The Business Case For Racial Equity: A Strategy For Growth

April 24, 2018

The United States economy could be $8 trillion larger by 2050 if the country eliminated racial disparities in health, education, incarceration and employment, according to "The Business Case for Racial Equity: A Strategy for Growth." The gains would be equivalent to a continuous boost in GDP growth of 0.5 percent per year, increasing the competitiveness of the country for decades to come. The national study released today by the W.K. Kellogg Foundation (WKKF) and Altarum concludes that while racial inequities needlessly stifle economic growth, there is a path forward.

The report projects a tremendous boost to the country’s workforce and consumer spending when organizations take the necessary steps to advance racial equity. Led by Ani Turner, co-director of Sustainable Health Spending Strategies at Altarum, researchers analyzed data from public and private sources, including the U.S. Census, Johns Hopkins University, Georgetown University, Brandeis University and Harvard University. Their methodology included applying established models to estimate the economic impact of the disparities faced by people of color.

Key Findings

  • There’s a potential economic gain of $135 billion per year if racial disparities in health are eliminated, including $93 billion in excess medical care costs and $42 billion in untapped productivity.
  • Greater opportunity has already led to economic growth. Researchers at Stanford University and the University of Chicago have estimated that more than 25 percent of the growth in productivity from 1960 through 2008 was associated with reducing occupational barriers faced by Blacks and women. Further reducing barriers to opportunity will help drive the level of economic growth possible over the next 50 years.
  • Nine million potential jobs would be created if people of color owned businesses at rates comparable to Whites.
  • State and federal prison costs would be cut $30 billion annually if Blacks and Hispanics/Latinos were incarcerated at the rate of Whites. Currently Black men are incarcerated at nearly six times the rate of White men, while Hispanic/Latino men are incarcerated at twice the rate of White men.

The study is an update to an original report completed in 2013, and provides data and analyses that align racial equity with a clear strategy for economic growth. It is accompanied by a similar analysis and reports for WKKF’s four U.S. priority places: Michigan, Mississippi, New Mexico and New Orleans that will be released in May. Informed by local, leading researchers, the additional reports highlight the distinct history, challenges, and potential economic gains in each location.

"To remain competitive in a global economy, we need the full creative and economic potential of all our people. Greater racial equity will not only improve individual lives, it will increase the size of the economic pie for everyone."
—Ani Turner, Lead Author

Access the full report and infographics at: