At Session Daily, Rob Hubbard reports in Could bonding help rectify racial disparities?:
What would closing the gap look like? Several House committees will be addressing that question in coming weeks as they wrestle with “the Minnesota Paradox.”
The term is used to describe the statistics indicating Minnesota boasts a high quality of life, but not for people of color. The state has some of the country’s largest disparities between white residents and minorities when measuring outcomes in economics, education, employment, health and housing.
On Tuesday, the House Capital Investment Committee discussed how the state’s infrastructure investments and bonding projects may be viewed through a racial equity lens. Built around a presentation by Bruce Corrie, an economics professor at St. Paul’s Concordia University, the hearing was informational, but gave a sense of how race may enter into future bonding discussions.
Corrie emphasized that differences between white and minority Minnesotans in wages and wealth-building opportunities — such as advancing an education and buying a home — are costing the state significant economic benefits.
He identified racial disparities in four key areas:
- on average, a Black Minnesotan earns 71 cents for every dollar earned by a white resident, while Native Americans earn 68 cents, Latino Americans 70 cents and Asian-Americans 94 cents;
- there is a 53% homeownership gap between Black and white Minnesotans, while it’s over 30% for Latino and Native Americans, and 25% for Asian-Americans;
- a college graduation gap of 21% exists between white and Black students, with a 19% gap for Native Americans, 12% for Latinos and 4% for Asian-Americans; and
- average sales for businesses owned by Minnesotans of color was $183,000 in 2012, compared to an average of $1.4 million for all firms in the state.
Corrie asserted that if racial gaps were closed in Minnesota people of color would experience a growth in income, assets and lifetime earnings of $287 billion. He also said the state is losing over $2 billion in state and local tax revenue as a result.
Another key element of Corrie’s testimony was that Department of Administration statistics show about 2% of state spending on construction, goods and services has gone to people of color. “This number has not changed in about 20 years,” he said.
To close these gaps, Corrie suggested:
- investing in the building capacity of minority-owned businesses and setting specific goals for them;
- changing rules and regulations that serve as barriers;
- developing mentoring partnerships; and
- monitoring short- and long-term outcomes.
Corrie cited modeling that says if investment geared toward people of color were increased 10%, outputs across Minnesota industries would increase by an estimated $111 billion, and that federal, state and local taxes would increase by $13 billion.
Among the state’s investment tools to leverage private funding, Corrie emphasized loan guarantees to leverage bank lending for communities of color. . . .
Hubbard continues with questions raised by a couple of Republican committee members. We have found that we can't embed the presentation by Bruce Corrie mentioned in the Session Daily article, so read it at the link earlier in this sentence.
One point in the hearing not in the Session Daily coverage? Representative Rick Hansen suggested that capital investment--infrastructure--is public works, and provided a Keynesian analysis of Corrie's presentation. That prompted a couple of his Republican colleagues to throw up against Keynes thinking.
Here's the clip of Hansen's observations. The Youtube will scroll to the point where they begin and stops at the end.
On Twitter, Geoff Dittberner quoted the point:
"Over decades we have invested in critical infrastructure based on power...the power resides in systemic racism..." -
Readers can watch the entire presentations and discussions on Youtube here. There's a robust discussion.
Image: South St. Paul artist AJ Wrobel's painting of Representative Rick Hansen at his farm in Southeastern Minnesota--the spectre of demand-side economics.
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