respect to School Choice there are a lot of things that can be done to do not involve the sort of grand plans related to School Choice on that level. If we just had stores where there were not all the cool toys, scientific toys associated with boys rather than girls, all thalso pink things, fluffy and uninteresting and all the things related to star trek, there are simple things that could be done. There are things that can be done that dont require much money. Next time you run into party center ask why all the rockets are over there. A lot of things that we brought up today are informative and helpful and i think there could be Additional Research to the impact of the School Choice in particular underrepresented minorities to obtain that Early Education to get them on the track early. Ive had them on the opportunity to see that firsthand in southeast wisconsin and in other areas of the state where ivy league School Choice is given to individuals who are from areas where maybe the local school is in the right fit for them in opportunity and a helping hand and i think it would be uniquely impactful. That is an area we can continue to explore. I appreciate everyone being here and i will yield back. The chairwoman recognizes the gentleman from north carolina. Ms. Adams is recognized. Thank you madam chair and thank you for convening the hearing. Many of us here have been shouting about fighting for and researching these issues for decades. Having this conversation is long overdue. Let me get right to my questions. What have local and federal policies done to create the wealth gap and what are some of your proposed solutions . So, certainly i can give one example with respect to federal policy. The destruction of black neighborhoods with revitalization cannot be understated. One of the things we know and i will get to my argument quickly. This will not take long. The highest number was 1899. There is still a mediumsize team of one. What you did is to break all the social network and what you did with revitalization was these communities were further separate it from the businesses and economic activity. Not being able to take full advantage of the bill, that is another policy. They are not just in one place. Were you asking me for recommendations or just to name some of the policies . For bringing the new engine change and innovation to the floor that is something that can be pushed more and there can be more outreach and engagement with respect to women. Thank you for passing the act. The idea is before you now and those can encourage innovation by women and underrepresented minorities simply by counting them that is an important part of it and i would say your support for the association. Whats on your opinion of the effort is your opinion on the current efforts of closing the gender pay gap we know that there isnt a lot of transparency and im curious about what you think. The Research Tells Us that the gender pay gaps are deaf decades away for closing and 200 years for latin which is very little progress. Companies today tend to double down on what theyve been giving to close it. Active inertia in which they do the things they have been doing and continue to do more of it. Where it has been successful is where the ceos simply decided to close the pay gap and have just done it. Does any other witness have a solution of it becoming more transparent in their data because often times they dont know what that is. I think that transparency and wages and salary is essential for closing all of these gaps. People often dont know how much the person next to them doing the same job as earning and people should be able to discuss the pay with each other. The average pay for workers by gender and by race and ethnicity in certain categories should be publicly available, not by individual names necessarily but by category so people have a better sense of where they fall on the continuing, but the transparency is absolutely essential. The Companies Need to name these challenges. Those type of programs is required in the corporate sector. Thank you. I will yield back my time. Now recognizing the gentleman from ohio, mr. Gonzalez you are now recognized for five minutes. Thank you for leading this important hearing and thank you, everybody for your participation. The data is clear and overwhelming i am thrilled we are starting to have conversations about how we can fix this. But the fact that they are taking place in a serious manner are important so i just want to thank you for all of your contributions today and in general. One area that id like to focus on with respect to wealth inequality is borrowing costs and money cost. The reality is if you are borrowing at a five or 4 rate 3 rate compoundinof 3 rate col and Building Wealth can occur it can be difficult if they are ten, 20, 100 . So i guess that i will start with specifically in the testimony you discuss how women are more likely to receive highcost loan such as subprime loans. How could the use of the Financial Technology address this by providing more access to credit i know we have some issues but i want to talk about the opportunity. Given appropriate Financial Information and education, women are extremely savvy decisionmakers and they were unfairly targeted and at the same level of Credit Scores and repayment ability, they were targeted with much higher Interest Rates and this really undercut their ability to build wealth. I think there are a lot of opportunities out there for products and services for women to really help to close the gap. It is absolutely essential because it isnt just about how much you are earning in terms of interest. Its how much you are not paying and the other types of fees. I think it is value neutral depending where you apply it and in this instance it creates really exciting opportunities. In your report you discuss how mens worships can be valuable within the field. Can you give some specific examples representing the question earlier what examples have you seen that have worked very well . One example that comes up in my research is james west they were at t and used to have one of the sweeping programs promoting equity so i thought of underrepresented minorities and he had a distinguished career of invention including those on the path and teams, for example so this is where a lot of women and underrepresented minorities get excluded. My Research Shows single set schemes are less productive than coed teams, so we are leaving a lot of money on the table. That is a sort of concrete way that there can be changes made. It makes a lot of sense. You provided the means and there is a huge gap between single male and female versus 3200. The bigger gap or the one i wish we could talk about is the 78,000 then i say that what i mean is i believe one of the main drivers with a lot of problems in Society Today is the breakdown of the family. I think we have seen that across the entire society and we know and this is why it is so important one of the biggest drivers is financial stress. My hope is what we will see is a world where we have more families staying together because if we truly want to rebuild this country we have to rebuild our families and with that i will yield back. Thank you. The chairwoman now recognizes the gentleman from texas. You are now recognized for five minutes. Thank you for holding the hearing on such an important topic to many of us and its not just to some of us that maybe minorities but it does impact those to the nations economy. For 200 years it will take 200 years to catch up and use african american, 100. I dont think that we are going to be around to make any of those rewards or games or whatever that might be because im just completely astounded by that. I knew it was bad until you see the numbers, you dont get how bad it is. I know there seems to be the individual choice if they just decided to do that they could. The reality is your zip code makes a big difference because both we are faced with isnt something that can come overnight or that one or two walls can pass and we fix it. Its the infrastructure, its everything together that have existed. I am somewhat perplexed trying to figure out because those are great policy interventions, but we have done some of that already. And we have to take the horse to the water but you cant take the horse drink the water. Theres equal pay for equal work. How do we get the horse to drink the water and get engaged and quickly, everybody we have maybe less than a minute for each of you. I think that it will take a package of policies to dismantle the Structural Racism that exists so its not just one policy and perhaps it didnt work because one policy was tried at a time, but the combination of a package of changed policies that are intended to change. Im not sure but i dont think the analogy is the horse isnt taking the water main in the communities of color are not willing to take what is needed to create a stable middleclass economy, so theyve never provided that type of stability. For the first time we have to do an investment that was done for the disenfranchised minorities. I took the horse and water and aalpha g other g. A littlet different talking about how the leaders can come together. To take that relationship into something with the reinvestment act and Housing Developers can really take the incentives and other tools to build in Affordable Housing, etc. We can put it there but they may not do it. We have to realize these are not just policies that benefit a small subset of the organizati organization. If there is a community that isnt living up to its full potential because they are being denied opportunities in the labor market for example or if they are being denied housing because of discriminatory policies, that impact is not just a particular person or that particular community, it impacts the entire nation and the ability to grow economically, so i think that we are very shortsighted when we think about the policies benefiting only a small subgroup rather than the nation as a whole. Coming u at this from a prive perspective if i could change one thing you would be to have where we see the gender pay gap is where women begin to have babies and this is despite the research that a minority of companies in the country have this type of paid leave and despite the research that shows us that its not an expense, it is an investment that pays for itself in less than a year. If i could do one thing that is what it would be. Im working on the indulgence at this moment. The quick mero suggestion, private universities dont reveal the data like the public universities have to. All of them have 501 c. Three status and receive federal funding so if they dont supply the data we can talk about the voluntarily doing this, but those are huge universities and they have a lot of influence. This affects the entire stream we are talking about the entire innovative process thank you for all of the Witnesses Today for your testimony. First i would like to say that i have several articles thats without objection id like to enter into the record. Without objection, all members will have five legislative days within which to submit additional written questions for the assist which will be forwarded for the witnesses to response. They will have five legislative days within which to set it extraneous materials to the committee for inclusion in the record. This hearing is now adjourned. [applause]