By Angela Glover Blackwell and Manuel Pastor, McClatchy-Tribune News Service (MCT)
It’s impossible to escape discussion of the economy in an election cycle, and this one is no exception. From Cory Gardner’s endorsement of the Keystone XL pipeline in Colorado, to Kansan Greg Orman proposing simplifying corporate regulations, to Mitch McConnell’s emphasis on coal for Kentucky, every candidate has a seemingly easy answer for how to improve their state’s economy and contribute to America’s growth.
For all of the talk of economic growth, however, one topic consistently missing from the conversation could hold the most promise: racial inclusion.
Today, our organizations, PolicyLink and the Program for Environmental and Regional Equity, released a new analysis of the costs of inequity — and the potential economic benefits of racial inclusion. What we found is that racial inequity costs the United States $2.1 trillion in lost GDP every year — just about the size of California’s economy, the eighth largest in the world.
In the U.S., more than half of all children under age five are of color, and we are rapidly heading toward a people of color majority. At the same time, America’s racial divides are as glaring as ever. Young people of color often live in struggling neighborhoods, attend the most challenged schools, and go on to face the highest rates of joblessness, the lowest wages, and the fewest opportunities to be economically secure and succeed over time.
America’s prosperity depends on whether these children can go on to become skilled workers, entrepreneurs, leaders, consumers and innovators. By shutting so many people of color out from meaningful economic opportunity, our country is leaving some of its best human capital on the table.
Inequities weigh even more heavily on the nation’s large metropolitan regions, which are home to more diverse populations and an outsized share of the country’s economic activity. Closing the racial income gap in the largest 150 metros would result in a 24 percent boost in their GDP. Los Angeles alone stands to gain $510 billion every year by closing its racial gaps in income. Springfield, Missouri, had the lowest potential gain, but still could increase its GDP by $287 million every year through racial economic inclusion.
Racial equity would have a positive ripple effect throughout society. More money in the pockets of low-wage workers of color would help millions of struggling families, boosting spending in local economies, generating demand for new and existing businesses, and creating jobs. It would also bring new tax dollars into underinvested neighborhoods.
This “trickle-up” model is the economic growth strategy that the nation needs. And it is exactly what more and more economists and investors say is the best way to strengthen the economy. In August, Standard & Poor’s lowered the growth forecast for the United States, warning that increasing inequality in the country is stunting economic growth. The next month Morgan Stanley followed suit, reporting that low wages and growing income inequality are slowing growth by dampening consumer spending.
The “equity dividend” — for people, places and the nation — will only continue to grow as people of color become the majority. But racial inequities are not inevitable, and they can be fixed with the right set of policies, investments and business models. Through concerted efforts to grow new good jobs and raise the floor on low-wage work, invest in human capital, remove barriers to economic participation (like the checkbox on job applications about conviction history), and expand opportunities to live in healthy neighborhoods and connect to good jobs, communities can take immediate and concrete steps toward creating an equitable economy.
In fact, some already are. Minneapolis’s mayor campaigned on an agenda to grow the city’s economy by erasing wide racial disparities, and has teamed up with St. Paul’s mayor to take a regional approach. And New Orleans’ mayor just launched a new strategy to connect its African-American men to jobs that will be created by its anchor institutions.
Of course, you can’t fix what you don’t measure. In addition to our research, our organizations joined forces to develop a National Equity Atlas — a comprehensive website that provides local leaders and policymakers with data and tools to help them understand how their demographics are changing and what strategies they can implement to advance inclusive growth.
The nation’s growing diverse population can be its greatest asset — but only if leaders make racial inclusion a priority. The way to transform our broken economy into a sustainable, resilient one is by leading with equity.
Angela Glover Blackwell is the founder and CEO of PolicyLink and is a frequent commentator for some of the nation’s top news organizations. Manuel Pastor is a professor of sociology and American studies and ethnicity at the University of Southern California. Readers may write the authors at firstname.lastname@example.org.
AFP Photo/Scott Olson