Experts Talk the Economics of Diversity at Kennedy School Conference

Economists and race relations experts convened to discuss the economic repercussions of structural racism in America and the need for continued workplace diversity Friday at the Kennedy School’s Ash Center.

Part of the virtual two-day “Truth and Transformation Conference,” the panel was moderated by MarketWatch reporter Levi Sumagaysay and featured a number of panelists, including economists Dana M. Peterson and Lisa D. Cook, President and CEO of PolicyLink Michael McAfee, Director of Harvard’s Institutional Antiracism and Accountability Project Khalil G. Muhammad, and Equity at Work Council executive director Jarik Conrad.

Muhammad, an HKS professor who organized the conference, reflected on the structural inequities faced by minorities today and the work needed to dismantle those structures.

“The racism is baked into the algorithm, the credit report, the police department, the neighborhood school, the patient profile, the curriculum, all you have to do is follow the rules,” Muhammad said.

“Our theory of change began ultimately with historical reckoning, that coming to terms with where you are as an individual and your organization sits in relation to the history of racialized power, is the first step towards transformation,” he added.

Peterson, the chief economist of the nonprofit The Conference Board, talked specifically about the issue of credit access denial for Black entrepreneurs and explained how solving this problem could help solve America’s unemployment crisis.

“When you also think about the six million jobs that aren’t created because these Black entrepreneurs were denied access to financing along every point in the spectrum, that six million a year, that’s incredible,” Peterson said.

“If we gave Black entrepreneurs the ability to finance their businesses, because all businesses need lines of credit and financing, we could solve the unemployment problem right away,” she added.

Addressing the topic of diversity, equality, and inclusion in the workplace, McAfee explained that he and other proponents have faced pushback in convincing corporations to adopt such policies.

“People have the audacity to ask us about results — the results are held hostage right now because we can’t get to the liberatory work that would lift that 100 million plus who are economically insecure in America, into the middle class and beyond,” McAfee said.

Cook, a professor of economics at Michigan State University, used the results of her research to explain how diversity policies are both economically feasible and an essential measure to boost the economy.

“What I have found, and what my co-author and I have calculated, is that GDP per capita would be 0.6 percent to 4.4 percent higher if more African Americans and more women were engaged in the innovation process from beginning to end,” Cook said. “So I think the reality is actually the opposite — we can’t afford to not do it.”

McAfee pointed to the need for major, long-term structural change rather than temporary fixes in order to redress past and ongoing inequalities.

“People of color are not asking for charity, we’re asking for a redesign of the nation. And so with all due respect, the money is nice, but it’s one-offs,” McAfee said.