7 Investments You Can Make to Help Fund Racial Justice

Racial inequality and injustices have been in the news a lot as of late, with protests turning into riots and the conversation becoming an impassioned subject of public debate. Uncomfortable as these conversations can be, the inequalities in our society are clear and apparent, leading many to wonder what they can do to make a difference.

But what can you do as an average investor — if you’re not a politician, a police officer, or a billionaire mogul? What power do you have to effect change and bring racial equality into the equation?

It turns out your investment strategy can be a major force in the push for change in racial equality across the United States and beyond.

How to Fund Racial Justice With Your Investments

One of the biggest ways you can effect change with your investment choices is to take part in a strategy known as impact investing — specifically impact investing designed to afford urban communities with the same opportunities afforded to white communities.

By maintaining an investment portfolio that’s focused on generating returns while funding social health through the support of racial equality, you’ll not only enjoy monetary gains, you’ll sleep well at night knowing you’ve lent a helping hand in the fight against racial injustice.

Here’s how:

1. Invest in Companies That Serve Urban Communities

As a result of systemic racism, Black communities aren’t afforded the same opportunities in many ways. Many of the publicly traded companies that serve minority communities are largely ignored by retail investors, institutional investors, and asset managers, but that doesn’t mean that they don’t represent strong opportunities for growth.

Companies that serve Black communities include:

  • Affordable Housing Stocks. A major source of racial inequality in the United States is found in the housing space. According to USA Facts, Black Americans are the least likely consumers to own a home; much of this is the result of a lack of opportunity, leading to low income. There are several publicly traded financial institutions and construction companies with a focus on the provision of affordable housing, and growth in these companies will help to shrink the divide between Black and white homeowners.
  • Black Media. The vast majority of talking heads you see on the news are white. The lack of Black representation in media means the needs of Black communities don’t become well-known — after all, you can’t solve a problem you don’t know about. By investing in Black media companies, you’ll give minorities a stronger voice, which will ultimately result in a better quality of life within these communities.
  • Urban Education. One of the biggest opportunities that Black communities miss out on is a quality education. According to the Postsecondary National Policy Institute, although college enrollment is up among African American students, they are not equally represented at different institution types. Black students only make up about 12% of the student population in public institutions and 13% of the student population at private nonprofit institutions, but 29% of the population at private for-profit institutions. Only 15% of college-educated Black students attended a highly selective college, with only 8% attending an elite research institution. Moreover, only 29% of African Americans aged 25 to 29 hold a bachelor’s degree or higher, compared to about 45% of white Americans in the same age group. Without a quality education, members of minority communities may struggle to gain the skills, certifications, and employment opportunities they need to earn significant income and become successful. By investing in urban education companies, you’ll help support the improvement of educational systems within these communities, helping to solve one of the biggest problems in the racial inequality conversation.

Pro tip: You can earn a free share of stock (up to $200 value) when you open a new trading account from Robinhood. With Robinhood, you can customize your portfolio with stocks and ETFs, plus you can invest in fractional shares.

2. Invest in Companies With Management and Board Members of Color

Publicly traded companies with Black owners, management teams, and board members will also help to cure the racial divide in the United States for multiple reasons:

  • Income Divide. The highest paying positions in Black-owned companies and those with diverse leadership boards are held by minorities. As a result, supporting companies that put minorities in high-income positions will help to alleviate the Black-white income divide across the United States.
  • Addressing Minority Needs. Large companies serve the masses, and large companies owned and managed by whites are likely to create products and services that cater to the white population. By investing in companies with owners and management teams of color, you’ll be supporting organizations that are more likely to address the needs of minorities with their products and services.
  • Creating Opportunity. By investing in companies with diverse managers and that value diversity, you’ll be supporting businesses that are more likely to provide good employment opportunities to minority applicants who may not have had access to these high-paying opportunities otherwise.

3. Invest in Companies That Support Charities and Causes That Benefit Urban Communities

Impact investing is centered around environmental, social, and corporate governance (ESG) concerns. Even companies that don’t expressly cater to Black communities or have many minorities in leadership positions have the ability to effect major social change by making equitable donations to nonprofit companies that serve Black communities.

Beyond donations to nonprofit charities serving urban communities, some of the largest companies in the United States are launching social awareness campaigns related to racial equity. Some of the most significant campaigns and contributors include:

  • Nike. Nike recently flipped its famous tagline, “Just Do It,” on its head, spending millions to run an ad based on the tagline,“For Once, Don’t Do It.” The ad urged consumers not to ignore the racial divide in the United States and not to turn their back on racial diversity. Instead, the ad urged consumers to make a change to cure racial inequity, promoting the idea that nobody wins until everybody wins with the hashtag #UntilWeAllWin.
  • Walmart. Walmart recently announced its commitment to set $100 million aside to be donated through the newly formed center on racial equity. These donations will be made to companies that are focused on solving the social justice issues across the country while providing a better quality of life within African American communities.

4. Invest in Funds That Support Racial Justice

There are plenty of investors out there who don’t like the idea of picking their own individual stocks. After all, there’s quite a bit of research and time commitment that goes into choosing investments this way. However, even if you don’t choose individual stocks based on their social merits, you can still choose to invest in diversified funds that support racial equality.

In 2018, the first exchange-traded fund (ETF) focused on racial empowerment was launched. The fund, known as the Impact Shares NAACP Minority Empowerment ETF, only invests in companies that are geared toward solving the racial divide across the United States.

Although there aren’t many ETFs that focus on racial justice at the moment, the Impact Shares NAACP Minority Empowerment ETF has seen compelling performance, nearly doubling in value from March of 2020 to February of 2021. There are many ESG-centered funds out there and hopefully their success will encourage more funds to follow the racial justice theme.

5. Look Into Crowdfunding Opportunities

Thanks to the incredible technological advancements that have been made over the past few decades, you don’t have to be an angel investor to own a piece of private equity. Moreover, making small investments in the right opportunities could make a much larger impact on racial justice than you think.

A quick search for “crowdfunding platforms” online will yield a long list of companies that give you the ability to invest in small startups with big ideas. As you browse through the available companies, you’ll learn about their goals, management teams, finances, and more.

There are plenty of new companies being born every day that are owned by, managed by, and cater to minority communities. As a crowdfunding investor, you can tap into the growth of these companies while supporting their advancements in racial justice with investments of as little as $10. You might even find Black-owned startups that cater to minorities right in your community that you can support directly.

Pro tip: Before you add any stocks to your portfolio, make sure you’re choosing the best possible companies. Stock screeners like Stock Rover can help you narrow down the choices to companies that meet your individual requirements. Learn more about our favorite stock screeners.

6. Consider Peer-to-Peer Lending

A well-diversified investment portfolio will include more than stocks and private equity asset allocation. Although peer-to-peer lending is a relatively new investment strategy, it is a model that’s gaining steam because it’s returning incredibly strong yields for those who take part.

As with crowdfunding, when investing as part of a peer-to-peer lending program, you’ll have the ability to learn about the borrowers for whom you decide to fund loans. Often, peer-to-peer lending platforms will even provide investors with pictures of the people who are asking for loans and what they plan to do with the funding.

By funding loans for minorities, you’ll be providing these borrowers with access to credit and capital they may not have had otherwise. With debt and the proper management of debt being an important part of financial growth for the average American consumer, funding personal or small-business loans for minority borrowers is a great way to lend a helping hand in the fight against racial injustice.

7. Work With Financial Professionals of Color

According to CarsonGroup.com, a staggering 86.3% of personal financial advisors are white. Even so, with more than 537,000 personal financial advisors out there, plenty of them are of minority heritage.

By working with a personal financial advisor of color, you’ll be doing two key things:

  1. Helping to Solve Income Inequality. One of the biggest disconnects between races is income. According to the Economic Policy Institute, wage gaps across the United States are growing, with the Black-white wage gap among average consumers reaching 26.5% in 2019. That means, on average, a white person is likely to earn 26.5% more than a Black person with the same job. Much of this comes from a lack of access to affordable, quality education among minorities. However, the story on income goes deeper. Many minorities who do achieve a higher level of education still find the task of landing a good job or getting potential customers to believe in their new business difficult. By hiring professionals of color to help with your investing ventures, you help to reduce the income gap between whites and minorities.
  2. Invest From a Minority’s Point of View. Investing with financial professionals of color means you can benefit from their perspective on your investment options, both in terms of returns and social impact you may want to achieve. Because they know the issues they faced growing up, through college, and in their careers, financial professionals of color will likely look to help people in their communities through their investments and the advice they give their customers.

Final Word

Investment decisions should never be made solely based on the fact that a company is Black owned, caters to minority communities, or for any other single reason. However, there are plenty of minority-owned-and-operated businesses that could benefit as greatly from your investment as your investment will benefit you in the long run.

As with any other investment, investments aimed at funding racial justice should be carefully thought out, well-researched moves. By looking into what the companies you invest in are doing and ensuring that their activities are helping to cure social inequalities rather than exacerbate them, you’ll sleep well at night knowing your investments are making a difference.

Source: moneycrashers.com

CFPB makes it clear: fair servicing is back, for real this time

A new presidential administration and a clarion call from the Consumer Financial Protection Bureau has transformed fair servicing from a seemingly remote risk into a front and center mandate.

After the 2008 financial crisis, regulators enhanced long-standing fair lending examination guidelines to incorporate the concept of fair servicing. They began to scrutinize potential discriminatory loss mitigation and foreclosure practices and threatened to hold mortgage servicers accountable if such impermissible practices were identified.

Mortgage servicers prepared for the scrutiny, conducted fair servicing risk assessments, and brought in the quants to analyze their servicing portfolio for risk of disparate treatment and disparate impact — but the big discrimination actions did not follow.

Today’s regulatory environment feels different as COVID-19 has struck communities of color harder than others and equity and inclusion are at the heart of the Biden administration’s financial oversight initiatives. Whereas in the past it may have been acceptable for servicers to treat all borrowers uniformly, today, servicers are being pushed to double-down on active outreach.

Accordingly, it is crucial to refresh that fair servicing policy and create a fair servicing program, with attendant procedures, that reflects the environmental moment.

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Biden Means Business

On Jan. 26, President Biden signed an executive order committing to revitalize enforcement of fair lending laws to address the “ongoing legacies of residential segregation and discrimination [that] remain ever-present in our society.” The order pointed to the current racial gap in homeownership and the persistent undervaluation of properties owned by families of color as two such legacies.

Two days later, Acting CFPB Director Dave Uejio told staff the bureau’s twin priorities were protecting consumers facing financial hardship due to COVID-19 and racial equity.

This announcement promised additional supervisory and enforcement resources to ensure a “healthy docket intended to address racial equity.” It was accompanied by criticisms of mortgage servicer performance during the pandemic (even as servicers themselves disrupted by COVID-19 moved to remote operations and quickly began implementing new procedures to comply with a wave of requirements from regulators, legislators, and investors).

So What’s a Servicer to Do?

To be sure, mortgage servicers did not get a pass after the last financial crisis; the hammer dropped, but through a different legal vehicle. Regulators relied not on antidiscrimination laws, but on their sweeping authority to prohibit unfair and deceptive acts and practices to attack loss mitigation and foreclosure activities.

In so doing, the population of consumers who became focal points was broader, encompassing both members of protected classes and many others who were financially vulnerable.

Today’s cultural moment is potentially different than it was 10 years ago, and it is anticipated regulators will deploy the Equal Credit Opportunity Act and Fair Housing Act, and even state anti-discrimination laws, in novel ways to nudge servicers to do their part to support the equity agenda.

To that end, mortgage servicers should:

  • Clearly define the commitment to serving borrowers in a fair and equitable way. A clear fair servicing policy setting forth the expectations of the board, or management, is a must, ideally accompanied by a written fair servicing program detailing roles, responsibilities, and controls. Off-the-shelf training reciting the basics of ECOA, the FHA, and other anti-discrimination laws may check the box, but consider whether you’ll be proud showing that to the regulator when asked for your fair servicing training materials.
  • Confirm the sufficiency of outreach. At least one study has shown that borrowers in regions with a higher likelihood of COVID-19-related economic shocks and minority populations were more likely to obtain debt relief, but such results may not be sufficient to quell previously expressed policymaker concerns that investor and agency response has been insufficient to assist minority communities. The CARES Act forbearance requirements eliminated discretion regarding whether to offer forbearance, and on what terms, but servicers will undoubtedly be called upon to demonstrate that they engaged in sufficient outreach to offer borrowers of all races and ethnicities appropriate loss mitigation.
  • Lock in your LEP strategy. On her way out the door, former CFPB Director Kraninger issued guidance on how financial institutions should engage the millions of U.S. consumers for whom English is a second language. The challenge is significant, given the complexities inherent to explaining mortgage servicing, but servicers who have not thought through the process do so at their own peril, and will no doubt be called to account for a lack of preparation.
  • Document the great service you offered borrowers before making that referral to foreclosure. Hopefully a foreclosure tsunami like the one that hit during the last financial crisis can be avoided, but a backlog will surface given that foreclosures have essentially been frozen for almost a year. A good pre-referral checklist that documents outreach, consideration for a range of loss-mitigation options, and satisfaction of borrower concerns, will be critical for those called on to demonstrate to regulators their equitable treatment of borrowers. Servicers with sufficient account volume may also benefit from conducting fair lending statistical analytics regarding assistance and loss mitigation outcomes.

Mortgage servicers tend to focus on the detailed operational and technical challenges associated with regulatory requirements. Compliance with fair lending laws requires a different mindset — one that mortgage originators have long dealt with, but one that may be new to servicing operations. 

The Biden administration has made clear it will chart a course quite unlike its predecessor, and concerns over equity are likely to require servicers to build, or at least enhance, the many components of a fair servicing program.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the editor responsible for this story:
Sarah Wheeler at swheeler@housingwire.com

Source: housingwire.com

Acting CFPB head calls out industry for slow complaint response times

The new interim leader of the Consumer Financial Protection Bureau pledged to take action against firms that are slow to respond to customer complaints during the pandemic.

Consumers submitted 42,774 complaints to the CFPB portal in April 2020 as COVID-19 was spreading, the highest monthly tally ever. The CFPB received 187,547 complaints from Jan. 1, 2020 to May 31.

But in a blog post, acting CFPB Director Dave Uejio expressed concern that financial institutions have dragged their feet in addressing complaints, and said the agency was working on an upcoming report highlighting response issues. The bureau typically requires a financial company to respond to the consumer within 15 days of a complaint.

The bureau will specifically analyze disparities in how companies address complaints from minorities, he said Wednesday.

“Some companies have been lax in meeting their obligation to respond to complaints,” Uejio wrote. “Consumer advocates have found disparities in some companies’ responses to Black, Brown, and Indigenous communities. This is unacceptable.”

In a blog post, acting CFPB Director Dave Uejio expressed concern that financial institutions have dragged their feet in addressing complaints, and said the agency was working on an upcoming report highlighting response issues.

In a blog post, acting CFPB Director Dave Uejio expressed concern that financial institutions have dragged their feet in addressing complaints, and said the agency was working on an upcoming report highlighting response issues.

Uejio warned that companies doing a poor job of responding to consumers will be identified in its annual consumer response report that typically gets released in the first quarter.

Uejio has wasted no time focusing on two areas in the early days of the Biden administration: consumers’ financial hardships resulting from the coronavirus and racial equity issues.

The CFPB is also updating its web site and expanding its social media presence to reach more consumers, Uejio said.

“Elevating the voices of those consumers who are suffering due to the pandemic and from racial inequity is the most important way to ensure that the CFPB is doing the best we can for those who need our help the most at this moment in history,” he said. “The Bureau must transition from treating consumer input as mere anecdotes or stories to a world in which the experience of our neighbors, our families, and our communities serve as crucial data that drives our policymaking.”

The CFPB also is moving aggressively to rebuild and repair relationships with consumer, civil rights, racial justice, and tribal and Indigenous rights groups that have found gaps in how the bureau treats consumers.

“I have asked Consumer Response to prepare a report highlighting the companies with a poor track record on these issues,” Uejio wrote. “We will be publishing this analysis and the senior leadership of these companies can expect to be hearing from me.”

Complaints about financial products and services — and any documents a consumer provides — are sent directly to financial firms that generally must respond within 15 days. The CFPB also refers some complaints to other federal agencies. The CFPB has traditionally used its complaint database to identify companies for enforcement actions.

During the pandemic, the bureau has issued bulletins analyzing thousands of complaints it has received mentioning coronavirus and related terms. Complaints about mortgages, credit cards and credit reports have topped the list during the pandemic.

In 2019, the bureau received 352,400 consumer complaints and 81% were sent to companies for review and response. In its report last year, the bureau said that more than 3,200 companies responded to complaints sent to them in 2019.

“It is the Bureau’s expectation that companies provide substantive responses that address the issues consumers describe in their complaints,” Uejio wrote.

Source: nationalmortgagenews.com

New CFPB boss vows to get tough on military lending, pandemic relief laws

The Consumer Financial Protection Bureau’s new leader is vowing to move quickly to penalize mortgage servicers, banks and other financial companies that have failed to provide relief to military veterans and others during the pandemic.

The bureau will expedite enforcement investigations tied to the Military Lending Act and Coronavirus Aid, Relief, and Economic Security Act to ensure that the industry “gets the message that violations of law during this time of need will not be tolerated,” acting Director Dave Uejio wrote in a blog post Thursday.

Helping consumers who are suffering financially from the coronavirus pandemic is one of the CFPB’s top priorities, along with enforcement of fair lending laws and identifying unlawful conduct that disproportionately harms communities of color and other vulnerable populations, he said.

“The CFPB will take aggressive action to ensure that regulated companies follow the law and meet their obligations to assist consumers during the COVID-19 pandemic,” Uejio said. “In some cases, penalties may be necessary.”

Uejio reiterated that the CFPB, as part of its attention to matters of racial equity, will focus on banks that only took applications for the Paycheck Protection Program from preexisting customers; such decisions have had a “disproportionate negative impact” on minority-owned businesses, in the eyes of some critics.

“The country is in the middle of a long overdue conversation about race, and as we all know, practices and policies of the financial services industry have both caused and exacerbated racial inequality,” Uejio said.

The CFPB, under the new Biden administration, is breaking from recent policy tied to the Military Lending Act. Three years ago, the Trump administration refused to supervise banks and financial firms for compliance with the MLA, claiming that further legislation was necessary. The Department of Defense and roughly 30 military and veterans groups opposed the Republican position on the act, which imposes a 36% annual percentage interest rate cap for active-duty military members and their dependents.

“This is great news for our troops and their families,” Sen. Jack Reed, D-R.I., said in a press release. “The Military Lending Act makes an enormous difference for active duty members of the military, and I am pleased the CFPB will fully uphold the law once more and use the tools at their disposal to shield our troops from abusive practices,” said Reed, a member of the Banking Committee.

On COVID-19-related issues, Uejio cited six recent examples of violations of the CARES Act.

The bureau plans to investigate whether banks tapped consumers’ stimulus and unemployment insurance benefits to cover bank fees and other debts.

A crackdown also is expected on mortgage servicers that gave consumers inaccurate information about forbearances, failed to process forbearance requests and assessed late fees on borrowers. Some servicers were found to have taken payments from borrowers who had received deferments of their mortgages, Uejio said.

Student loan servicers also are in the CFPB’s crosshairs. One student loan servicer denied thousands of forbearance extensions, Uejio said.

In addition, he said, companies across many markets have misreported borrowers to the credit bureaus in violation of the CARES Act and the Fair Credit Reporting Act.

More changes at the CFPB are on the way.

“Over the coming weeks, we will also be reversing policies of the last administration that weakened enforcement and supervision,” Uejio said. “And we are planning to rescind public statements conveying a relaxed approach to enforcement of the laws in our care.”

Source: nationalmortgagenews.com

Marcia Fudge vows to end discrimination as HUD secretary

Marcia Fudge, President Joe Biden’s nominee for secretary of Housing and Urban Development, on Thursday vowed to end discrimination in housing should her nomination be approved by the U.S. Senate.

During her testimony to the Senate Committee on Banking, Housing and Urban Affairs on Thursday, Fudge said part of her priorities for HUD, “will require us to end discriminatory practices in the housing market, and ensure that our fair housing rules are doing what they are supposed to do: opening the door for families, especially families of color who have been systematically kept out in the cold across generations, to buy homes and punch their ticket to the middle class.”

She spoke of making sure the playing field is leveled and righting past wrongs, rather than simply ensuring everyone is treated the same way when it comes to homeownership opportunities.

Days after taking office, Biden signed several new executive orders that address racial equity, including a memorandum that directs HUD to both mitigate racial bias in housing and advance fair housing laws.

In a memorandum, Biden called on HUD to examine changes the Trump administration made last year to several rules, including “Preserving Community and Neighborhood Choice” and “HUD’s Implementation of the Fair Housing Act’s Disparate Impact Standard.” The agency will examine whether the Trump administration’s rules harmed access to fair housing.

If confirmed, Fudge would be the first Black woman to serve as HUD secretary in more than 40 years. Fudge’s previous work with the housing industry includes introducing legislation to help states and cities enact a speedier, more efficient process for abolishing vacant and abandoned properties.

Fudge received pushback from Republican Senators for some of her previous comments where she said, “Republicans don’t care about people of color, even a little bit. But if they do, I am willing to listen.”

However, Fudge, a U.S. Representative from Ohio, said her track record is one of bipartisanship and that she is committed to working across the aisle in her new role.

“I have the ability and the capacity to work with Republicans and I am committed to doing just that.”

The housing industry expressed its support of Fudge’s nomination, writing to the Senate Banking Committee in support of approving her.

“On behalf of the Mortgage Bankers Association, I write to support the nomination of the Honorable Marcia Fudge to serve as the next Secretary of the Department of Housing and Urban Development,” MBA President and CEO Robert Broeksmit wrote. “Since holding her first elected position as the mayor of Warrensville Heights, Ohio, and throughout her representation of Ohio’s 11th congressional district, Congresswoman Fudge has consistently supported the development of affordable housing. This experience will serve her well as HUD’s highest ranking official…I respectfully urge this committee and, in turn, the full Senate to approve Congresswoman Fudge’s nomination as swiftly as possible.”

Source: housingwire.com

Best Cities for Diversity in STEM – 2020 Edition

Best Cities for Diversity in STEM – 2020 Edition – SmartAsset

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Over the past 30 years, employment in science, technology, engineering and math (STEM) jobs has grown by almost 80%, according to a recent figure from Pew Research Center. However, there is still significant disparity in representation across gender lines and particularly racial ones: though Blacks and Hispanics combined accounted for more than a quarter (27%) of the 2016 U.S. workforce, Pew reports they totaled only 16% of the STEM workforce. Where people live, though, can be a factor in their access to companies that value a more heterogeneous group of employees. That’s why SmartAsset decided to find which cities are doing better than others when it comes to diversifying STEM workforces.

To find the best cities for diversity in STEM, we took a closer look at racial and gender breakdowns of workers in the 35 cities with the largest STEM workforces. For details on our data sources and how we put the information together to create our final rankings, check out the Data and Methodology section below.

This is SmartAsset’s fifth study on the best cities for diversity in STEM. Read the 2019 version here.

Key Findings

  • New entrants to our list, including Oakland, California at No. 1. Some cities on this year’s list didn’t rank in the past, because their smaller STEM workforces meant the Census lacked sufficient demographic data. Oakland was not in the running in last year’s version of our study for that reason, but it takes first place this year, indicating a growing, diverse STEM workforce. Two other cities that were not in our rankings last year but do appear this year are Indianapolis, Indiana (at No. 11) and Colorado Springs, Colorado (at No. 35).
  • White men still comprise a majority of the STEM workforce. In all 35 of the cities in our study, men comprise more than 60% of the STEM workforce. In terms of race/ethnicity, there are just 10 cities in which white workers comprise less than 50% of the STEM workforce and only three cities in which white workers comprise 25% or less of the STEM workforce: Sunnyvale, San Jose and Fremont in California.

 1. Oakland, CA

Oakland, California takes the No. 1 spot in our study. Even though the STEM workforce is almost 63% male, the city ranks second-best on our gender diversity index for STEM workers, just after Washington, D.C. In terms of racial makeup, Oakland’s race/ethnicity index is seventh-highest in the study. Black workers make up a little more than 8% of the STEM workforce, Asian workers make up about 22% and Hispanic or Latino workers make up more than 10%. White workers make up more than 52% of STEM workers.

2. Boston, MA

Boston, Massachusetts has the third-best gender diversity index across all 35 cities: Almost 64% of STEM workers are men, and a little more than 36% are women. In terms of race/ethnicity, white workers make up about 59% of all STEM workers, Black workers make up close to 7%, Asian workers close to 18% and Hispanic workers about 13%.

3. Philadelphia, PA

In Philadelphia, Pennsylvania, STEM workers total 38,000, two-thirds of whom are male and one-third of whom are female. White workers make up about 57% (about 21,800), Black workers make up a little more than 15% (roughly 5,700), Asian workers make up almost 17% (about 6,400) and Hispanic or Latino workers make up almost 9% (roughly 3,400).

4. Washington, DC

In Washington, D.C. the total number of workers in STEM amounts to about 49,100. The roughly 18,600 women in these jobs make up almost 38% of this total, and the more than 30,400 men make up roughly 62%. Despite this disparity, Washington ranks the best for gender diversity in our study.

In terms of race, Hispanic or Latino workers comprise almost 10% of STEM workers, Asian workers comprise less than 5% and Black workers make up more than 24% (which is the highest percentage for this demographic in the study). The remaining roughly 57% of STEM workers are white.

5. New York, NY

New York, New York has the highest number of workers in STEM across all 35 cities, at almost 215,700. Almost 68,700 women (about 32%) comprise this total, while more than 147,000 men (68%) do.

New York City ranks second best on racial/ethnic diversity in our study. About 108,800 of STEM workers in New York City, or about 50%, are white. Almost 14% are Black, about 29,500. More than 22% are Asian, almost 48,400. Hispanic and Latino workers in the field total about 12%, at about 26,300.

6. Chicago, IL

There are about 95,100 STEM workers in Chicago, Illinois. Of this total, about 68% are men and about 32% are women. More than 57% of STEM workers in Chicago are white, about 11% are Black, almost 16% are Asian and close to 15% workers are Hispanic or Latino.

7. Houston, TX

The total number of STEM workers in Houston, Texas exceeds 79,500. Almost 70% of the total STEM workers there are men, and more than 30% are women. Houston has the third-best race/ethnicity index score in the study: More than 19% of STEM workers are Hispanic or Latino, almost 20% are Asian and more than 8% are Black.

8. Los Angeles, CA

There are almost 98,600 STEM workers in Los Angeles, California. More than 68,750 of them (about 70%) are men and about 29,800 (just 30%) are women.

Los Angeles has the fourth-best race/ethnicity index in the study. Almost 26% of all STEM workers are Asian, almost 19% are Hispanic or Latino and more than 4% are Black. About 48% are white (which is the lowest percentage for this demographic in the top 10).

9. Dallas, TX

Though almost 72% of STEM workers in Dallas, Texas are men, the city ranks best overall in terms of its race/ethnicity diversity score. Black workers comprise almost 18% of the STEM workforce, Asian workers comprise more than 16%, Hispanic or Latino workers almost 14% and white workers just shy of 50%.

10. Fort Worth, TX

Of the total approximately 25,700 STEM workers in Fort Worth, Texas, about 17,600 are men (just over 68%) and about 8,100 are women (roughly 32%). In terms of race, less than 5% of workers are Asian, about 12% are Black and about 22% are Hispanic or Latino. Almost 53% are white.

Data and Methodology

To find the best cities for diversity in STEM, SmartAsset analyzed data for the 35 cities in the county with the largest STEM workforces. Specifically, we measured across the following metrics:

  • Racial diversity index. We calculated this based on the racial diversity of a city among the main Census Bureau groups using the Shannon index. Cities with a more equally distributed workforce across the racial groups received a better score.
  • Gender diversity index. This measures the number of women in the workforce compared to men. The city with the highest percentage of women in STEM jobs received a score of 100, and the city with the lowest percentage received a 0.

We averaged these two indexes to create our final score, which we used to rank the cities.

Data for both metrics comes from the Census Bureau’s 2019 1-year American Community Survey.

Tips for STEM Workers to Manage Their Money

  • Ask for a raise. There has been a rising trend of employers giving promotions without a pay raise, according to a recent survey of 300 employers by the staffing firm OfficeTeam. If you are accepting a promotion and taking on more responsibility, be sure you are asking to be compensated fairly. One of the best ways to do this is to see what other people in your occupation are making. The BLS publishes annual employment statistics that show the average hourly and annual wage by occupation.
  • Understand your paycheck. Seeking out cities that best accommodate a diverse workforce can be beneficial as you explore employment opportunities. But no matter where you live, you’ll have to pay taxes on each paycheck. See what your actual take-home pay will look like with SmartAsset’s free paycheck calculator.
  • Seek expert financial advice. As your company diversifies its workforce, make sure you diversify your portfolio. If you need some extra guidance with mapping out larger financial goals like retirement, estate planning and portfolio management, it might be worth consulting a professional financial advisor. Finding the right financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

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Nadia Ahmad, CEPF® Nadia Ahmad is a Certified Educator in Personal Finance (CEPF®) and a member of the Society for Advancing Business Editing and Writing (SABEW). Her interest in taxes and grammar makes writing about personal finance a perfect fit! Nadia has spent ten years working as a seasonal income tax assistant, researching federal, state and local tax code and assisting in preparing tax returns. Nadia has a degree in English and American Literature from New York University and has served as an instructor/facilitator for a variety of writing workshops in the NYC area.
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