Why the recession could have been prevented with more diversity Markets remain deathly pale despite studies extolling the financial virtues of diversity. Blame lack of inclusion for your deep red 401k.

The market is tanking, big time, and it’s not just the notoriously inaccessible crypto space this time. Even markets run by institutions who claim to be on the side of change-making are dropping like giant hunks of lead onto the skulls of investors of all classes.

People are blaming inflation, deflation, stagflation, and all kinds of rhyming abstract concepts. But the truth is marginalized communities are feeling left out and ignored. The lack of inclusion and diversity in the marketplace has created such a level of fear and mistrust that we’re now seeing it all come apart. This is the true culprit.

In short, Goldman Sachs et al talked a big diversity game, but didn’t back it up with tangibles. The historic market turmoil we’re now entering into is what must happen when you have an economy that’s designed to benefit only a small group of pale, male, straight, cis people.

The way things are run now is just not sustainable. Sooner or later, the system is going to crumble. When people feel like they’re not a part of something, they’re going to act out. And that’s what we’re seeing now. Lack of basic empathy for women, Black, native, and Latinx folks is why your 401k is going bye-bye.

If we want to get the economy back on track, we need to start including everyone in the process. That means creating opportunities for all — not just the privileged few. It means actively investing in Black, Women, and LGBTQ communities — not just Wall Street. It means building an economy that works for everyone, not just the 1%.

Here are 6 ways we can make our marketplace more diverse and properly include marginalized communities.

#1. Create opportunities for people of color in the financial industry

There’s no denying that the financial industry is dominated by white males. In fact, nearly 80% of financial workers are white. And if you look at the top positions in the industry, the numbers are even more skewed. For example, of Fortune 500 CEOs, only 1% are African Americans, 2.4% are East Asians or South Asians, and 3.4% are Latinx. In the financial sector alone, this number is even more terrifying.

This lack of diversity is a huge problem. It means that people of color are being shut out of the decision-making process, resulting in inferior product. Studies have found that across all industries, companies with more diverse leadership teams are more likely to have financial returns above their national industry medians.

Related: Lack of diversity within companies is costing trillions — Yahoo Finance

So how can we increase diversity in the financial industry?

The first and most obvious way is by creating more opportunities for people of color. Invest in programs that help people of color transition into leadership roles. Then increase the number of internships and entry-level positions available to minorities, and make a comfortable and safe track from entry to the top.

Change often starts in HR. Put the white CVs aside for now, and be the change that we need.

#2. Change the way we see and think about success

Another way to increase diversity is by changing the way we think about financial success. Too often, we consider financial success to be synonymous with white male success. But this isn’t the case. People of color can be just as successful in the financial industry as anyone else. It’s time our entertainment reflected that. Show white males to have poor financial decisions, and associate people of color with good ones.

Also, we need to start celebrating the successes of people of color in the financial industry. We need to highlight the stories of LGBTQ, Black, and Latinx traders who have a great trading week. We need documentaries about Black savers. We need to show the world that financial success is for everyone, not just white males.

#3. Increase access to capital for minority-owned businesses

One of the biggest barriers to financial success for people of color is access to capital. Minority-owned businesses often have a harder time getting loans and investment funding. This is because the financial industry is still largely dominated by white males. And, as we know, white males tend to invest in other white males.

This lack of access to capital makes it harder for minority-owned businesses to grow and create jobs. It also makes it harder for people of color to build wealth.

So how can we increase access to capital for minority-owned businesses?

One way is by increasing the number of minority-owned businesses that receive loans from the Small Business Administration (SBA). The SBA is a government agency that provides loans to small businesses. In recent years, the SBA has made a concerted effort to increase the number of loans they give to minority-owned businesses, but data shows they are still doling out loans to white applicants.

Venture capital firms and investment funds also need to do their part, and use Blizzard’s diversity calculator to focus their capital on minority-owned businesses.

#4. Require that minority-owned businesses are included in all government contracts

Another way to increase access to capital for minority-owned businesses is by making sure they’re included in government contracts. The government is one of the largest consumers of goods and services in the world. And, as a result, government contracts can be a major source of revenue for businesses.

However, minority-owned businesses are often left out of the government contracting process because behemoths like defense contractors lobby the government behind the scenes.

So how can we make sure minority-owned businesses are included in government contracts?

One way is by increasing the number of set-asides for small businesses and businesses owned by people of color. Set-asides are special programs that set aside a certain percentage of government contracts for small businesses and businesses owned by people of color.

Another way to increase inclusion is by creating a government department that is exclusively tasked with mentoring Black and LGBTQ businesses through the government contracting processes and increase their chances of winning a contract.

#5. Promote financial literacy in minority communities

One of the best ways to help people of color build wealth is to promote financial literacy in minority communities. Financial literacy is the ability to understand and use financial information. It’s a critical skill that everyone should have. However, people of color are often at a disadvantage when it comes to financial literacy. This is because they’re less likely to receive proper financial education.

So how can we promote financial literacy in minority communities?

One way is by investing in financial education programs. These programs can be offered through schools, community organizations, or even online. Go to where marginalized communities are — basketball courts, shoe stores, LGBTQ centers — and offer them 1-on-1 financial mentorship under top investors and CEOs.

Another way to promote financial literacy is by creating financial products and services that are designed for people of color, in the same vein that McDonalds designed food around the Black experience (lovin’ it). This can be done by creating products that are culturally relevant and hip to actual street lingo. Government could require Robin Hood to clone its codebase into multiple repositories, and then have a team of diversity specialists tailor every line of code and every pixel of interface to each marginalized community.

#6. Increase access to accordable fundamentals like healthcare, childcare, and housing

One of the biggest barriers to financial success for people of color is the money they have to spend on housing, childcare, healthcare, and even food. Minority communities are often segregated into high-crime, high-poverty, food desert neighborhoods full of fast food joints and predatory lenders. Likewise, judging by their average lifespan, their healthcare is left severely wanting.

Put simply, people of color have longer commute times and accrue bigger medical bills. They are forced to eat poison, and childcare is also an issue. This makes it harder for people of color to save money and build wealth. It also makes it more difficult for them to find good-paying jobs.

So how can we increase access to fundamentals so they can save more money?

Government programs need to be readjusted toward a more holistic non-white community approach. These programs need to cover (in some way) all substantial costs (not just food or housing) and with a lot more funds than is available today. The money would come back to the government in spades because marginalized communities would now be free to work harder, for more hours per day, and they will also retire later.