Racial Disparity Costs the U.S. $2.6 Trillion in 2019-Opportunities for Michigan?

There is a moral and a financial side of discrimination that trickles throughout our socio-economic lives. The study conducted President and Chief Executive Officer Mary C. Daly  (and others contributors) at the Federal Reserve Bank of San Francisco highlights a big problem in our country and an opportunity for Michigan to realize new value. The study indicates that  in $2.6 trillion was lost out of the total $21.4 million U.S. GDP. realized in 2019 (Mathews & Saraiva, Feb. 2nd, 2021).  

While this doesn't seem like much a 10% GDP boost coming from solving our internal problems would make the difference in the next generations ability to stay on top of the global economic supply chain (that figure likely doesn't include other forms of discrimination like religious discrimination😧😱).

I wasn't able to find the study but I looked around a little on the Net. However, I suspect that this 10% isn't the total number. If we look at race alone, and what can be measured, we are going not going to capture other forms of bigotry and discrimination. The study helps highlight a problem but there may be another 10% thrown out the window somewhere (one would have to study the other forms of bigotry).

If we squint our eyes a little and imagine a slight different future outcome of strong legislation. If Michigan has a diverse population (World Population Stats) and we know 10% of our GDP going out of the window (and likely another 10%) then we have opportunities to really boost our GDP to find a competitive position in the market. While improving access to human capital isn't the only solution it has a net positive result for the state which improves our fundamentals (and many industries).

I have learned from experience the power of bigotry and hate and how deeply it can be rooted into our societies. No one really tracks the cost of discriminatory behavior (i.e. lost human capital, embezzlement, intimidation, aggressive policing, etc...) and its total damage to our society. While such behavior may seem appropriate to those who hold discriminatory views it ended in real loss to the next generation (Who cares...they are minorities right?😣).

We have opportunities to ensure that hate based behavior is tracked, have opportunities for intervention, and have opportunities to raise the human capital of the state. Current hate laws (I'm not an attorney or lawmaker) appear to be focused on very high crimes (i.e. felonies) but doesn't focus on opportunities to track the behavior and offer intervention where necessary. This is why misdemeanor and mental health services should additional flexible options in the law to provide flexibility and code incidents properly for analysis. 

Hate is a mental disease and once it spreads it can turn into extremism (i.e. what we have seen at our capitals) that lead to group aggression. Many of these people could have been steered in the right direction way before social justification for internal distortion has been realized. At present, the laws seem misaligned to modern scientific discoveries, economic development, our historical purpose, and spirit of justice. 

Human capital is based in expectation and belief. While we may be able to track some numbers much of the messages are implicit and part of the way in which people interact and find their social positions. Without proper tools, we as a state will continue to undervalue our human capital that comes from the power of diversity. Diversity (especially global diversity) can lead not only to GDP boosts but also future innovative capacity.

 

I'm studying economic cluster development and human rights protections are a necessary component to raising human capital and creating environments where innovation and trust in basic concepts of justice creates pro-growth economic environments. You can read about clustering, human rights, and individuals freedoms and how they improve economic output in the article Individual Rights and Government Influence Help to Start Economic Clusters 

Protecting diversity and fighting against hate not only makes "Common Sense" but also "Common Cents"! (I thought I did well coming up with that say.  😲😶🙊)

Mathews, S. & Catarina, S. (February 2, 2021). Fed Finds Race, Gender Disparities Cut U.S. GDP by $2.6 Trillion. Bloomberg. https://www.bloombergquint.com/onweb/fed-finds-race-gender-disparities-cut-u-s-gdp-by-2-6-trillion