There are fairly obvious reasons that posts and comments to this blog have increasingly centered on bigotry–well-meaning individuals are (reluctantly) facing up to the extent of the tribal animus that continues to fester in far too many of our fellow Americans.
Much of the reaction to that animus is expressed in moral or religious terms– the belief that racial and religious hatreds are immoral or sinful. Others point to the destabilizing, anti-democratic consequences of such bias, and still others point to the human costs to individuals who suffer from discrimination or may even be prevented from pursuing their life goals for no reason other than their religion, gender or the color of their skin.
But bigotry has economic costs as well, and they are substantial, as a Brookings Institute paper points out.
The research concludes that racial and ethnic disparities in the United States–disparities resulting from official and social discrimination–haven’t simply hurt the people who experience that discrimination. They’ve hurt us all, by depressing U.S. economic output by trillions of dollars over the past 30 years.
The researchers controlled for five variables:
employment (the percentage of people with jobs); hours worked; educational attainment (the level of education completed); educational utilization (the extent to which people are in jobs that fully use their education); and earnings gaps not explained by those factors.
Then they calculated how much larger the U.S. economic pie would be if opportunities and outcomes had been more equally distributed by race and ethnicity. Their answer? $22.9 trillion over the 30-year period.
When we fail to utilize the talents of millions of people, we shouldn’t be surprised that the result is lower prosperity for everyone. (We began to recognize that reality when large numbers of women finally entered the workforce and we were no longer failing to use the smarts and talents of fifty percent of the population.)
As J.P. Morgan & Co.–hardly a socialist enterprise– has documented, Black people represent 12.7 percent of the U.S. population, but only 4.3 percent of the 22.2 million business owners in the country. A significant reason for that disparity is the difficulty minority business-people encounter when they are trying to raise capital; Black entrepreneurs are almost three times more likely to have business profits negatively affected by access to capital.
Furthermore, barely six percent of small businesses in majority-Black communities and 11 percent of small businesses in majority-Hispanic communities have more than 14 days worth of cash on hand, compared to 65 percent of businesses in majority-white communities. Similar disparities are found in comparison of first-year business revenues: Black-owned small businesses earned 59 percent less and Latino-owned small businesses earned 21 percent less in first-year revenues than white-owned counterparts.
The J.P. Morgan report noted the effect of these disparities on the overall economy:
Closing this racial wealth gap could grow the U.S. gross domestic product (GDP) by an estimated four to six percent by 2028, adding an additional $1 to $1.5 trillion to the economy, according to McKinsey. An economy that works for more people could break down barriers to opportunity and improve how people live, from life earnings to life expectancy.
As I read the research documenting the various ways in which ostensibly neutral financial decisions reflect bias–the extent to which decisions by investors and banks are influenced by attitudes about race and gender– I keep coming back to the episode recounted by Heather McGhee, about the town that filled in its swimming pool rather than share it with Black people.
Hard as it is for me to get my head around, it’s obvious that there are a lot of Americans who choose to go without–who choose to be poor, or poorer than necessary–if the alternative is that some of their Black or Brown neighbors succeed.
If the “benefit” in that cost/benefit analysis is an outcome ensuring that Whites and people of color are equally denied an otherwise available asset, then the costs of bigotry are massively disproportionate to the benefits.
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