The Economic Cost of Inequity

Pam Sornson, JD

Pam Sornson, JD

February 7, 2023

Too many people remain unaware of the negative impact that inequitable actions have on the economy. Long-entrenched cultural ‘norms’ embedded in mainstream practices and services erode the foundational quality of life for those who suffer discrimination and those who remain ignorant of implicit yet very real biases. These unjust behaviors will continue unabated unless the community makes a concerted effort to reveal them, discuss them, and change them. By doing so, everyone in society will benefit, not just those who will (finally) be treated with the respect and recognition that they have always deserved.


Shining a Light on Inequity

Images of racism – especially violence against Blacks and other people of color – play out on television monitors with increasing frequency. Women continue to struggle to earn as much as men for doing the same work. The ethics, skills, and talents of people ‘of an age’ or with different abilities go unnoticed or disregarded in favor of other, often less qualified labor candidates. Two and a half centuries of flawed beliefs and systems have rooted these discriminatory behaviors in all sectors of society and in every industry. Yet, they all have adverse economic effects that impact everyone, not just the oppressed. Until the community faces and addresses them, it will continue to suffer those unnecessary financial losses.

Discrimination Against People of Color

By one economist’s reckoning, the economic cost of racism against black Americans is an estimated USD $16 trillion accrued over just the past 20 years. In addition to wage disparities, this community also suffers from discriminatory lending practices, limitations on education capacity and availability, and reduced access to well-paying employment. The impact on the rest of the community is significant, especially in light of the fact that the US gross domestic product (GDP) in 2021 was $21 trillion. Harnessing the resources lost due to the financial deficit caused by racism against Black Americans would be enough to pay off half of America’s 2022 $31.5 trillion national debt.

Discrimination Against Women and Differently Gendered

The ‘gender gap’ also costs the country a pretty penny every year. A Center for American Progress article asserts that women earn just $0.83 for every dollar paid to a man in 2022. Women of color earn less than that. These factors remain consistent even though the capacities of women to attain education and careers have significantly increased over the past 30 years.

The reasons for this type of economic disparity are many. Women continue to shoulder most of the homemaking and child-rearing duties, which are most often not compensated and cut into their capacity to earn money. When they do work for compensation, their occupations often require inflexible or longer hours than those demanded of men. Not least impactful is the fact that many trades remain gender-segregated and have much higher populations of male workers than they do women workers. Consequently, women of all colors experience higher levels of poverty than men.

Discrimination Due to Ageism

Despite their decades of experience and skill building, workers aged 45 and over continue to experience a consistent pattern of bias, at least in the seven countries recently surveyed by McKinsey. Their study revealed that of all the unemployed laborers in those OECD countries (Organization for Economic Cooperation and Development), 40 to 70% were older than 45 years. Of those, 63% had been unable to find work in over a year, versus 36% of people under 45. The loss of this workforce cohort group is significant; it is the most educated labor population in history and enjoys the best healthcare outcomes ever recorded. The productivity and expertise resources that remain untouched in this group are immense and could, if harnessed, unleash an unrivaled economic boom capable of lifting thousands (if not millions) of people out of poverty.

Discrimination Against the Dis- and Differently-Abled

In many cases, people with disabilities or who are differently abled are barred from or face challenges to gainful employment because the world still does not see them as valuable employment assets. A 2017 study by the Office of Disability Employment Policy found that only one in five people with disabilities (20.1%) were employed, compared to almost 70% (68.6%) of non-disabled people of the same age. These populations also face challenges attaining higher education, financial stability, and optimal health because of their differing intellectual, physical, or developmental capabilities. In some cases, the inability to work is because the occupational opportunity is simply not physically set up to accommodate the needs of a differently abled person. In other cases, employers, businesses, and industry sectors have not designed their facilities to accommodate a differently abled workforce. Despite the passage of the 1990 adoption of the Americans with Disabilities Act, people in this population are twice as likely to be impoverished as those workers with conventional capacities. Further, this group is also subject to significant additional costs to manage their condition, known colloquially as the “crip tax,” which compounds the difficulties of their plight.

Each of these individual groups harbors immense talents, skills, and abilities that could add millions or trillions of dollars to local, regional, and national economies. These potential assets are ignored, however, not for any valid reason, but because society has arbitrarily deemed them to be less than optimal as workers.


While certainly not alone, America holds a unique position in the world because, in many cases, its racial and other biases are so widely publicized. In fact, a recent exposition by the World Economic Forum cites the killings of George Floyd, Breonna Taylor, and Ahmad Arbery as examples of global systemic racism. A 2019 study found that a staggeringly high percentage of Americans still don’t recognize the size, scope, or importance of the yawning gap of economic inequality that exists in their country. The economic casualties caused by the COVID-19 pandemic open up the opportunity for the United States to begin shrinking this gap to harness these invaluable human resources for the benefit of their communities and the nation.







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