Signaling Support Isn’t Enough. We Must Take Action to Eliminate Racial Disparities

We’ve long known that racial injustice continues to haunt our country some 55 years after the repeal of Jim Crow and the historic gains of the civil rights movement. And yet something has happened over the last few weeks to bring long-simmering anger and frustration to the fore in a nationwide protest. Why are the cries for change so strong now, and what can we do to address them?

We can speculate that the killing of George Floyd, captured in painful detail on video, was more graphic than other images of police brutality we’ve seen in recent years. We can speculate that the disproportionate health and economic impacts of Covid-19 on Black and Brown people have compounded mounting frustrations. And we can speculate that the dysfunction and bitterness of partisan politics, which continues to create deeper divisions, has added to the already heavy burden of people of color.

But regardless of why the Black Lives Matter movement has struck a chord at this moment, we know that racial disparities and inequities in life outcomes have remained wide and persistent despite many years of supportive rhetoric from well-meaning politicians, corporate leaders, and thought leaders.

What are the solutions? Our report—The Business Case for Racial Equity: A Strategy for Growth, funded by the W.K. Kellogg Foundation—provides a roadmap for elected officials, state and federal government leaders, and corporate executives to measure the economic benefits of eliminating racial inequity and to implement solutions for addressing them. Our research shows that if we eliminate racial inequities by 2050, the nation could reap the following annual economic benefits:

• $8 trillion in additional U.S. GDP, which is more than the current GDP of every country in the world except the U.S. and China.
• An additional $3.3 trillion in earnings by closing gaps in productivity and opportunity
• An additional $2.6 trillion in consumer spending, including $330 billion on food, $860 billion on housing, $440 billion on automobiles and transportation, and $90 billion on apparel and services.
• An additional $1.4 trillion in federal tax revenues and $325 billion in state and local tax revenues.
• An increase of 0.5 percent in the long-term annual growth rate of the U.S. economy.

We know that eliminating racial inequity is the right thing to do, and the business case is an important consideration as we move beyond rhetoric and begin implementing evidence-based solutions. As state budgets are squeezed by sharply declining tax revenue and outsize expenditures from Covid-19, funding for racial equity initiatives will face increasing pressure from competing priorities. Many businesses will find themselves under similar financial pressures as they recover from revenue losses and face an uncertain economic future.

Yet the business case for racial equity shows us that we can’t afford not to invest in eliminating disparities. The long-term health of our economy and our recovery from the Covid-19-induced recession depends on it, as the president of the Dallas Fed said in a recent interview with NPR.

Our report shares solutions for eliminating racial disparities in health care, housing, education, incarceration, and employment and entrepreneurship. The following solutions for health care alone could help yield $135 billion today in lower health care spending and greater productivity:

• Improving health at birth and in early childhood through home visiting programs.
• Intervening early to prevent youth alcohol abuse with community and school-based solutions.
• Addressing local social, economic, and environmental determinants of health through place-based community coalitions.
• Addressing root causes of poor health and health disparities by improving education, housing, and other social determinants of health.
• Improving nutrition with the Supplemental Nutrition Assistance Program (SNAP) and innovative programs like Double Up Food Bucks.
• Supporting community-driven activities to improve access to food and fitness.
• Increasing access to primary and preventive care with school-based health centers.

While this list is not comprehensive, it highlights some of the efforts that are likely to yield the greatest progress on racial equity based on rigorous research and analysis. Any organization—state and federal governments, corporations, nonprofit organizations, and foundations—can play a role in making racial equity a reality.

To learn more about which racial health equity initiatives to implement in your community, the ROI of those initiatives, and a plan for implementing them, contact Erin Butto, co-director of Value in Health Care.