Racism costs U.S. billions annually
Freddie Allen | 11/18/2013, 11 a.m.
WASHINGTON (NNPA) – Closing the income gap between Whites and minorities would boost earnings by 12 percent, an economic windfall of $1 trillion, for a nation burdened by debt and an anemic job market, according to a recent study by the W.K. Kellogg Foundation and the Altarum Institute.
The study, titled “The Business Case for Racial Equity,” looks at the legacy of racism in the United States and how addressing racial disparities would have a significant impact on the American economy.
The study looked at a number of racial disparities that have plagued Blacks and other minorities, including health, housing, employment, income and wealth.
“There is a tendency to frame the disparities and the gaps as a burden to the nation. Seldom do we frame it as a business case,” said Gail Christopher, vice president of program strategy for the W.K. Kellogg Foundation. “We wouldn’t be having these deficit conversations if we put our energy into making economic viability an option for people of color.”
The shifting demographics of the American population make the argument for racial equity even more compelling. The U.S. Census Bureau estimates that racial and ethnic minorities will account for more than 50 percent of the United States population by 2043. Minority births in the United States exceeded White births for the first time in 2012. Minority babies today will become the workforce of tomorrow, making critical contributions to entitlement programs largely enjoyed by a graying White population.
Yet, minority communities continue to suffer systemic discrimination that weakens the U.S. economy. The W.K. Kellogg racial equity report found that closing the earnings gap now would lift the gross domestic product by $1.9 billion.
The report also analyzed what closing the earning gap would look like at 2030 and 2050 and found even more striking results.
“Minorities make up 37% of the working age population now, but they are projected to grow to 46% by 2030, and 55% by 2050. Closing the earnings gap by 2030 would increase GDP by 16%, or more than $5 trillion a year,” the report stated. “Federal tax revenues would increase by over $1 trillion and corporate profits would increase by $450 billion.”
According to the Kellogg study, if the income gap between Whites and minorities were closed by 2045, minority consumers would account for 70 percent of all purchases.
“A consumer driven economy requires people who have the income that enables them to fuel the engines,” Christopher explained.
Failing to address health disparities continues to eat away at the United States economy’s bottom line.
“An Urban Institute study found that the differences in preventable disease rates among African Americans, Hispanics, and whites cost the health care system $24 billion annually,” the Kellogg report stated. That price tag will double by 2050 if left unchecked.
The Affordable Care Act will have a disproportionate benefit for Blacks who currently survive with lower levels of health insurance and lack access to quality health care, suffering and dying from largely preventable and chronic diseases. According to the report, 19.5 percent of Blacks lack health insurance compared to 11 percent of Whites.