Black Lives Matter in Economic Development

African Americans being discriminated against, impoverished, and killed disproportionately is deeply interconnected with the issue of economic development. It is the reason the August 28, 1963 event that included Dr. Martin Luther King Jr.’s famous I Have A Dream speech was called the “March on Washington for Jobs and Freedom.” You'll notice that the word “Jobs” comes before “Freedom.” That was no accident.

The issue of economic development is one of the central elements related to racial inequality in America. The profession of economic development must put itself within the center of creating solutions.

SizeUp and GIS Planning are both companies I founded that use economic data to derive actionable insights. I use data to understand. The data analysis about the economic marginalization of People of Color is unambiguous. 

• Racial disparity in income exists across the country. Median White households make $70,000 compared to Black households that make only $41,000. (Source: US Census ACS 2018).

• A key measurement of economic development is wealth.[1] In 2016, the typical US White family had a net worth of $171,000, which was nearly ten times greater than that of a Black family with $17,150.

• In the metro area where Minneapolis police killed George Floyd, the racial income gap is especially wide. White households make $83,000 per year. Black households only make $36,000. This $47,000 difference is the second largest Black to White income gap of any metro area in the USA. (Source: US Census ACS 2018).

• As a state, Minnesota ranked close to the bottom for both employment gap by race (47th) and income gap by race (38th). 10% of African American residents of the Twin Cities were unemployed compared with just under 4% of White American residents.
• African Americans are bearing a disproportionally negative economic impact because of the coronavirus pandemic.

• African American entrepreneurs are struggling as a result of the coronavirus pandemic and “minority-owned businesses have been far less likely to get government aid from the giant CARES Act passed by Congress. Whereas, overall, about 38% of small-business owners who applied for government aid reported getting it, only 12% of Black and Latino-owned businesses reported getting the aid they asked for.” As economies open up, African American-owned businesses may not make it through.   

• African Americans are being left out of the coronavirus economic recovery. White unemployment fell to 12.4% in May 2020 from 14.2% in April, while black unemployment rose to 16.8% from 16.7%.

• More than 1,000 unarmed people died as a result of police harm since 2013. Approximately one-third were Black. Unarmed Blacks are 1.3 times more likely to be killed by police than unarmed Whites. (Source: Mapping Police Violence/US News & World Report.) In Utah, African Americans comprise just 1.06 percent of the population, but they accounted for 10 percent of police killings over the past seven years - a disproportional rate of 9.21 times. In Minnesota, Black Americans are nearly four times as likely to be killed by law enforcement, with Black victims comprising 20 percent of those killed, despite comprising only 5 percent of the overall population. A study from the American Journal of Health concluded Black men are nearly three times more likely than White men to be killed by police intervention.

• A study by the US Sentencing Commission concluded that Black men got 19.1 percent longer prison sentences compared to White men for the exact same federal crimes, even after controlling for criminal history and other factors.

America is a country where people are mistreated, punished, and killed at higher rates when the color of their skin is dark. Brown and black skinned people have lower incomes and less opportunities than Whites in America. This is not opinion; it is empirical.

US History of Race-Based Economic Violence

Throughout history, the United States economy was built through violence perpetrated against People of Color. This included stealing land from Native Americans, the slavery of African people, the westward expansion built by Asian labor, and then - when the national borders of our country were not seen as enough - the expansion of the American economic empire with colonies in Asia Pacific and Caribbean.[2]

The economic inputs of real estate, labor, and raw materials are essential for the output of economic growth. America built its economy by cheaply acquiring these inputs through theft, slavery, discrimination, and colonization – all at violent harm to People of Color. The protests on the streets today are connected to the outcomes of a continuity in historical American economic development policy.

The data related to the unequal arrest, incarceration, and police harm to African Americans may seem less connected to traditional economic measurements such as income, wealth, and unemployment. However, the incarceration of African Americans was intentional in the development of the US economy. The 13th Amendment of the US Constitution states that “Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.” But the exception that involuntary servitude is legal if someone is convicted of a crime is the post-slavery loophole which enabled the US to incarcerate African Americans en masse to rebuild the US South post-Civil War. This started first US prison boom. It took a portion of the 4 million freed slaves putting them back to work as non-compensated prisoners to rebuild a southern economy that was previously dependent on slave labor and replacing it with imprisoned labor, making former slaves functionally slaves again. “The White political elite and the business establishment needed black bodies working,” said Bryan Stevenson, attorney, author, and Founder of Equal Justice Initiative.[3] Historical traditions in economic value created by imprisoning Black men set precedent for continued legal tradition. Today’s prison industrial complex profits business suppliers to the industry and impoverishes the Black community by removing 28.5% of Black men (and their economic output) from the communities they live by placing them in prison.[4]

African Americans have tried to build wealth throughout US history. But their efforts have been restricted in many ways “beginning with 246 years of chattel slavery and followed by Congressional mismanagement of the Freedman’s Savings Bank (which left 61,144 depositors with losses of nearly $3 million in 1874), the violent massacre decimating Tulsa’s Greenwood District in 1921 (a population of 10,000 that thrived as the epicenter of African American business and culture, commonly referred to as “Black Wall Street”), and discriminatory policies throughout the 20th century including the Jim Crow Era’s “Black Codes” strictly limiting opportunity in many southern states, the GI bill, the New Deal’s Fair Labor Standards Act’s exemption of domestic agricultural and service occupations, and redlining. Wealth was taken from these communities before it had the opportunity to grow.”[5]

Racial Economic Inequality Today

The protests, riots, and looting related to racial inequality that has occurred on the streets of the United States in the past days (and in the past, in general,) are entwined with the history of the US economy and policies of economic development. In a talk about economics in America, award-winning author Kimberly Jones explains that:

• Economics is the reason that Black people were brought to the United States.
• The possibility of African Americans winning economically has been structurally fixed so they cannot win, and she gave evidence with examples spanning centuries.
• People are criticizing the tearing up and burning down that is occurring in riots saying that African Americans are destroying their own communities, but she explains that poor African Americans don’t own anything including what is getting burned or looted.
• People need to ask why the financial gap between poor blacks is so big that people see riots as their only opportunity to get things and are willing to walk through broken glass windows to take what they can.
• There is a fracture of the social compact. In general, what this means is that we all agree to follow the law with an understanding it will be used equally and fairly. The unequal treatment under the law and by law enforcement agencies is resulting in people abandoning social agreements.[6]

Economic developers should also recognize and repair the economic damage that our profession has caused that helped facilitate the current state of disenfranchisement of African Americans. Economic development programs of the past including Urban Renewal were explicit policies of displacement of the poor and racial minorities. As James Baldwin explained, Urban Renewal means Negro removal.

The Role of Economic Developers

To the extent that economic developers recognize racial inequality is a problem and feel safe to do so (and perhaps even when it feels unsafe), we need to engage as professionals and as a profession in a bond of commitment to social justice.

Economic developers focusing on the social and economic empowerment of African Americans is both practical and strategic to achieve professional objectives. Being pragmatic, removing economic inequality is in the self-interest of our organizations.

• Economic development organizations use an “increase in average income” for the community as a measurement of success. The mathematically most impactful way to move an average upward is by increasing the lowest numbers, which, in this case, are the lowest income people.
• Removing artificial barriers which limit economic capability, such as racial discrimination, can liberate unrealized economic development potential from African Americans.
• Continued and repeated social unrest is disruptive to a local economy.
• Police killings of African Americans and racism are bad for a community’s image and can harm the community’s brand for a long time. Just consider how you feel when you hear the city names of Ferguson and Charlottesville. Negative publicity of this type can eclipse all of the positive marketing your organization has implemented. For example, a city in the San Francisco metro in which I previously practiced local economic development is largely unknown nationally, but within the reporting of the George Floyd murder, it made the national news on CNN as another example of a city’s police force that has killed unarmed people. This individual national news piece is likely going to reach and negatively influence more people about the city than any positive economic development marketing the city has done throughout years of effort.

In addition to the practical reasons for economic developers to work to remove racial discrimination, there is an ethical imperative. As Dr. King shared, “Whenever racial discrimination exists it is a tragic expression of man’s spiritual degeneracy and moral bankruptcy. Therefore, it must be removed not merely because it is diplomatically expedient, but because it is morally compelling.”

Here are just a few things economic developers can do to be part of the solution:

• Speak up as leaders in our communities to bring attention to the economic racial inequality that exists. We can educate and use data to show the problems, so the discussion is framed around facts that lead to actionable policy.
• Create programs to help racial minorities that are economically disadvantaged. It is not enough to raise the “average” income of your community; a rising tide may lift all boats, but not everyone is able to own a boat. Many people in our communities are drowning economically.

• Bring more racial minorities into our organizations. The 2019 International Economic Development Council “State of the Industry” survey reveals that staff diversity is not a priority for the majority of economic developers who participated in the survey. It even declined as a priority from 2018 to 2019. However, it needs to be a priority because racial minority team members may have insights and experiences that can supplement the blind spots that white economic developers have around the issues of race and economic development. As Rod Miller, CEO of Invest Puerto Rico, explains about the lack of diversity in the economic development profession, “Nobody understands Black communities like Black People. So, if we are expecting a profession that is overwhelmingly White to lead in restoring Black communities it will never happen. That’s not because people are bad but because they don’t understand these communities.”

How economic development is implemented is both a root problem and solution to racial inequality. Because this is the case, it is in a position of opportunity for the profession to be in because, as economic developers, we can make a societal change.

Economic developers must ask ourselves if we will rise to be capable of effecting substantive change or will we be complicit in the disempowering of our nation’s African American population.[7] 

Understanding and Action 

We do not need to live in a society in which brown skinned people are disproportionally harmed and are impoverished. We can build a better world than the one we live, in which racism and discrimination are eliminated from economic opportunity. To accomplish this requires action. All of our action.

Black lives matter. Some people get offended by hearing this, but this reaction makes no sense to me. As Nick Cannon explains, what he learned after having a conversation with his White friend about the term Black Lives Matter is, “...I had to put it in Caucasian. When ya’ll say ‘save the whales’ that don’t mean fμ¢ḱ all the other fish in the ocean! It just means the whales need saving. They are in danger. Just like [Black people].” Michael Che makes this point similarly.

If you have never been pulled over by the police and thought there was a chance it could lead to your death or have never worried that a family member might be killed today because of the color of their skin, you are lucky and privileged in a way that many African Americans people are not. 

Each day since George Floyd was killed and the protests began, I have thought about my good friend and his son. For as long as I have known him, he has shared multiple (!) stories each year of being pulled over in his car by police. He is a tall, athletic, ebony skinned man who owns expensive cars.

I told my friend this week how glad I am that he is alive and how disgusted I am that I need to be extra thankful for such a basic thing. His son plays baseball with my son. His son is entering adolescence and I asked him about “the talk”. (If you don't know what "the talk" is, it’s a conversation that occurs in the Black community about how to stay alive as a young black male and that being innocent is no protection from being killed by the police.)

He told me “we don’t have the luxury of waiting” on giving The Talk and that the discussion began for them on the edge of a sidewalk when they were seated “like two criminals” pulled over on their way to a Boy Scouts event. He had a taillight out on his truck due to an ongoing electrical issue. His son was 10 years old, wearing a Boy Scout uniform with an American flag on his shoulder, forced by police to sit on the sidewalk corner on the main street of our city, when his son “completely understood racial profiling.”

We will all have blind spots because of our personal situations. My skin is brown, not black. I will never know the experiences of being a Black person. But we cannot solely rely on our personal experiences as a representation of what is happening in society. All of our personal experiences are too limited. We need to listen and learn from the people who have experienced racially motivated economic injustice. We also need to know history, patterns, economics, and data. All of these measurements clearly show that racial economic inequality is oppressing our country and our communities.

Hating and hurting people because of the color of their skin is dehumanizing. It hurts the abused and the abuser. We need healing which comes from actively creating positive change.

About the author: Anatalio Ubalde is CEO of SizeUp and Managing Director of GIS Planning, a service of the Financial Times.

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Footnotes:

[1] Wealth is the sum of all financial resources. It is influenced by income, but they are not perfectly correlated. Two households with the same income, but the household with fewer expenses or with more accumulated wealth from past income or inheritances, will have more wealth.

[2] American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands are current American territories. The Philippines, Micronesia, the Marshall Islands, and Palau, were colonies that became legally independent.

[3] 13th. Directed by Ava DuVernay. Distributed by Netflix. Release date: October 7, 2016. Watch the trailer for the documentary 13th. 

[4] US Department of Justice. Bureau of Justice Special Report. “Lifetime Likelihood of Going to State or Federal Prison.” Thomas P. Bonczar and Allen J. Beck, Ph.D., BJS Statisticians. March 1997.

[5] “Examining the Black-white wealth gap,” by Kriston McIntosh, Emily Moss, Ryan Nunn, and Jay Shambaugh. Brookings. Thursday, February 27, 2020

[6] The Daily Show with Trevor Noah. May 29, 2020. Author’s note: please watch this video. It’s not focused enough on economic development for me to include it in the main body of this article but it really helps explains so much related to all of the concepts discussed that I’m actually putting it in the footnotes.

[7] The New York Times writer Keeanga-Yamahtta Taylor’s opinion article “Of Course There Are Protests. The State Is Failing Black People” said “But what is also unmistakable in the bitter protests in Minneapolis and around the country is the sense that the state is either complicit or incapable of effecting substantive change.” I am hopeful that the profession of economic development is capable and intentional about creating substantive change.