BATTLE CREEK, MICH. – A study released today by the W.K. Kellogg Foundation (WKKF) and Altarum concludes that economic growth in Michigan could be far greater and provides a blueprint for boosting the state’s economy. “The Business Case for Racial Equity Michigan: A Strategy for Growth” analysis finds that Michigan can realize a $92 billion gain in economic output by 2050 if racial disparities in health, education, incarceration and employment are eliminated.
“The study details our state’s untapped economic potential,” says La June Montgomery Tabron, WKKF’s president and CEO. “Advancing racial equity will translate into an economic boom for businesses, the public sector and communities and catalyze the creativity and productivity of all Michiganders. Inequities hold our communities back and a growing number of public and private sector leaders are recognizing that everyone has a stake in creating opportunities for all people.”
According to the report, ending discriminatory policies and practices in Michigan would annually yield an additional $4 billion of spending on housing, $2 billion on automobiles and transportation, $1.5 billion on food, $625 million on entertainment, and $423 million on apparel. With these increased spending levels, state and local governments would receive an additional $1.5 billion in tax revenues, allowing them to upgrade services, such as education, public safety and infrastructure.
Reducing health disparities would impact productivity and profitability as well. Researchers estimate that disparities in health in Michigan today account for $2.2 billion in excess medical care costs and $1.9 billion in untapped productivity. Addressing these disparities could create a potential economic gain of $4.1 billion per year.
The national “Business Case for Racial Equity” study was released in April, and the new Michigan study is an updated version of research published in 2015.
“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 Business Case for Racial Equity Michigan: A Strategy for Growth” blends data with promising strategies for building equitable communities, noting that:
- Forty percent of Michigan’s workers and consumers will be people of color by 2050. Therefore, it’s critical to prepare a diverse, healthy workforce for the jobs of tomorrow so that Michigan businesses can grow and prosper. Raising levels of education and capabilities will narrow the skills gap between employer demand and available talent, lower unemployment, and enable businesses to more efficiently meet the market demands for goods and services. It’s estimated that 70 percent of the jobs in Michigan will require some post-secondary education by 2020, but today only 65 percent of whites, 55 percent of Blacks, 54 percent of Hispanics and 53 percent of Native Americans have had some post-secondary education.
- Evaluations of high-quality early childhood interventions find meaningful impacts on educational performance and other outcomes. Nobel Prize-winning economist James Heckman estimates that every dollar spent on quality early childhood education returns $13 over the long term. The Perry Preschool Program, implemented in Ypsilanti, Michigan, is one of the best-known examples of an investment in early childhood education that has demonstrated lasting payoffs. At age 40, former participants had 36 percent higher median earnings, were 46 percent less likely to have served time in jail or prison, were 32 percent more likely to own their own homes, and were 26 percent less likely to have received government assistance.
- Prenatal care through home visiting programs, such as the Nurse-Family Partnership (NFP), have improved health and other outcomes through very early intervention. NFP nurses visit the homes of low-income, first-time mothers during prenatal and early childhood periods. Both parents and children have shown improvement in health and socioeconomic status. For the mothers, the program was found to increase workforce participation, decrease smoking rates during pregnancies, and decrease the use of public assistance. Injuries, substance abuse, and crime were reduced for the children. The investment in this program has been estimated to generate net present-value savings of $18,000 per family.
Access the full study at http://www.businesscaseforracialequity.org/.
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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 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. We drive change through strategies in patient and provider incentives, population health, and practice transformation. Our 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, MD; and Palladian Partners, a full-service health communications firm in Silver Spring, MD. Learn more at altarum.org.