New research into the racial equity inequality gap shows bad news — and good news.
According to research conducted by the Michigan Minority Supplier Development Council (MMSDC), it will take 333 years to close the racial equity inequality gap if growth continues at its current rate.
“This research makes it crystal clear that the current path is one we cannot continue if we wish to achieve economic equity for people of color in our lifetimes,” said Michelle Sourie Robinson, president, and CEO of the MMSDC, in a statement provided in the research.
There were other key discoveries in the research pertaining to the racial equity inequality gap. For example:
- Minority-business enterprises (MBEs) drove 14.2 percent of new jobs from 2014-2018 but collected only 7.2 percent of revenue growth during that same period.
- During the pandemic, minority businesses were impacted more severely, with Black-owned businesses do wn 41 percent, Latinx-owned businesses down 32 percent, and Asian-owned businesses down 26 percent. In comparison, white-owned firms fell by just 17 percent.
- In 2018, people of color represented 40 percent of the U.S. population, but revenues from MBEs represented only 9.4 percent of revenues by private U.S. firms.
- From 2014 to 2018, there was only a 1.25 percent increase in the number of MBE firms with more than $1 million in revenue, reaching 17.4 percent. In that same time span, revenues only increased from 8.8 percent to 9.4 percent.
But the research also had some good news. Notably, there are ways to actually close the gap much sooner with better results. Specifically, the MMSDC said, “a key solution to shortening the timeline is a deliberate and intentional focus on minority firms access to and spending from corporations.”
What’s more, racial parity wouldn’t just be good for the MBEs — it would also be good for the health of the overall economy.
“Corporations who understand that strong communities create strong customers, strong employees, and strong neighbors, must recommit to providing access for MBEs to compete for all aspects of their business. If all corporations grow their MBE spend percentage by 1% annually, the timeline to achieve parity would improve from 333 years to 15 years,” Robinson said.