YWCA Madison

Why focus on Racial Equity?

The Business Case for Racial Equity

In 2013, Race to Equity and Wisconsin Council on Children and Families released the Race to Equity report outlining racial disparities within Wisconsin and Dane County.

Report findings indicate that Wisconsin and Dane County have higher employment, educational and poverty disparities than the U.S. as a whole. These findings are indeed emotionally disturbing, but also have profound effects on the overall economic well-being on local, state and federal levels.

A recent Kellogg Foundation and Altarum Institute study titled, The Business Case for Racial Equity finds that closing racial and ethnic disparities would greatly increase economies on the local, state and federal levels. The following information has been pulled from the study to illustrate the impact racial and ethnic disparities have on our communities, and the benefit of closing these gaps in the future.

What are the Cost of Racial and Ethnic Disparities?

The history of racism in the U.S. has created intergenerational inequality for many individuals in health, education, housing, employment, income and wealth. Widespread disparities and unequal opportunities for communities of color is thought to have caused the U.S. to lose trillions of dollars in public expenditures and lost economic output.

  • Earnings for people of color are 30% below non-Hispanic Whites.
  • In 2009, it is estimated that disparities in healthcare are estimated to have cost the U.S. $60 billion in excess medical costs and $22 billion in lost productivity. 
  • Under the current healthcare system, disparities in preventable disease rates among African Americans and Hispanics costs $24 billion annually; this cost projected to increase to $50 billion by 2050. 
  • In 2012, 74% White families owned homes as compared to 44% African American families, 46% Hispanic families, 51% American Indian families and 57% Asian families. 
  • 3.3 million jobs go unfilled because the potential workforce is not properly trained; it is predicted that by 2020 there will not be enough college graduates to meet the demands of employers.

Potential Impact of Eliminating Disparities

According to the U.S. Census bureau, by 2018 children of color will be the majority of children. Currently the working population is 37% People of Color; this number is projected to increase to 55% in 2050. This means that in order for the economy to grow to its full potential, we must invest in the success of our communities of color. 

  • Greater income inequality is associated with shorter periods of economic growth.
  • Closing the income gap would increase Gross Domestic Product (GDP) by 20% in 2050; this is almost the size of the entire federal budget and is higher than the percentage of all U.S. health expenditures. 
  • Gains would translate to about $180 billion in corporate profits and $390 billion in additional federal tax revenues.
  • Closing the minority income gap is projected to reduce Medicaid use by 10% and other safety net expenditures by $100 billion. 
  • Closing the education income gap would have increased the GDP between $310 and $525 billion in 2008.
  • Businesses with a more diverse workforce tend to have more customers, higher revenues and profits, greater market share, less staff turnover and employees with higher levels of commitment to the company.

The above statistics and facts are just an introduction to the report and all of the ways racial and ethnic disparities impact us on a greater level than often perceived. Eliminating racial and ethnic disparities will create healthy and vibrant communities. We encourage you to continue reading the full report for more information.

Racial Justice & Equity Opportunities at the YWCA Madison

If you are interested in finding out how you can play a role in eliminating these disparities the YWCA Madison offers Racial Justice workshops and trainings. Learn more about or sign up to attend the YWCA's:

Racial Justice Opportunities in the Community

Networking Opportunities

Business Resources