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Racism Impoverishes the Whole Economy – The New York Times

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Discrimination hurts just about everyone, not only its direct victims.

New research shows that while the immediate targets of racism are unquestionably hurt the most, discrimination inflicts a staggering cost on the entire economy, reducing the wealth and income of millions of people, including many who do not customarily view themselves as victims.

The pernicious effects of discrimination on the wages and educational attainment of its direct targets are being freshly documented in inventive ways by scholarship. From the lost wages of African-Americans because of President Woodrow Wilson’s segregation of the Civil Service, to the losses suffered by Black and Hispanic students because of California’s ban on affirmative action, to the scarcity of Black girls in higher-level high school math courses, the scope of the toll continues to grow.

But farther-reaching effects of systemic racism may be less well understood. Economists are increasingly considering the cost of racially based misallocation of talent to everyone in the economy.

My own research demonstrates, for example, how hate-related violence can reduce the level and long-term growth of the U.S. economy. Using patents as a proxy for invention and innovation, I calculated how many were never issued because of the violence — riots, lynchings and Jim Crow laws — to which African Americans were subjected between 1870 and 1940.

The loss was considerable: The patents that African-Americans could have been expected to receive, given equal opportunity, would have roughly equaled the total for a medium-size European country during that time.

Those enormous creative losses can be expected to have had a direct effect on business investment and therefore on total economic activity and growth.

Other economists are beginning to estimate harm to the economy caused by racism in broad ways.

An important principle suggests that the person who can produce a product or service at a lower opportunity cost than his or her peers has a comparative advantage in that activity. Recent research calculates the effects of the discriminatory practice of placing highly skilled African-American workers, who might have flourished as, say, doctors, into lower-skilled occupations where they had no comparative advantage. Such practices 50 years ago — which linger, to a lesser extent, today — have cost the economy up to 40 percent of aggregate productivity and output today.

Similarly, other research estimates that aggregate economic output would have been $16 trillion higher since 2000 if racial gaps had been closed. To put that total in context, the gross domestic product of the United States in 2019 was $21.4 trillion. The researchers estimate that economic activity could be $5 trillion higher over the next five years if equal opportunity is achieved.

Right now, if more women and African-Americans were participating in the technical innovation that leads to patents, the economist Yanyan Yang and I calculate that G.D.P. per capita could be 0.6 to 4.4 percent higher. That is, it would be between $58,841 to $61,064 per person compared with $58,490 per person in 2019.

This entire line of research suggests that organizations — companies, laboratories, colleges and universities — are leaving colossal sums of money on the table by not maximizing talent and living standards for all Americans.

I have thought and written a lot about remedies. Here are a few ideas aimed at addressing discrimination in the innovation economy. First, we need more training in science, technology, engineering and mathematics (STEM), like the extensive and highly successful program once sponsored by Bell Labs to encourage participation in these fields by women and underrepresented minorities

STEM fields should not be the sole target, however, because the innovation economy encompasses more than this narrow set of subjects. Two of the last three people I’ve talked to at tech firms have a B.A. in international relations and a Ph.D. in political science. Clearly, problem-solving skills matter, but these skills are not unique to the STEM majors.

Second, there is substantial evidence of systemic racism in education, which needs to be addressed. Research shows that professors are less likely to respond to email inquiries about graduate study from Black, Hispanic and female students than from people who are discernibly white and male. A system of incentives — and penalties — could hold those responsible accountable at every level of the education and training process.

At the invention stage, such as at corporate, government and university labs, my research shows that mixed-gender teams are more prolific than those whose members are all female or male. And a large body of literature has documented the positive effects of diversity in teams. Managers at each level should be held responsible for being good stewards of the resources of their companies and promoting diverse teams and behavior and, therefore, better outcomes.

When invention is commercialized and companies sell shares to the public, the wealth gaps are stark. Seven of the world’s 10 richest people on the Forbes list are associated with tech companies that commercialize inventions. Jeff Bezos, Bill Gates, Mark Zuckerberg and Elon Musk are in the top five. None among the top 10 (or 50) is Black.

The statistics for venture capital funding are striking. In 2014, less than 1 percent of venture capital funding went to businesses founded by African-American women, and in 2015, only 2 percent of all venture capitalists were African-American.

A number of worthwhile recommendations have been made to address the lack of diversity at the commercialization stage of innovation. These include:

  • Enhancing mentoring opportunities through programs such as those of the Small Business Administration.

  • Seeking and recruiting founders to invest in places like Atlanta, and not exclusively in Silicon Valley.

  • Addressing systemic racism at every level of management and within venture capital firms.

  • Diversifying corporate boards so that senior leadership will be held accountable for diversity and workplace climate. (California has done this with women on the boards of public companies.)

The Kapor Center, a think tank that promotes participation by underrepresented minorities in tech fields and education, has proposed noteworthy remedies at many stages, including at the pre-college level.

The social compact most societies have with their governments is that standards of living will rise continually and that each successive generation will be better off than preceding ones. We are robbing countless people of higher standards of living and well-being when we allow racial discrimination to flourish from generation to generation.

Lisa D. Cook, a professor of economics at Michigan State University, is a member of the Biden-Harris transition team.

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Consortium of Indigenous chiefs seeking a way to participate in cannabis economy – Maple Ridge News

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Indigenous communities have been left out of the Canadian cannabis economy, and a group of Indigenous chiefs are out to change that for the good of their communities.

Chief Robert Gladstone of Shxwha:y First Nation says a consortium they’re calling “All Nations Chiefs” has worked for months to negotiate an agreement for on-reserve cannabis distribution directly with the province – but to no avail.

“It’s been two years since the rollout where they did not consult adequately with First Nations,” said Gladstone. “We are trying to find a way to participate in this new economy.”

To get there, they’ve organized an online forum with All Nations Chiefs from the communities of Shxwha:y, Cheam, Soowahlie and Sq’ewlets for the morning of Dec. 2. Organizers have invited Premier John Horgan, stakeholders, and the public to join them in the virtual dialogue on the cannabis question.

Gladstone described the recalcitrance from provincial counterparts as “another pathway out of poverty blocked” for First Nations communities across Canada, noting that only four per cent of Canadian cannabis licences are Indigenous-affiliated.

“That four per cent should be disturbing to everyone,” he said.

The group has also launched a petition that had almost 1,500 signatures by Nov. 27.

“We are asking Honourable Premier Horgan to take real action towards reconciliation and honour his government’s platform commitment to the UN Declaration of Indigenous Rights (UNDRIP) by allowing First Nations to participate in B.C.’s cannabis industry,” according to the petition preamble.

Since legalization, local First Nations leaders have been trying to control their own their destinies by finding a way to participate in the emerging economy “on a nation-to-nation basis,” the chief said.

Shxwha:y officials decided to go the route of applying for a Section 119 licence agreement under the Cannabis Control and Licensing Agreement Act, Chief Gladstone explained.

A Section 119 licence is required to legally distribute cannabis from retail stores on reserve land, and involve the province entering into agreements with individual First Nations, which supersede the Act. Only one community has signed such an agreement to date, the Williams Lake Indian Band. The Shxwha:y application used the Williams Lake vision as their model.

Some of the on-reserve cannabis stores in the area without provincial licensing have been operating in what government officials would describe as a grey area legally, while leaders are trying to negotiate a better way, with formal applications pending.

They started on-reserve stores under the inherent laws of their nation rather than under provincial licensing, some by enacting cannabis laws through land codes.

Those models differ from the route chosen by the owners of the first fully licensed cannabis store on reserve, which is The Kure on the Skwah reserve.

“The ultimate goal is to codify and harmonize the laws and regulations among all three levels of government,” Gladstone underlined.

But months later they are stymied, with no timeline, feedback or any response from the provincial government on their application. So they’re stepping up the pressure.

“We are reaching out. If they don’t answer, it’s a direct way of saying they are not interested in working toward a government-to-government relationship. There’s just no other way to interpret this.”

The online forum next Wednesday will focus on solutions to bring inclusivity and diversity to the nascent cannabis sector with First Nations involvement.

They feel they’ve put in the work to give the province a workable model.

“Now all we ask is recognition for our inherent right to trade and barter,” Gladstone said.

Chief Gladstone tells a story of how cannabis has changed everything in his village and beyond.

In total more than 100 people are working in the on-reserve stores around the Chilliwack area.

“These workers are not on CERB or social assistance,” Gladstone said.

As of a couple of years ago there were only four people working in Shxwha:y village. Now there are 13 jobs being held down currently at the store, and another 30 at the cultivation facility, where All Nations Cannabis Corp. is a Health Canada licensed cultivator and licensed producer applicant.

“It’s changed the standard of living for many in our village, going from abject poverty to a tier closer to the middle class,” Gladstone said. “So this is a success story.

“What we’re saying to the province is: ‘Don’t destroy this miracle of economic revival.’

“We’re just asking for co-operation.”

READ MORE: Cannabis stores rolling through the pandemic

READ MORE: Chilliwack has unique approach to cannabis retail

Do you have something to add to this story, or something else we should report on? Email:
jfeinberg@theprogress.com


@CHWKjourno
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Consortium of Indigenous chiefs seeking a way to participate in cannabis economy – North Delta Reporter

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Indigenous communities have been left out of the Canadian cannabis economy, and a group of Indigenous chiefs are out to change that for the good of their communities.

Chief Robert Gladstone of Shxwha:y First Nation says a consortium they’re calling “All Nations Chiefs” has worked for months to negotiate an agreement for on-reserve cannabis distribution directly with the province – but to no avail.

“It’s been two years since the rollout where they did not consult adequately with First Nations,” said Gladstone. “We are trying to find a way to participate in this new economy.”

To get there, they’ve organized an online forum with All Nations Chiefs from the communities of Shxwha:y, Cheam, Soowahlie and Sq’ewlets for the morning of Dec. 2. Organizers have invited Premier John Horgan, stakeholders, and the public to join them in the virtual dialogue on the cannabis question.

Gladstone described the recalcitrance from provincial counterparts as “another pathway out of poverty blocked” for First Nations communities across Canada, noting that only four per cent of Canadian cannabis licences are Indigenous-affiliated.

“That four per cent should be disturbing to everyone,” he said.

The group has also launched a petition that had almost 1,500 signatures by Nov. 27.

“We are asking Honourable Premier Horgan to take real action towards reconciliation and honour his government’s platform commitment to the UN Declaration of Indigenous Rights (UNDRIP) by allowing First Nations to participate in B.C.’s cannabis industry,” according to the petition preamble.

Since legalization, local First Nations leaders have been trying to control their own their destinies by finding a way to participate in the emerging economy “on a nation-to-nation basis,” the chief said.

Shxwha:y officials decided to go the route of applying for a Section 119 licence agreement under the Cannabis Control and Licensing Agreement Act, Chief Gladstone explained.

A Section 119 licence is required to legally distribute cannabis from retail stores on reserve land, and involve the province entering into agreements with individual First Nations, which supersede the Act. Only one community has signed such an agreement to date, the Williams Lake Indian Band. The Shxwha:y application used the Williams Lake vision as their model.

Some of the on-reserve cannabis stores in the area without provincial licensing have been operating in what government officials would describe as a grey area legally, while leaders are trying to negotiate a better way, with formal applications pending.

They started on-reserve stores under the inherent laws of their nation rather than under provincial licensing, some by enacting cannabis laws through land codes.

Those models differ from the route chosen by the owners of the first fully licensed cannabis store on reserve, which is The Kure on the Skwah reserve.

“The ultimate goal is to codify and harmonize the laws and regulations among all three levels of government,” Gladstone underlined.

But months later they are stymied, with no timeline, feedback or any response from the provincial government on their application. So they’re stepping up the pressure.

“We are reaching out. If they don’t answer, it’s a direct way of saying they are not interested in working toward a government-to-government relationship. There’s just no other way to interpret this.”

The online forum next Wednesday will focus on solutions to bring inclusivity and diversity to the nascent cannabis sector with First Nations involvement.

They feel they’ve put in the work to give the province a workable model.

“Now all we ask is recognition for our inherent right to trade and barter,” Gladstone said.

Chief Gladstone tells a story of how cannabis has changed everything in his village and beyond.

In total more than 100 people are working in the on-reserve stores around the Chilliwack area.

“These workers are not on CERB or social assistance,” Gladstone said.

As of a couple of years ago there were only four people working in Shxwha:y village. Now there are 13 jobs being held down currently at the store, and another 30 at the cultivation facility, where All Nations Cannabis Corp. is a Health Canada licensed cultivator and licensed producer applicant.

“It’s changed the standard of living for many in our village, going from abject poverty to a tier closer to the middle class,” Gladstone said. “So this is a success story.

“What we’re saying to the province is: ‘Don’t destroy this miracle of economic revival.’

“We’re just asking for co-operation.”

READ MORE: Cannabis stores rolling through the pandemic

READ MORE: Chilliwack has unique approach to cannabis retail

Do you have something to add to this story, or something else we should report on? Email:
jfeinberg@theprogress.com


@CHWKjourno
Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

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Monday's fall economic statement will try to bridge current and future needs – iPolitics.ca

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The Liberal government is ready to table a fall economic statement that attempts to balance the current needs of the COVID-19 response with plans for Canada’s post-pandemic economy and social-safety net. 

On Monday, Finance Minister Chrystia Freeland will present her first fiscal and economic update since replacing Bill Morneau after the latter’s resignation in August. 

The statement will provide detailed fiscal projections for the years ahead, something the Liberals haven’t done since the pandemic began in the spring.

The Liberals will also present new measures to fight COVID-19, and lay the groundwork for longer-term and higher-cost priorities, such as national affordable child care, pharmacare, and fighting climate change — measures that interest labour, but concern business groups.

“I expect the government to be clear … that they remain committed to the priorities identified in the throne speech, and ensure that those things are going to be delivered on,” Hassan Yussuff, president of the Canadian Labour Congress, told iPolitics.

The throne speech included a long list of promises to green the economy and strengthen the country’s social safety net — efforts Yussuff says are vital, if Canada is to emerge from the pandemic stronger than before. 

The fiscal update coincides with a second wave of COVID cases, which have prompted new public-health restrictions that have shuttered businesses and rattled the confidence of consumers entering the holiday season. 

Levels of consumer confidence for November are now at their lowest since May, according to the Conference Board of Canada’s index.

Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, said COVID will still be around for the foreseeable future, so Canada must have a plan to manage, rather than merely react to, the pandemic. 

“Unfortunately, up until now, the focus of governments has been: ‘Shut down and write a cheque,’ ” he told iPolitics.

Beatty said governments need to craft a more coherent strategy that better uses data and science to bring down infection rates, and allows Canadians to safely resume their lives soon as possible, while also ensuring resources get to the most vulnerable communities and economic sectors.

He said it’s wrong to think of a vaccine as a “silver bullet,” because it might not entirely eliminate the threat of COVID, and its distribution will take considerable time. The fiscal update should focus on current concerns, he said. 

READ MORE: Ford asks Trudeau for details of vaccine types, quantities, and timing

Speaking to reporters on Friday, Prime Minister Justin Trudeau said there are “very good chances” most Canadians will be vaccinated by September 2021.

He added that the fiscal update will include more support for Canadians during the pandemic, as well as plans to rebuild a “strong, resilient economy for everyone.”

Kevin Page said he expects the Liberals to punt some of their longer-term priorities to the next budget, while still presenting a comprehensive document.

“I think it will be more than a typical update; something probably looking like a mini-budget,” said Page, a former parliamentary budget officer and head of the University of Ottawa’s Institute of Fiscal Studies and Democracy.

The update should focus first on getting Canadians through the current crisis, said Elliot Hughes, a former policy adviser of Morneau’s.

“There’s going to be lots of time to sketch out those bigger things down the road,” he said. “What people want to know now is that the government’s got their backs.”

Hughes, now a senior advisor at Summa Strategies, cautioned that the government needs to keep its messaging “clean and straightforward,” but should be ready to answer questions about what to expect in the near future, as well in the recovery phase.

“It’s a tricky balance, but it’s one that you need to strike,” he said. 

READ MORE: Female, racialized and young Canadians less likely to benefit from jobs increase

The statement will also update the deficit, which is expected to be Canada’s largest since the Second World War. It’s also expected to be without a fiscal anchor to manage debt levels, though Freeland has previously said there’s no “blank cheque” for spending.

A report released by RBC on Friday forecasts the annual deficit to approach $370 billion, higher than the $343 billion projected in July. The report says spending announcements will add at least $90 billion to the 2021-22 deficit, and extensions to the wage subsidy and recovery benefit could add even more. 

Yussuff, who hopes the fall update will include money for infrastructure, child care and employment insurance, said now is not the time for fiscal restraint: Spending will both prevent an economic disaster and support women and people of colour, who’ve been disproportionately affected by the pandemic, he said.

“They’re going to need to be supported if we’re going to get to a full recovery.”

Beatty, who has supported Ottawa’s emergency spending thus far, said there should be a short-term child-care program to get mothers back into the workforce. But such spending must be targeted, and this is not the time for costly programs such as universal pharmacare, he said.

“Don’t get into programs that we can’t afford: permanent recurring programs that are simply going to build in a structural deficit.”

At what exact point Canada’s debt becomes a serious concern is being fiercely debated, Page said, but bond agencies might lower their credit ratings if Ottawa doesn’t re-introduce a fiscal anchor in the near future and the debt significantly increases.

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