Setting a baseline for the racial divide

Narrowing gap would yield big economic benefits

ELIMINATING THE VAST, longstanding racial disparities between Blacks and Latinos and Whites when it comes to jobs, education, wealth, healthcare, incarceration and more isn’t just a matter of moral urgency and justice for Massachusetts and the nation.

Closing that racial divide would deliver massive economic and fiscal benefits for the Commonwealth as well.

That’s one of the most striking findings from the Massachusetts Taxpayers Foundation’s new “Closing the Racial Gap” study, our effort to compile and distill available data on the key contributors to the racial disparities in our country and state.

Three examples:

  • If we could close the racial divide in wages, housing, investments, and wealth, the Massachusetts gross state product (GSP) would increase by approximately $25 billion over five years—the equivalent of creating 100,000 more jobs.
  • If Blacks and Hispanics graduated from college at the same rate as their White peers, the increased wages, state, and local tax collections and reduced public assistance would exceed $6 billion over the first five years for the Commonwealth and $20 billion over 10 years.
  • If Blacks and Hispanics graduated from high school at the same rate as their white peers, Massachusetts would see nearly $1 billion in economic benefits over five years—and steadily more over time–including higher tax collections, reduced public assistance, and lower incarceration rates.
Sadly, the report shows the striking lack of progress, despite the many policies and resources devoted to closing the racial divide over the last 50-plus years. And all too many disparities are more prevalent in Massachusetts than in the nation as a whole. New approaches will be necessary if we are to substantially advance the cause of racial equity and economic opportunity for all.

This report marks the first time that Mass Taxpayers, best known as a “fiscal watchdog” and source of accurate, unbiased research into policies to foster the Commonwealth’s long-term wellbeing, has taken on issues of racial inequality.

In the aftermath of the killing of George Floyd in May 2020, all of us at the foundation were dismayed, like so many others, over the persistent racial injustices occurring in our country. The foundation joined many business organizations pledging to work to end racism and address economic inequities, committing to use our voices as business leaders to ensure racist practices end.

Our concern was not only for the sake of those unfairly targeted, but also for the sustainability of the Commonwealth as a place of social and economic opportunity.

“Closing the Racial Divide” represents one large part of our commitment to fulfill the promise we made in the days after George Floyd’s death.

The purpose of this report is to provide a baseline for measuring progress from this point forward. In preparing it, we learned that there are many shortcomings in available data to quantify and document racial disparities. The data often are not collected regularly, as comprehensively as they should be, or in a consistent way.

Going forward, Mass Taxpayers will be working, in partnership with the Boston Foundation and other interested stakeholders, to develop a comprehensive catalog of information that can measure racial disparities as well as where data gaps exist. This catalog would be made available to all researchers so that we may more effectively develop metrics for measuring progress and quantify the impacts of public and private sector policy initiatives.

Meet the Author

Eileen McAnneny

President, Massachusetts Taxpayers Foundation
We have much more work ahead of us, we’re committed to doing it—and we need and invite your help. Mass Taxpayers has formed an advisory council on how we can all work together on improving and expanding the collection of racial disparities data, and we are looking for well-qualified and diverse members representing a wide range of professional expertise.

While “Closing the Racial Divide” delivers sobering warnings about how significant and pervasive racial disparities remain in Massachusetts and the nation, it also documents the enormous economic and fiscal benefits that would flow from ending them. By continuing to measure progress ever more rigorously in these efforts, we can make Massachusetts a true Commonwealth: One society, united, diverse, and equal.

Eileen P. McAnneny is the president of the Massachusetts Taxpayers Foundation.