Race is a Big Topic at the 2016 DNC: Here's How Much Racism Literally Costs America

Source: Shutterstock
Source: Shutterstock

The Mothers of the Movement, a group of black mothers who have lost their children to police and gun violence, will take center stage at the 2016 Democratic National Convention on Tuesday night.

The group is expected to discuss issues facing children of color, and to make the case that Democratic presidential nominee Hillary Clinton is the best candidate to address those problems. 

Race has been an ongoing topic at the convention: First Lady Michelle Obama immediately drew race into the conversation during her speech for the DNC's opening night when she said, "I wake up every morning in a house that was built by slaves," referring, of course, to the White House. 

While the social and political consequences of racism might be familiar to convention viewers, they might be less aware of the financial cost of racial discrimination.

Turns out, data suggests that it's not just people of color who would benefit financially from closing the racial wage gap in the United States: About $2 trillion in U.S. gross domestic product is lost because of race-based pay discrimination, research suggests.

Both "The Business Case for Racial Equality," a report published by the W.K. Kellogg Foundation, and "The Equity Solution: Racial Inclusion Is Key to Growing a Strong New Economy," a study published by PolicyLink, estimate that America's GDP would increase by around $2 trillion annually — or by 14% — if the racial income gap were closed.

Michelle Obama speaks at the opening night of the DNC.
Source: 
Aaron P. Bernstein/Getty Images

There are a few explanations why that figure is so high. 

Lower wages overall generally translates into less consumption, which isn't good for businesses, and racial economic inequality can institutionalize racism by reinforcing fundamental political biases, PolicyLink argues.

Furthermore, according to the W.K. Kellogg Foundation study, if people of color were to earn as much as white people in America, it would increase corporate profits and tax revenues — benefiting both the private and public sectors.

"The earnings gain would translate into $180 billion in additional corporate profits, $290 billion in additional federal tax revenues, and a potential reduction in the federal deficit of $350 billion, or 2.3% of GDP," the study notes. 

In an interview with Take Part, W.K. Kellogg report lead author Ani Turner reflected on how this issue is so economically and socially pervasive: "We all understand that removing barriers to racial equity is the right thing to do, but ... [doing so doesn't just] benefit those who are currently being disadvantaged."

Beyond the obvious moral case for ending institutional racism, there's a compelling business case as well: By giving everyone an equal piece of the pie, we'll end up making the pie itself bigger.

Read more:
• The 2016 DNC Shows a Party That's More Liberal Than Ever — But There's Still a Big Divide
• What Does TPP Mean, and What Did the Anti-TPP Signs Mean at the 2016 DNC Opening Night?
• Why Racial Equality Is Good for the Economy, in One Chart

How likely are you to make Mic your go-to news source?

Natasha Noman

Natasha is a News Staff Writer covering global affairs. She previously reported on regional affairs from Pakistan. Natasha is based in New York and can be reached at natasha@mic.com.

MORE FROM

Owed money from a class action settlement? How to find out — and get your cash.

Owed a payout from a company because of a class-lawsuit? Here is how to get the cash you deserve.

How much you should actually spend on wedding gifts

This is what is normal — and polite — to pay for a wedding present.

7 secrets of entrepreneurs who turned side gigs into baller full-time jobs

Want to take your side hustle full time? Here's what to do before taking the plunge and starting your own company.

Why the new Senate health care bill could make your insurance more expensive

As many as 22 million people could lose their insurance coverage if the Senate's Better Care Reconciliation Act of 2017 makes it into law, and out-of-pocket costs could also rise.

These 10 chill gigs offer high pay and low stress

Workers in certain low-stress professions actually earn higher-than-average wages.

Can computer games improve diversity in hiring?

Will playing games get you your dream job? Unilever thinks so, with a new class of hires recruited using a series of online games.

Owed money from a class action settlement? How to find out — and get your cash.

Owed a payout from a company because of a class-lawsuit? Here is how to get the cash you deserve.

How much you should actually spend on wedding gifts

This is what is normal — and polite — to pay for a wedding present.

7 secrets of entrepreneurs who turned side gigs into baller full-time jobs

Want to take your side hustle full time? Here's what to do before taking the plunge and starting your own company.

Why the new Senate health care bill could make your insurance more expensive

As many as 22 million people could lose their insurance coverage if the Senate's Better Care Reconciliation Act of 2017 makes it into law, and out-of-pocket costs could also rise.

These 10 chill gigs offer high pay and low stress

Workers in certain low-stress professions actually earn higher-than-average wages.

Can computer games improve diversity in hiring?

Will playing games get you your dream job? Unilever thinks so, with a new class of hires recruited using a series of online games.