The pursuit of justice and fairness within large and small businesses has steadily increased in the last year, with banks like JPMorgan Chase and American Express committing billions of dollars to support underserved communities with loans, equity, direct funding, and mentorship.
Still, there are many strides society needs to take for full racial equality in business, for both social justice and economic benefits. By closing this racial equity gap, the United States gross domestic product (GDP) could see a continuous 0.5% increase a year over the next few decades, resulting in $8 trillion in growth by 2050.
Racial Inequality Is Pervasive, But Closing the Racial Equality Gap Will Improve the Economy
“Racism [simply] is systemic,” said Joel Wittenburg, Vice President and Chief Investment Officer of the W.K. Kellogg Foundation. “It seats all of our structures or institutions, and even often our relationships. The price that we pay to uphold the racist systems that we have is very, very steep. If you think about it, it spans healthcare, education, and criminal justice.”
Focusing on equity and closing that critical racial equality gap across industries is not only positive for society overall but could ultimately have a positive effect on the economy and businesses.
“In addition to being a matter of social justice, this is a business-friendly thing,” said Wittenburg. “[The projected GDP growth] accounts for things like consumer spending, tax revenues that would be increasing and then decreasing in social services, spending healthcare, things like that ... just to name a few. You could see how it could all add up to $8 trillion by 2050.”
A national study conducted by the W.K. Kellogg Foundation (in conjunction with Altarum) asserts that while racial inequities stifle economic growth, there is a path forward.
“Our Business Case for Racial Equity … shows the potential economic benefits of taking actions that will address the racial equity gap,” Wittenburg said. “We believe, especially for businesses … that advancing racial equity is a strategy for economic growth. The winning companies will be those that lean into this growth, and this can only be done if your company's leadership truly believes in this work.”
It’s a business’s responsibility to seek out these opportunities to grow and close the gap of racial equality in their company.
“The businesses that properly leverage the demographic shifts that are happening in the U.S. … like recruiting, retaining and investing in people of color [are] going to be the firms that secure the long-term competitive advantage in the marketplace,” said Wittenburg.