A recent report released by the W.K. Kellogg Foundation highlights racial equity’s potential benefits to the American economy. The 2018 edition of “The Business Case for Racial Equity: A Strategy for Growth” outlines the current under-utilization of human capital, particularly from Brown and Black communities. The findings of the report are crucial guidelines for adapting our business operations for the future.
The Current and Future State of Our Economy
The United States is the largest economy in the world, but China and India are close behind. The rapidity of their growth means the U.S. market may not be in the lead for long, and American businesses should be paying attention. One of the market’s greatest weaknesses is the fact that businesses are not taking advantage of our most valuable resource: the American people.
The American economy boomed in the mid-20th-century after African Americans and women gained the right to participate fully in the economy. However, incarceration rates, poor education for communities of color, homelessness, and the cycle of poverty continue to contribute to the lack of diversity in the American workforce today.
Fortunately, given demographic trends the workforce in America is changing. As this change continues, the American workforce will be made up of more people of color than white employees by the mid-21st-century. Consider the following statistics.
- Today, white Americans compose 62% of the current workforce.
- By 2050, white Americans will compose 46% of the workforce.
- Asian American and Pacific Islander representation will increase by 4%.
- Between 2018 and 2050, the number of Latinx in the American workforce will increase by 11%
Economic Benefits of Racial Equity
An equitable society – among being better for the world – is also better for the marketplace. The Kellogg report lists several benefits that a diverse workforce and racial equity can provide for the American economy, including:
- Increased consumer spending.
- Nearly $2.7 trillion worth of economic output.
- A smaller skills gap.
- Long-term economic growth that will be accelerated with greater racial equity.
- Greater tax revenue and support for government programs, which is vital since baby boomers are reaching retirement.
Hiring and retaining a diverse workforce is crucial for business success as we move forward into the 21st-century. Investing in education, reforming the criminal justice system, and investing in the recruitment of diverse workforcewill assist the American economy in achieving its full potential. To learn more strategies and solutions about diversifying your workplace, contact Schabel Solutions today.