Money Tip 007: Racial Equity is the key to Economic Prosperity
Nothing in this post is a recommendation.
Racial Equity should be forefront in working towards mass Economic Success for the US. The time is now.
By 2043, Minorities will be the majority in the US. So it’s a bit shocking to see how much of a disparity there is between average wealth of a white family in comparison to minority families.
“What is frequently overlooked in these disparities is that race is a stronger predictor of wealth than class itself. The 2017 Survey of Consumer Finances indicates that the typical black family has about $17,600 in wealth (inclusive of home equity); in contrast, the typical white family has about $171,000. This amounts to an absolute racial wealth gap where the typical black family owns only ten cents for every dollar owned by the typical white family.
This disparity has endured over time. The racial wealth gap is an inheritance that began with chattel slavery, when blacks were literally the capital assets for a white landowning plantation class. The gap continued after Emancipation, when discriminatory laws and institutions established insurmountable barriers to the American middle class for black families. Today, hundreds of years removed from chattel slavery, there has virtually never been a substantive black middle class when defined by wealth. In contrast, the implementation of FDR’s New Deal and post-war vision facilitated an asset-based white middle class to cumulatively build wealth and pass it on to their heirs.”
Below are some articles that will take you into better understanding of why this all matters, for everyone, not just minorities, for EVERYONE.
https://www.policylink.org/sites/default/files/Equity_Solution_Brief.pdf. Almost all of the quotes in this article come from this research brief. If they are sourced elsewhere, they are numbered.
This is my favorite song about race by the legend Bob Marley. “Until the color of a man’s skin is of no more significance than the color of his eyes, me say WAR.”
What Is Racial Equity?
“Racial equity is about applying justice and a little bit of common sense to a system that’s been out of balance. When a system is out of balance, people of color feel the impacts most acutely, but, to be clear, an imbalanced system makes all of us pay.”
It is a bit scary to think that so many mindsets in the United States, and let’s be honest worldwide, are based and created out of fear. But let’s be honest, we all want economic growth. But we are missing out because of systemic racism and fear. Our political system plays primarily on fear, and we all just eat it up. The old sales tactics of the 1950s focused on two ways to sell something; fear and greed. But I notice a new form of advertising taking place and that is one of educating. I like the idea to appeal to a better life and better way of treating people and the planet, instead of scaring or conning someone into buying concepts, products, or services that in the end, really do more damage than good. So when it comes to minorities earning fair wages and advancing in society, it’s sad that so many people won’t vote for change because they fear it affects their own wealth and place in society. The reality is that nothing could be further from the truth. If people are educated and well taken care of, they grow, they learn and they invent. Right now we need all the powerful minds we can create, to solve our world problems. To solve the issues that plague us here in the United States, first and foremost.
“America’s GDP was $15.6 trillion in 2012, but it would have been $17.7 trillion, 14 percent higher, or a $2.1 trillion “equity dividend,” in the absence of racial differences in incomes.
To put this large number into context, the state of California— the eighth largest economy in the world—had an annual GDP of about $2 trillion in 2012.
Raising the average incomes of people in each major racial/ ethnic group to the average incomes of non-Hispanic whites would significantly boost total earnings and purchasing power. Latino incomes would be 74 percent higher (a $16,376 annual raise), Native American incomes would be 71 percent higher
(a $16,076 raise), and African American incomes would be 61 percent higher (a $14,660 raise). The incomes of people with mixed and other racial backgrounds would increase 39 percent ($10,915), while the incomes of Asians (excluding Asian sub- groups whose incomes are above the average incomes of whites) would increase 23 percent ($7,180). In an equitable economy without systematic differences in access to education and good jobs, average incomes overall would be 14 percent higher, increasing from $34,032 to $38,704 per year. “
This is mind bending. The reality is that we should be able to grow poor areas, while maintinaing a middle and upper class. And why would it be so bad if everyone got to middle, or upper class and lived in harmony with exactly what we needed. I dream about a better world, often. One where we don’t let people starve next to where people eat like kings. One where we don’t drain the planet to sell things that we don’t need. I dream that B Coprs take over the markets and the economy isn’t hurting the planet or people anymore. And I dream about something as ridiculous as the pigment of someone’s skin, being no longer a way to manipulate and control masses of people in mass poverty and pain. How much longer do we have to live like this, in the “free” world? We aren’t free. The reality is we are making it so the rich get richer and the poor get poorer. Eradicating the middle class. And why? Brain. Wash. We have to start seeing the well being of our brothers and sisters as part of our economy. Only then, will we flourish and grow in an exponential way that heals instead of hurts.
In the article The Economies of America’s 150 Largest Metros Could Grow 24 Percent by Closing Racial Gaps they state that “America’s 150 largest metropolitan regions are home to the vast majority of the nation’s economic activity (80 percent) and population (72 percent). They are also at the vanguard of rising diversity: communities of color are driving population growth in almost all of these metros, and their economic fate hinges on whether Latinos, African Americans, and other diverse groups can participate and thrive.
Because they are home to more diverse populations, America’s largest 150 metros stand to gain much more from racial inclusion: the total gain in these metros is 24 percent, compared with 14 percent for the nation overall. While each of the largest 150 metros would experience economic gains from closing their racial gaps, the amount of these gains range widely, ranging from a low of 2 percent in both Portland, Maine, and Springfield, Missouri, to a high of to 131 percent in Brownsville, Texas. Absolute gains would range from $287 million per year in Springfield to $510 billion per year in Los Angeles. See the Appendix for a table detailing the gains for the largest 150 metros, all 50 states, and the District of Columbia.
The relative size of racial income gaps in metros generally tracks the size of their people of color populations. Portland and Springfield’s populations are more than 90 percent white, for example, while 88 percent of Brownsville’s population is Latino. Every region would reap major economic and social benefits from racial inclusion, but the 29 metros where people of color are already the majority—including most of the California and Texas metros, New York, Washington DC, Miami, Las Vegas, and several Southern regions like Jackson and Memphis—and other regions with diverse populations, would see the largest economic boosts.”
All of this really should really make these cities, the most diverse, really look at their policies, legislation, politics, and what they’re really gaining by holding people of color down instead of lifting up.
Some of the ways to accomplish the uplift is as follows.
“Strengthen education and training pathways to ensure every child can successfully reach a good job and career. Here are just a few of the many ways communities are fortifying these pathways:
—Universal preK—as the city of San Antonio and many other cities and states are striving to achieve for four- and some- times three-year olds—is a proven approach that increases lifetime earnings, boosts high school graduation rates, and decreases incarceration.
—“Cradle-to-career” efforts, like the Promise Neighborhoods Initiative now in more than 50 communities, provide children and families living in low-income neighborhoods with education, health, and social supports from birth to college to career.
—Career academies, and programs like Year Up and Code 2040, provide young people with the work-related skills and paid internships to help them land that essential first job.
—Reforming harsh, “zero tolerance” school discipline policies reduces school pushout for boys of color and keeps them on track to graduate.
—Sector-focused training efforts like Oakland’s EMS Corps and Baltimore’s BioTechnical Institute of Maryland connect people who face barriers to employment with high-quality training programs (often at community colleges) that lead to jobs in growing sectors of the economy, such as health care and technology.16
—Targeted and local hiring strategies, community workforce agreements, community benefits agreements, and construction careers programs ensure local workers can access jobs created through new development.
Conclusion
We hope the data and strategies shared in this brief catalyze new community dialogues about equity and the economy that lead
to action. The need is urgent: demographic change is swift and inevitable, yet most regions and states are not talking about what their demographic destinies suggest for their growth and development strategies. Elected leaders, advocates, business groups, foundations, planners, organizers, and others need to be debating which of the strategies listed above they should explore and advance. A critical first step is to name equitable growth as the goal, and start talking about what challenges they must address and what assets they can leverage to achieve it.
After all, the key question is not if but when. As a nation, we can ameliorate widespread inequality now, or pay the consequences later. Enlightened business and civic leaders are getting the message about the need to prepare for America’s tomorrow. Charting the future with equity as the guiding principle is a smart, bottom-up strategy to transform this country’s broken economic model into a new economy that is strong, resilient, and sustainable.”
Our top-line finding: America’s annual GDP would have been $2.1 trillion higher with racial equity—a 14 percent increase. That’s about the size of California’s economy, the eighth largest in the world.
Drilling down to metros, we found even more dramatic potential gains. The country’s largest 150 regions could collectively grow their GDP by 24 percent by addressing racial inequities, compared with the national gain of 14 percent. Los Angeles stands to gain the most: $510 billion per year. But even the smallest potential gain—in Springfield, Missouri where the population is 91 percent white—is still in the hundreds of millions ($287 million).
In other words, the economic return on racial equity is enormous. What’s more, this “equity dividend”—for people, places, and the nation—will only continue to grow as people of color become the majority.”
All in all, America is becoming a true world nation that is increasingly multiracial and multicultural. In 1980, 80 percent of the population was White. By 2044, a majority of Americans will be people of color. We really need to focus on this racial inclusion and equity as a key stratefy for our economic prospering of this country. Not just for us to thrive but to set the example for all the countries that emulate us, and there are still a ton that do. “After all, the key question is not if but when. As a nation, we can ameliorate widespread inequality now, or pay the consequences later. Enlightened business and civic leaders are getting the message about the need to prepare for America’s tomorrow. Charting the future with equity as the guiding principle is a smart, bottom-up strategy to transform this country’s broken economic model into a new economy that is strong, resilient, and sustainable.
Pull up a quick snapshot of demographic change and equity in your region or state here. Host a community roundtable to discuss demographic change and your community’s economic future using this information, or start with a staff meeting about this topic.
https://nationalequityatlas.org/node/7156
"Given the enormous human costs and economic growth consequences of anemic economic mobility and social isolation for these millions of Americans, the primary goal of the initiative is to advance the equity and economic prospects of poor and low-income Americans and of communities of color.
Drawing on scholarship across Brookings’s Economic Studies, Governance Studies, and Metropolitan Policy programs—and in collaboration with national and local policymakers, community leaders, and the Americans who experience poverty, racism, and the absence of economic opportunities first-hand—the initiative will expand supportive social networks between communities and identify innovative solutions for creating a more inclusive America.” This is one interesting initiate by RPI. Link below
Access data on your region or state’s housing burden by race, how it changed between 2000 and 2012, and how it ranks here. Download these charts to include in your next conference presentation.
https://nationalequityatlas.org/indicators?ind=7246
· Find out racial differences in homeownership in your region or state, and whether the racial gap is increasing or decreasing here. Share these charts with your social media followers.
https://www.frbsf.org/our-district/about/sf-fed-blog/racial-equity-primer/
https://www.frbsf.org/our-district/about/sf-fed-blog/racial-equity-primer/
https://www.racialequitytools.org/home
https://www.centerforsocialinclusion.org/our-work/what-is-racial-equity/
https://www.racialequitytools.org/plan/issues/economic-development
RPI
https://www.brookings.edu/about-the-race-prosperity-and-inclusion-initiative/
https://www.policylink.org/sites/default/files/Equity_Solution_Brief.pdf
