World Bank Pays Race-Based Salaries and it is Immune from Law Suits


Many American families pay their undocumented immigrant housekeepers and gardeners fractions of what it would cost them to hire Americans to do the same job. Economists describe this as a reservation wage – the minimum wage that different groups of people are expected to accept due to their social and economic status. This is the same principle that the World Bank has been faye2using to deny Blacks equal pay for equal work, abusing its immunity from US courts as a shield from law suits.

In 1998, four of the World Bank’s eminent researchers, including one of the current vice presidents, conducted a statistical study entitled “Pay and Grade Differentials at the World Bank.” The preamble of their report noted that “large international organizations such as the World Bank pursue multiple objectives in hiring policies.” This includes “cost reduction”.  The report went on to say “One way to reduce costs would be to pay employees their reservation wages, implying unequal pay for equal work, or discrimination.”

The study found bias in World Bank wages from two sources.  “First, different groups face different reservation wages. Second, there is individual manager’s preference for discrimination.” This means, Africans would be paid significantly less reservation wages than their equally qualified European or American colleagues because of their socio-economic status. Since Africans – on G4 visas have fewer economic opportunities outside of the World Bank than their Caucasian colleagues, their reservation wages are much lower. It also means that Africans face additional wage reduction because of the color of their skin. In 2003, another World Bank study reaffirmed that “The gap in salary between Blacks and non-Blacks was entirely attributable to differences in race.”

The racial injustice is downright Jim Crow-esque both in its construct and consequences. This has led to the establishment of the DC Civil Rights Coalition of which my organization the National Congress of Black Women, Inc. is a part. Those who stand up and fight are subjected to retaliation. Dr. Noa Davenport, one of the world’s eminent experts on psychological abuse provided a written testimony that a Black complainant was subjected to “retaliatory mobbing” involving coordinated “emotional abuse and terror… a humiliating assault on his dignity, integrity, and professional competence.”

Nonetheless, the World Bank’s Tribunal rejected the complaint as “heated rhetoric,” ignoring five medical certificates including from a psychiatrist and multiple emergency room visits. In contrast, the same Tribunal judges accepted medical certificates submitted by a Caucasian complainant as credible evidence to substantiate her claims of psychological harm. Moreover the Tribunal ordered the Bank to pay her $200,973 to cover her legal costs, but allowed the Black complainant to cover his costs.

In 2012, when President Obama tapped Dr. Jim Yong Kim as the first minority President of the World Bank, Black employees hoped that their human dignity and rights will be fully restored. Justice for Blacks (JFB) sent the Korean American a congratulatory letter expressing their “unbounded optimism”. The letter stated: “As the first Asian-born President and as one nominated by the first African American President of the United States, you have the opportunity to make a clean break from the Bank’s dark past and initiate a new beginning based on an entirely new moral foundation, one that restores the human dignity and rights of people of African origin.”

Seemingly in response to JFB’s moral call, the President anchored his first keynote speech on Dr. Martin Luther King’s teachings. The President would later confide to some staff that he was advised by World Bank officials to drop his references to Dr. King from his prepared speech. His advisors knew that equality and justice for Blacks would mean granting them access to justice and this would subject the Bank to a floodgate of lawsuits.

Nonetheless, the President went on to say “Martin Luther King, Jr. captured the universal quest for human dignity when he said:  ‘the arc of the moral universe is long, but it bends toward justice. Dr. King’s statement revealed a fundamental optimism about the human condition, an optimism which has fueled my life and which I carry with me to the World Bank.” Sadly, soon after he settled in his position the President seemed to have come to the realization that Dr. King’s moral universe is incompatible with the Bank’s racial landscape. His deafening silence of late and his refusal to meet with the Civil Rights Coalition suggest signs of submission to the crushing weight of the Bank’s institutional culture.

In several internal World Bank meetings, the President has stated that the existence of prevalent racial discrimination is no secret to anyone. He is also cognizant of the fact that the Tribunal’s jurisprudence has been found to be biased against Black complainants by the Government Accountability Project (GAP).  This is consistent with the above noted report that the Bank’s current Chief Counsel produced that concluded: “Many Black staff are reluctant to file grievances of racial discrimination through the existing mechanisms. Therefore, it is recommended that the Bank establish a different mechanism.” Nonetheless, President Kim is pushing back against the Civil Rights Coalition’s demands for (i) establishing an external commission to investigate the Tribunal’s racist jurisprudence, and (ii) granting victims of discrimination access to justice.

As Professor Chris Simms noted in the UK Guardian (November 27, 2012), “The Bank’s failure to provide an effective internal grievance system for those harmed by [‘chronic inequalities’] suggests an organization more concerned about reputation than it is about justice.” It also suggests an organization that is more concerned about the financial consequences of a floodgate of lawsuits that granting victims of discrimination access to legal redress would entail than it is about justice. The last time institutionalized racial injustice was defended on economic and financial grounds was by slave owners before the American Civil War.

The policy that President Kim seems to have adopted is that the problem will die out with gradual progress. Meanwhile he can contribute to the gradual progress by hiring more Blacks.  But access to justice will have to wait and the new hires will have to learn to endure the World Bank’s racist culture. President Kim should be reminded Dr. King’s often cited phrase “the fierce urgency of now” was aimed at rejecting “the tranquilizing drug of gradualism”.

What people of African origin need is a systemic change for a systemic problem, not the personal commitment of the president. When it comes to addressing racial discrimination, the Bank’s history is littered with unfulfilled promises and failed reforms because it lacks accountability. African Governments must demand systemic change including an independent adjudicative process outside of the widely discredited and racially biased Administrative Tribunal.


Dr. Williams is the President and CEO and General Counsel of National Congress of Black Women,  Inc.and Commissioner, Presidential Scholars Commission Inc., appointed by President Barack Obama.

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