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“The Business Case for Racial Equity in Michigan” report released

Dana Linnane
W.K. Kellogg Foundation
269.213.9661, dana.linnane@wkkf.org

BATTLE CREEK, MICH. – The Altarum Institute and the W.K. Kellogg Foundation (WKKF) today released a report, “The Business Case for Racial Equity in Michigan,” that details the cost of failing to address the legacy of racism in the state, and the benefits to children, families and communities of advancing racial equity, including a potential increase in the state’s GDP.

Business Case for Racial Equity in MichiganAccording to the U.S. Census Bureau, more than half of the nation’s children are expected to be children of color by 2020. As businesses, policymakers and thought leaders attempt to track, analyze and ultimately manage needs related to the state’s evolving demography, the availability of data on the progress and pain points within health, education and criminal justice are critical to understanding how to shape policies to ensure stronger health, education and economic security outcomes for Michigan’s children and families.

“Our legacy of racial division has created inequities that continue to contribute to our state’s fiscal deficiencies,” said La June Montgomery Tabron, president and CEO of the Kellogg Foundation. “This report lays out the potential benefits to business, government and the economy of focusing on racial healing and addressing racial inequities. If we want to ensure all children and families thrive in our state, we must work together to find new ways to build trust and overcome the persistent barriers from our past. This is an opportunity for all sectors to succeed.”

The Michigan report is a complement to a 2013 national report, “The Business Case for Racial Equity.” Drawing research from a range of sources, including The Johns Hopkins University, the Altarum Institute and consultants from Michigan State University, Brandeis University and Harvard University, it uses statistics to explain the history of racism in Michigan and its costs – including an expensive incarceration system and a massive loss of productivity.

The report estimates the potential benefits of seizing opportunities in actively promoting equity and addressing racial and ethnic inequities in Michigan:  

  • If the average person of color achieved the average income of his or her white counterparts at any age, total Michigan earnings would increase by 7.5 percent or $16.2 billion (2012 projection). If the earnings gaps were eliminated, the increased earnings would raise the state’s economic output by a comparable percentage for an increase of $31.2 billion in state GDP;
  • Addressing the gaps in health disparities between people of color and whites could save the state $2.03 billion in excess medical costs and $1.39 billion in lost productivity.
  • Increasing the male high school graduation rate in Michigan by only 5 percent would produce crime-related savings of more than $175 million; and
  • If 70 percent of children of color, from birth through age 3 in Michigan, who are estimated to be “at risk” achieved school readiness, the present value of lifetime savings would be $4.5 billion, among others.

It also outlines the current realities and legacy effects of racial and ethnic inequities across the state, including:

  • African American babies are three times more likely to die in their first year of life;
  • In the Detroit metropolitan area, 90 percent of blacks, 56 percent of Hispanics, 43 percent of American Indians and 29 percent of Asian Americans live in opportunity-poor neighborhoods, compared to 19 percent of whites;
  • Age- and gender-adjusted earnings per person for people of color in Michigan are 33 percent lower than earnings for whites, slightly larger than the national gap of 30 percent; and
  • People of color are more likely to be incarcerated and to be victims of crime. In Michigan, Hispanics are nearly twice as likely to be incarcerated as whites, American Indians are two and half times as likely and blacks are nearly six times as likely.

“Racial inequities are caused by the unequal distribution of resources and opportunities, and affect health, education, earnings and other life outcomes. This costs Michigan billions of dollars in lost economic potential,” said Ani Turner, deputy director of the Center for Sustainable Health Spending at the Altarum Institute. “One third of Michigan’s younger generation are people of color, so tackling the obstacles that put children of color at a disadvantage is not only the right thing to do, it could be a significant driver of our collective social and economic well-being.”

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About the W.K. Kellogg Foundation
The W.K. Kellogg Foundation (WKKF), founded in 1930 as an independent, private foundation by breakfast cereal pioneer, Will Keith Kellogg, is among the largest philanthropic foundations in the United States. Guided by the belief that all children should have an equal opportunity to thrive, WKKF works with communities to help break the cycle of poverty by removing barriers based on race or income that hold back children, so they can realize their full potential in school, work and life.

The Kellogg Foundation is based in Battle Creek, Michigan, and works throughout the United States and internationally, as well as with sovereign tribes. Special emphasis is paid to priority places where there are high concentrations of poverty and where children face significant barriers to success. WKKF priority places in the U.S. are in Michigan, Mississippi, New Mexico and New Orleans; and internationally, are in Mexico and Haiti.

About the Altarum Institute
Altarum Institute integrates objective research and client-centered consulting skills to deliver comprehensive, systems-based solutions that improve health and health care. A nonprofit serving clients in the public and private sectors, Altarum employs more than 400 individuals and is headquartered in Ann Arbor, Michigan with additional offices in the Washington, D.C. area; Portland, Maine; and San Antonio, Texas. 

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