In response to the Black Lives Matter movement that gained traction following the murder of George Floyd in 2020, companies in the U.S. have committed $340 billion to address racial inequity. Three years later, corporate leaders are facing headwinds that could challenge those commitments.
Now, there are concerns that an anticipated Supreme Court ruling could strike down affirmative action in college admissions. The potential impacts of the decision could extend beyond college campuses and reach into corporate America. Companies diversity, equity, and inclusion (DEI) efforts could face an even greater backlash and corporate leaders may be pressed to make the case for why this work matters.
Now is not the time for companies to step back. Instead, they must deepen their work to advance both racial and economic equity by focusing on workers and wages. In recent months, companies have seen an unpredictable economy characterized by inflation, poor market performance, and the politicization of environmental, social, and governance (ESG) issues. Some have made significant layoffs, which have hit corporate DEI offices especially hard.
But the hardship, of course, wasnt only felt by corporations. More Americans are reporting that their finances are tight because of inflation, which reduces the real value of wages over time. Inflation disproportionately impacts Black people and other people of color. Meanwhile, economists have found that high inflation has actually boosted corporate profits.
One thing has become especially clear over the last year: Companies should continue to invest in their workersand do so equitably.
Americans across demographics are united in their desire for companies to prioritize workers first and to pay a fair, living wage, according to JUST Capitals 2022 Issues Report. Meanwhile, a strong majority (77%) of Americans agree that CEOs of large companies have a role to play in addressing racial equity, and another 77% agree it is not possible to achieve racial equity without paying all workers a living wage. However, about half of Russell 1000 employees still do not make a family-sustaining wage.
Studies over the past decade have suggested links between employee well-being with productivity and firm profitability and found that higher wages for lower-income workers lead to more productive workplaces.
JUST Capitals analysis has also shown that when companies prioritize their workers, they tend to be rewarded by the market. JUSTs collection of worker index conceptsincluding two for companies determined to be DEI Leadershave outperformed their Russell 1000 benchmark since inception.
Corporate leaders should be asking questions like, How can we be sure our workers are able to sustain themselves and their families? But they should also dig deeper by asking, Which of our workers are not able to sustain themselves and their families? Are all workers getting an equitable chance to advance professionally? Answering these questions requires assessing workers financial health, and taking action on the resultsincluding wage increases, especially for low-income and hourly workers.
One of the most important ways companies can demonstrate how they are prioritizing their workers and their financial well-being is by disclosing the organizations policies and practices and communicating progress. While lifting wages can help workers weather a challenging inflationary environment, only 13% of Americas largest companies disclose some information about their workers hourly wagesmaking it difficult to determine whether these workers, including Black hourly workers, can make ends meet.
Were already seeing disclosure rise on these important measures. From 2021 to 2022 the number of companies sharing EEO-1 or equivalent data more than tripled. And while only under a quarter of major U.S. employers disclose conducting a pay equity analysis by race or ethnicity in 2022, thats a significant increase from 15% the previous year. In 2022, 24% of the Russell 1000 companies we track disclosed conducting a pay equity analysis with a specific focus on race and ethnicity. Just 9%or 85 companies have disclosed the results of these analyses.
Our JUST Jobs Scorecard, which analyzes corporate disclosure on the issues that matter most to the American public, JUST Capital found that companies leading on DEI transparency did the following:
- Perform pay gap analysis, and report pay gap ratio(s) by race and/or ethnicity, in addition to gender.
- Specify diversity and opportunity targets by race and/or ethnicity, and gender.
- Disclose an EEO-1 report or some other similarly detailed workforce diversity report by race and/or ethnicity and gender.
Tracking diverse representation across all levels of the workforce can help identify whether Black workers have opportunities to advance internally to senior leadership. Setting targets allows a company to become more intentional about how it attracts, hires, and retains Black employees. And conducting a pay gap analysis helps determine whether Black employees are being paid fairly for doing the same work as their white male peers.
The public is looking to companies to demonstrate leadership by making good on their commitments to address racial inequityand critics are looking for reasons to curb these initiatives. Its time for companies to look inwardand start by uplifting workers through wages.
Ashley Marchand Orme is the director of equity initiatives, corporate impact at JUST Capital
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
