courtesy of Rose
- Yemi Rose is the founder of OfColor, a startup helping workers of color build generational wealth.
- The 3-year-old business has partnered with major enterprise clients such as MetLife.
- Rose shared his insights on how small businesses could reach pay equity for employees of color.
When Yemi Rose moved to the US from Jamaica, he was shocked by the lack of financial support for people of color.
"I was fascinated at how a country that was so wealthy tolerates what we tolerate," Rose said. "We tolerate this really large racial wealth gap that if it was anywhere else in the world, we would be screaming about economic apartheid."
That revelation was part of his inspiration to launch OfColor, a financial-services company that aims to help workers of color build generational wealth, a topic employees are increasingly worried about amid talk of a recession and increased credit-card debt. The 3-year-old startup incorporates financial therapy, financial counseling, and general financial advice through coaching, content, and community organizing and sells the educational packages to enterprise clients, which pass them to their employees.
OfColor has partnered with major enterprise clients such as MetLife and focuses on the healthcare, retail, and manufacturing industries because they "have a large population of employees of color and are struggling with how to support these employees," Rose said.
"We want to give actionable intelligence to people," he added, saying that would make a generational difference.
Before starting OfColor, Rose spent 16 years workings for financial and consulting firms like Thomson Financial and KPMG.
In a conversation with Insider, Rose shared his thoughts on how small-business owners could reach pay equity for their employees of color.
Understanding America's wealth gap
America's racial wealth gap became apparent to Rose early on, as did the country's focus on race and Blackness.
"In Jamaica, everyone leads with social class and money as the way folks identify you," he said, adding that Americans led with race. "I had to learn how to be a Black man in America, specifically in corporate America."
Before launching OfColor, Rose wanted to become an expert on the systems dictating wealth across America. So he began working with employee-resource groups and researching, writing, and publishing as much as he could about the topic.
"Coming up from slavery, Jim Crow, institutionalized racism, it's resulted in disparities in everything from education, healthcare, jobs, housing, and it's really difficult, specifically for Black Americans, regardless of income, to build wealth," Rose said. "Because we just didn't get a 400-year head start."
Not every paycheck is equal
courtesy of OfColor
While many businesses have recently focused on equal pay and competitive salaries for employees of color, they need to consider that their employees may be the first or only person in their respective families to earn that wage, Rose said. That's where equity — or taking each person's circumstances into consideration when determining pay, benefits, and other factors — comes in.
"I wanted to point out to them that what they are doing is giving pay equality," he said of large corporations, "but the amount of money that employees of color are able to keep is significantly lower" than that of white employees. This is due to the earnings leakage that often occurs through accumulated medical, educational, or housing debt, he said.
For example, in a 2022 survey from CNBC and the global survey platform Momentive, 24% of Black adults reported having federal student-loan debt, compared with 14% of white adults. Additionally, in a survey by the Kaiser Family Foundation, 56% of Black adults and 50% of Hispanic adults reported having healthcare debt in 2022, compared with 37% of white adults.
With this in mind, Rose knew building OfColor would require a large-scale implementation to affect change, which is why he landed on enterprise companies as his target customers.
Pay floors and DEI workshops are not enough
courtesy of OfColor
As the topic of diversity, equity, and inclusion has become increasingly important in the workplace, corporate workshops — where experts or consultants train employees on racial bias and other concerns — have been a go-to solution for many employers. While these can be helpful for white employees to learn about the issues, companies should focus more on actively supporting workers of color by ensuring there's diversity in leadership and resources, Rose said.
Additionally, contracted positions often save companies money by limiting the cost of benefits for hires. But if an employer is looking to further support employees who may not be able to easily access or afford benefits like healthcare, it should consider putting them on the payroll full time, he said.
"Just a simple shift by an hour or two can make a really big difference in someone's life," Rose added.
Aside from reviewing pay practices, businesses could "completely fund employees' health-insurance premiums, provide nonelective retirement contributions, and fully fund their accounts up front so that the employee will be able to benefit from compound interests sooner because they have more in the market," he said.
What's more, Rose said, the future of many businesses will depend on their willingness to embed equity into all their facets.
"We know that consumers gravitate to companies that share their values, so my hope is that we're going to have more and more companies leaning in," he said.