Closing the wealth gap could grow Massachusetts economy by $25 billion: Report

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Closing the wealth gap between white residents and Black and Latino counterparts could trigger the state economy to grow by $25 billion over five years, a new report reveals.

Fiscal watchdog group the Massachusetts Taxpayers Foundation waded into the race debate this week with a 29-page, first-of-its-kind report exploring racial inequities in wealth, income and employment, education, criminal justice, and health care.

“The Foundation has always been committed to fiscal stability, economic growth, and opportunity for all, and this new report represents our effort to ensure we are adding a racial-equity lens to our research on policy impacts,” foundation President Eileen P. McAnneny said in a statement.

The report points to an often-repeated Federal Reserve statistic that determined the median net worth of a white household was $247,500 in 2014 compared to just $8 for a Black household.

During the same period, the median net worth for black households in cities including Los Angeles, Miami, Tulsa and Washington, D.C., averaged $4,800, the report points out.

“It’s astonishingly low, yet still substantially higher than in the Boston (statistical area),” McAnneny said speaking to reporters virtually on Wednesday.

The report points to the fiscal impacts of disparities. For example, the state would realize $20 billion over a decade in increased tax revenues and reduced public assistance costs if Black and Hispanic students graduated from college at the same rate as white peers.

The first in a series of planned publications, the report is a break from the nonpartisan organization’s typical fiscally centered reports and comes amid a racial reckoning across the U.S. in the wake of the murder of George Floyd, a Black man, at the hands of Minneapolis Police last Memorial Day.

In an email to reporters, McAnneny said in the publication “comports with MTF’s more recent commitment to view proposed policies through a racial equities lens in order to ensure that their impacts, intended or unintended, do not further exacerbate the real economic and opportunity gaps faced by Blacks and other people of color.

McAnneny said the foundation plans to convene an advisory committee to expand future editions of its report, “Closing the Racial Divide in the U.S. and Massachusetts: A Baseline Analysis.”

Data on the Asian residents were not included but will be part of a follow-up report.

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