Report: Racial inequities cost Columbus area $10B annually

Long-standing racial gaps among Columbus-area workers are costing the regional economy $10 billion a year, according to a report that lays out historical inequities in the labor market that are threatening the region’s future prosperity.

The region’s workforce remains deeply segregated, according to the report, which finds that workforce development is too fragmented to address the drivers of racial inequities and ensure people of color can share equitably in the region’s growth.

“Columbus is characterized by stark residential segregation, with Black residents concentrated in certain neighborhoods within the city of Columbus as a result of inequitable policies both past and present, and increasingly separated from the growth in good jobs in the surrounding suburban community,” the report said.

“With ongoing demographic changes toward a more diverse workforce and community, the economic costs of racial inequities to the Columbus region continue to mount.”

The report, called Advancing Workforce Equity in Columbus: A Blueprint for Action, was released this week by the National Equity Atlas, a partnership between PolicyLink and USC Equity Research Institute.

Additional contributors include the Cincinnati-based Workforce Innovation Center and the Emsi Burning Glass analytics firm, along with One Columbus, the region’s economic development arm.

JPMorgan Chase & Co., the region’s biggest private employer with about 18,000 workers, paid for the report.

“This research gives us important context as we work to remove obstacles and connect people to the private sector jobs being created in growing businesses across our region,” said Kenny McDonald, president and CEO of the Columbus Partnership, made up of about 80 of the region’s CEOs.

The region’s economic output was $137 billion as of 2020, according to federal data, so a $10 billion increase would be about a 7% increase.

For pay equity to be reached with white workers, wages for Black workers will need to rise 68% and incomes for Latinx workers will have to go up 59%, according to the report.

Racial gaps in employment and wages cost people of color in the region an average of about $18,000 per year. Closing those gaps would raise their average income to about $55,000 per year.

The average Black worker earns $32,553 and the average Latinx worker makes $34,395, according to the study.

“Despite the growing diversity of the Columbus workforce, workers of color tend to be crowded in lower paying, and lower opportunity, occupational groups, while white workers are overrepresented in many higher paying professions,” the report said.

Black and Latinx workers make up about a quarter of Columbus workers between 25 and 64, yet they are much less likely to earn $15 per hour that the report called the bare minimum wage for

Columbus.

The report also notes the shortfall of future-ready jobs defined as stable, with family-sustaining wages.

Only 42% of Columbus-area workers are in such jobs, and that share drops to 12% for jobs that don’t require a college degree. The report says disparity “has significant racial equity implications, considering that over 40% of Black adults and nearly 70% of Latinx immigrant adults have no college education.”

While higher education can help close the gap, it’s not enough, the report said, with white workers without a college degree earning as much as Black workers with an associate degree. White workers with a college degree earn 20% more than workers of color with a degree.

While the unemployment rate for white workers has stabilized since the early months of the pandemic, the rate for Black workers has been volatile. By August 2021, approximately 5% of white workers in the Columbus metro region were unemployed, compared with about 15% of Black workers.