How do we reap the economic benefits of closing the racial wealth gap?

By 2050, the greater New Orleans region stands to realize a $43 billion gain in economic output by closing the racial wealth gap. Yes, you read that right – $43 billion. We can and should do better as a state, region and country. The long-term benefits of tackling this societal problem outweigh any short-term obstacles, and it’s the right thing to do – morally and economically.

Traditionally, the racial wealth gap has been thought about in terms of its effect on people of color. but almost all recent research on the topic proves that all people have something to gain by lessening wage disparities. Additionally, this is not about redistributing wealth by taking from someone and giving to another.

“Closing the gap” means lessening and ultimately eliminating disparities and opportunity differentials that limit the human potential and economic contributions of people of color. This is about improving policies and practices to ensure an even playing field for African Americans, Hispanics and Latinos in the greater New Orleans region who want an equitable shot at building wealth for their families and communities.

When these communities thrive, all of Louisiana will prosper. For example, research shows enabling the full creative and economic potential of New Orleanians benefits Louisiana through a 24% increase in the New Orleans economy, a projected $9.5 billion in earnings gain by 2050 and $720 million projected increase in state and local tax revenues by 2050.

Closing the racial wealth gap in the greater New Orleans region is going to require forward-thinking innovation and collaboration across all sectors. Everyone has a role to play: lawmakers, industry leaders, community organizations and businesses. Here at the Urban League of Louisiana, our response is the SEE Change Collective: a data-driven, community-oriented and outcomes-focused initiative committed to identifying policy and practice solutions to close the racial wealth gap in the Greater New Orleans region.

Since our inception, the Urban League of Louisiana has focused on supporting African Americans and other communities to secure economic self-reliance. The SEE Change Collective expands on that legacy. At its core, by increasing the wealth of African American, Hispanic and Latino communities, the SEE Change Collective is a strategy for improving the overall economy and quality of life of the Greater New Orleans region.

In order to do that, we have focused on finding ways to increase equity in three historic pathways to wealth building: home ownership, business ownership and entrepreneurship, and income and wages. The data is clear: prioritizing these areas provide the fastest way to address disparities and close the racial wealth gap.

It is no secret that homeownership is the primary way Americans begin to build generational wealth. For many, owning a home represents the foundation of achieving the American Dream. Yet historically, national policies encouraging homeownership as a wealth generator have not benefited people of color at the same rate as their white counterparts. The SEE Change Collective has explored the factors promoting and hindering homeownership as a wealth generator.

Likewise, business ownership and entrepreneurship are the most effective ways to build wealth, yet significant barriers persist in hindering the growth of small business revenue and employment growth for businesses owned by people of color in the Greater New Orleans region.

Lastly, earning a salary or wage is the most accessible (and most utilized) way to facilitate wealth generation. The SEE Change Collective will advance the creation of high-growth, high wage employment opportunities.

Whether this catches your attention for moral or economic reasons, the fact is by working together to close the racial wealth gap we can increase quality of life and safety while unleashing economic potential that has never been seen before in the greater New Orleans region. And that is beneficial to everyone.