Automatic retirement enrollment eliminates the racial participation gap among low-wage workers

Evidence

Participation rates alone reveal the power individual companies have in decreasing—or maintaining—the black-white wealth gap among their employees. An Ariel/Aon Hewitt study in 2012 analyzed the records of 2.4 million employees who work for sixty of the largest U.S. employers from a variety of industries (including some not-for-profit employers) and found that while retirement account balances do vary by race, participation rates corresponded to company practice rather than income. At companies with automatic enrollment, where workers are enrolled in company retirement plans by default, black and white participation was comparable, at 82 percent versus 85 percent, respectively; the gap was larger, 64 percent participation for black workers compared with 77 percent for white workers, at companies without automatic enrollment. Among low-salaried workers subject to automatic enrollment, the gap was virtually nonexistent. — Dorothy A. Brown, The Whiteness of Wealth, 386

Categorization

• QUESTION: If automatic enrollment erases the participation gap, why doesn’t it erase the balance gap? The next paragraph teases exactly this — a deliberate rhetorical setup.