(BATTLE CREEK, MICH.) Two studies released today by the W.K. Kellogg Foundation (WKKF) and Altarum conclude that New Orleans and Mississippi are poised for significant economic growth if their workforces are upskilled and better educated as part of a collaborative effort to eliminate racial disparities in employment, health, education and incarceration.
“The Business Case for Racial Equity: A Strategy for Growth” analyzed the economy of Mississippi and New Orleans, providing blueprints for boosting their economies and improving the quality of life for all their residents. The studies find that by 2050, Mississippi can achieve a $54 billion gain in economic output by closing the racial equity gap, while Metro New Orleans can realize a $43 billion gain in economic output.
“The studies demonstrate what advancing racial equity can mean in economic terms,” says La June Montgomery Tabron, WKKF’s president and CEO. “The data presented should inspire all leaders, sectors and communities to spearhead transformational efforts for the people of New Orleans and Mississippi. Advancing racial equity can boost economic growth in a way that helps all people succeed.”
The comprehensive studies outline the benefits for each location.
In Mississippi, closing the earnings gap would create $8 billion in new purchasing power each year, with $2.7 billion spent on housing, $1.4 billion on automobiles and transportation, $1 billion on food, $410 million on entertainment and $280 million on apparel and services. In addition, $880 million would be generated in state and local tax revenues yearly, and tax revenues would increase by $1.2 billion by 2050.
In New Orleans, under current spending patterns, consumer spending would be boosted by more than $5.5 billion in additional purchasing power, including $1 billion more spent on automobiles and transportation, $1.9 billion on housing, $700 million on food purchases, $300 million on entertainment and $200 million on apparel and services.
The studies found that as New Orleans and Mississippi work to eliminate discriminatory practices, it’s critical that they develop the skills and talents of their workers.
The Mississippi report found that by 2020, 63 percent of the jobs in the state will require education beyond high school. But only 48 percent of African Americans, 49 percent of Hispanics/Latinos and 45 percent of Native Americans have achieved some post-secondary education, compared to 60 percent of Whites. There is also a significant disparity in wages, with the average Black worker in Mississippi earning 57 percent of their White counterpart, based on age and gender, and the average Hispanic earning about 60 percent, compared to their White counterpart.
Moreover, equitable earnings for people of color would generate an additional $10 billion in wages, and the greater productivity would be associated with nearly $24 billion in higher economic output, representing a 22 percent increase in Mississippi’s Gross State Product. By 2050, with the expected growth in populations of color, closing earnings gaps would represent $14 billion in higher earnings.
In Louisiana, 56 percent of jobs will require some post-secondary education by 2020, but only 43 percent of Blacks and 37 percent of Native Americans have achieved some post-secondary education, compared to 56 percent of whites.
And, in New Orleans, the average earnings for Hispanics are 63 percent of Whites of the same age and sex, while the earnings for Blacks are 52 percent of their White counterparts. This calculates to roughly $41,000 a year for Whites, $27,000 for Hispanics and $22,000 for Blacks. Closing the gaps would generate more than $7 billion in additional yearly wages.
“We look forward to sharing these reports with Mississippi and New Orleans leaders far and wide and for the productive conversations that follow,” said Rhea Williams-Bishop, WKKF’s director of Mississippi and New Orleans programs. “The social and economic benefits to be gained by advancing racial equity are a win-win for all of us. Each of us has a role to play, whether we represent philanthropy, business, government, faith, nonprofits or individuals.”
Ani Turner, co-director of Sustainable Health Spending Strategies at Altarum, led the research for the study, analyzing data from public and private sources, including the U.S. Census, Johns Hopkins University, Georgetown University, Brandeis University and Harvard University. Local data partners in each of the places also contributed to the reports. The methodology included applying established models to estimate the economic impact of the disparities faced by people of color. A national “Business Case for Racial Equity” was released in April.
“To remain competitive in a global economy, we need the full creative and economic potential of all our people,” said Turner. “Greater racial equity will not only improve individual lives, it will increase the size of the economic pie for everyone.”
The studies offer promising strategies and real-life examples for both locations on how to advance racial equity in businesses, government and communities.
For instance, the New Orleans study cites a program that aligns education with job requirements. JPMorgan Chase and Bloomberg Philanthropies combined to give $7.5 million to prepare high school students in New Orleans for jobs in health care and technology. Aimed at students who may not be entering college, the grants will support Youthforce NOLA in providing paid internships for up to 1,200 students, to collaborate with local public high schools to redesign curriculums to include more career-based courses and provide certification for another 1,600 students in careers that will be in high demand.
The Mississippi study cites the Whole Schools Initiative, which uses an arts-integrated redesigning approach to provide high-quality education and instruction for all students. Funded by the National Endowment for the Arts, the state of Mississippi and private investment funds, more than 70 schools have participated in the program. Studies have shown improvements in math and reading proficiency scores for students at participating schools. Schools that effectively implemented the program were also found to have reduced and, in some cases, eliminated the academic achievement gap for economically disadvantaged students.
Additional next steps to take concrete action are listed on pages 34-35 of each report.
Access the full studies at http://www.businesscaseforracialequity.org.
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 create conditions for vulnerable 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.
Altarum is a nonprofit organization dedicated to transforming health and health care through ideas and action that increase value and affordability, access, and equity of care. It drives change through strategies in patient and provider incentives, population health and practice transformation. Altarum headquarters are in Ann Arbor, Michigan, with locations in Washington, D.C., and Portland, Maine. Altarum has two wholly-owned subsidiaries: KAI Research, a contract research organization and health research company based in Rockville, Maryland, and Palladian Partners, a full-service health communications firm in Silver Spring, Maryland. Learn more at altarum.org.