How Racial Discrimination Costs Billions

As evidence piles up, more are calling for payback.
(Photo: Jamie Grill/Getty Images)
Apr 10, 2016· 1 MIN READ
Rebecca McCray is a staff writer covering social justice. She is based in New York.

There’s ample evidence that racism is alive and well—even if not everyone is ready to admit it. Yet many of the anecdotes that illustrate this unsettling reality are difficult to quantify. Now, Australian researchers say they have done just that, putting a price on the cost of racial discrimination.

Through a three-year public health analysis, researchers Yin Paradies and Amanuel Elias of the Alfred Deakin Institute for Citizenship and Globalization estimated that between 2001 and 2011, racial discrimination cost the Australian economy $44.9 billion AUS annually.

“Any public health related risk factor is going to cost an economy, and racial discrimination is one of the important risk factors that can lead to negative health outcomes,” Elias told SBS News, an Australian outlet. “If we want to reduce these economic costs that are related to the health effects of racial discrimination, then tackling or addressing racial discrimination in Australia is going to be an important policy objective.”

It’s not the first time this kind of tricky, and controversial, calculation has been made. In the U.S. in 2013, a study from the W.K. Kellogg Foundation found the income gap created by racism costs the U.S. $1.9 trillion per year. Unlike the Australian study, the U.S. study, The Business Case for Racial Equity, focused on the intersection of race, class, residential segregation, and income disparity. If racial income inequality was eliminated, the study found, the purchasing power of minorities would increase from $4.3 trillion to $6.1 trillion by 2045.

Paradies and Elias studied how often Australians experienced racism, then analyzed health costs associated with discrimination, including post-traumatic stress disorder, anxiety, depression, and other psychological disorders. They used that data to establish the average number of healthy years lost, or Disability Adjusted Life Years, by Australians who experienced racism. That number was then converted into dollar values—concluding that 3.6 percent of the country’s GDP was lost because of discrimination.

As with the Australian findings, the U.S. study concluded that inequities in access to health care and the social determinants of health, which include where people live and work, have created shorter life spans and poorer health for people of color compared with whites in the U.S.

Young black activists in the U.S. are well aware of this inequity. Chicago-based Black Youth Project 100’s Agenda to Build Black Futures calls for a public policy–based reckoning with the generational oppression that has contributed to economic inequality. Going beyond the traditional focus of reparations for slavery, Black Youth Project 100 calls for economic development funds that would move the country toward racial equity, including equal pay, access to health care for people of color, and the revitalization of low-income black communities.