We should use remaining ARPA funds to combat racial inequity
Closing racial divides will pay off in long-term economic growth and stability
CONFRONTING INEQUITY BY race in housing, education, wealth and business investment is the smartest use of the state’s remaining $2.3 billion in American Rescue Plan Act (ARPA) funds. It is not only just; doing so contributes to a strong economic recovery. Such an investment reduces vulnerabilities when health crises and economic downturns ravage communities with concentrated inequality by race and income. And it results in a boost to our Gateway Cities at a moment of need.
Massachusetts is allocating nearly $20 billion in recovery investments. ARPA funds and the Bipartisan Infrastructure Law combine with the CARES Act and state budget surpluses to create unprecedented opportunities. We are unlikely to see federal spending levels this high any time soon. With the prospect of a changing Congress this is our chance to maximize strategic investments at little cost to the state.
Closing the racial divide in wages, housing, investments, and wealth would put the economy on stable footing and pay dividends for years to come. A recent analysis from the Massachusetts Taxpayers Foundation, a pro-business research group, showed Massachusetts’ gross state product would increase by $25 billion over five years if we were to close gaps in these key areas. According to the same report, leveling college graduation rates of Black and Latinx students to that of white students in Massachusetts would result in an additional $22 billion in state revenues over ten years.
Investments that close gaps by race also mean our Gateway Cities will receive massive support. Places like Worcester, Springfield, Chelsea and New Bedford were some of our hardest hit areas during the pandemic and the economic downturn that followed. These cities were already navigating a changing economy and their development is central to the economic growth of the Commonwealth. Strategic investments of ARPA dollars would mean an injection of funds for home ownership, education support, and capital investments.
Yet, the first round of ARPA expenditures in Massachusetts fell far short of this goal. The Coalition for an Equitable Economy proposed $1.1 billion in support to small businesses to accelerate support for inclusive entrepreneurship. Only $50 million was explicitly allocated for businesses owned by people of color.
Similarly, the first round of ARPA spending allocated a significant portion to housing, but failed to deploy deliberate investment by race, which we desperately need. According to the Baker administration, Massachusetts has the seventh highest racial homeownership gap in the country. Nearly 70 percent of White households in Massachusetts own a home, while only 36 percent of Black households do. Increasing that number is critical to overcoming the legacy of discriminatory federal programs and policies that denied lending to Black households. It would also boost investment in Gateway Cities such as Brockton and Lowell, where moderate-income homebuyers have landed in the past decade. Gateway Cities are often the recipients of home buyers leaving places like Boston, where prices have skyrocketed.
Some will argue that targeting investments by race will create division, pitting one group over another. I disagree. I spent nearly 10 years working for the United Nations on conflict negotiations in the Middle East in Iraq, Jerusalem, and Syria. When we pushed investments that resulted in generational gains for all sides, change happened. That can be the case in the United States as well. Everyone in the Commonwealth benefits when we take serious action to confront inequity. Most view benefits through a zero-sum lens: “If someone else gets money that must mean I get less.” The opposite is true in this case. Ensuring everyone gets a fair chance to thrive means more resources are generated to fund jobs, transportation, housing, childcare and more while reducing expenses. It’s a classic negotiation tactic: When there is a fight over how to divide a pie, you expand the size of the pie.Massachusetts has an opportunity to lift entire communities for a strong economic recovery while reducing vulnerabilities ahead of future pandemics and economic downturns. Targeting ARPA money to reduce disparate outcomes by race elevates the status of everyone in Massachusetts in the process. We have the resources. Will we seize this unique moment in history?
Adam Hinds is state senator from Pittsfield and chair of the Committee on Reimagining Massachusetts Post-Pandemic Resiliency. He is a Democratic candidate for lieutenant governor.