• Historic protests across the country are prompting many Americans to take a deeper look at policies and practices that contribute to systemic racism in the US.
  • Addressing police brutality is an immediate goal. But a host of other areas that lead to “inequality of opportunity” are ripe for discussion as well.
  • In a 2018 paper, authors Bradley Hardy, Trevon Logan, and John Parman explored the barriers to economic mobility among Black populations, with issues to address including education and criminal justice reform.
  • Other options are funds dedicated to supporting Black entrepreneurs and training programs to place lower-income workers into higher-paying jobs.
  • Visit Business Insider’s homepage for more stories.

Americans everywhere are confronting the harsh reality that systemic racism is not only alive in the US, but that it has been perpetuated for decades without more aggressive action.

Now, momentum is surging in a historic way to root out ingrained injustice against Black people.

One way policymakers and advocates may choose to tackle that immense challenge is by seeking to address the drivers of economic disparity among Black populations throughout the country. White households on average earn 6.5 times more than Black counterparts. But the story quickly becomes more than just the dollars and cents in a bank account.

From government policies that predominantly negatively impact Black communities to segmentation in public school systems between wealthy and poorer families, the disparity underscores what senior economists at the Federal Reserve Bank of Cleveland have labeled “inequality of opportunity.”

But there are several ways that lawmakers, business leaders, and others can begin to narrow that gap.

In a 2018 paper for the Brookings Institution's Hamilton Project, American University's Bradley Hardy, Ohio State University's Trevon Logan, and the College of William & Mary's John Parman explored the topic of economic mobility among Black citizens.

Their research found that the "exclusion from full protection through the nation's social safety net, education, and criminal justice programs coincided with broad exclusion from neighborhoods and labor market opportunities."

Business Insider talked to Hardy and Logan to learn what solutions could make the most immediate difference now in spurring more economic opportunities for Black Americans.

Criminal justice reform

The systemic racism within the US criminal justice system has been well documented.

Nationwide, Black people are twice as likely to be pulled over by police officers and four times as likely to be searched.

In New York City, police are much more likely to arrest Black residents for marijuana possession than white citizens. And in Massachusetts, incarceration rates are nearly eight times higher among Black people.

Fixing the system has historically been a struggle on the federal level. A sweeping overhaul years in the making that President Donald Trump signed into law in 2018, however, led to the release of thousands of inmates.

Still, tackling the near-term problem of police brutality will be difficult. Divisions are already beginning to emerge in Congress and, simultaneous to those efforts, lawmakers are rushing to find policy solutions to prop up a struggling economy.

But the problem goes beyond just incarceration, according to Logan.

"A white man with a criminal history has a higher call-back rate for an interview. When we are thinking about just criminal justice reform we have to put that into perspective," he said.

There has been some momentum within corporate America to address this, providing a framework with which to build upon.

Last year, a host of companies - including IBM, Walmart, and the US Chamber of Commerce, which touts American Airlines, Ford Motor Co., and others as members - pledged to increase hiring of previously incarcerated individuals.

Education reform

Another main driver of economic disparity highlighted by Hardy, Logan, and Parman is a bifurcated US education system.

Research indicates that schools that invest more money into operations produce higher test scores among students - ultimately affecting the quality of the institution as well as earning ability later in life.

But with the bulk of money for many schools coming from the states, there's a wide discrepancy in funding.

While it varies, on average schools located in poorer areas that have a greater proportion of minority students, or non-Caucasian, "receive roughly $1,000 less per student than school districts with relatively low poverty," according to the 2018 paper.

On top of funding, the authors also highlight the benefit in minority students having same-race teachers - an outcome Logan attributed to the cultural competency of those instructors versus one from another race.

"Exposure to same-race teachers is associated with reduced disciplinary sanctions, a lower likelihood of dropping out of high school, and a higher likelihood of matriculating to college," they wrote.

Part of the challenge is widening the talent pool for educators to include more people of color. And that means a broader discussion around salary.

"It's more a call for thinking about how we compensate and recruit the teacher workforce," said Hardy.

Removing barriers to political participation

Advocates have long chastised practices like voter intimidation and ID requirements as disproportionately impacting Black individuals.

A 2013 law in North Carolina, for example, was struck down in 2016 after a court found it was discriminatory against Black residents.

And in Georgia, former gubernatorial candidate and state Rep. Stacey Abrams publicly claimed that voter suppression led to the victory of current Gov. Brian Kemp, who as secretary of state oversaw the same election in which he was a candidate. A House Oversight report published in February 2020 included evidence of Kemp laughing at reports of suppression at the time.

Business Insider has previously reported on how women, Black Americans, Native Americans, and Asian Americans were systematically denied the right to vote for centuries and on a top Trump advisor's leaked remarks that Republicans have "traditionally" relied on the strategy.

But there's also a lack of Black representation at many levels of government. Only 10 Black lawmakers have been elected to the US Senate, for example, while just 153 have served in the US House of Representatives.

Without those voices, policies can be passed that contribute - either knowingly or unwittingly - to systemic racism in the US, according to Logan.

When Michigan was considering work requirements to enroll in the Medicaid program, lawmakers included a provision to exempt individuals from the policy if they lived in counties with unemployment rates topping 8.5%.

The policy could have aided white Medicaid recipients while harming Black enrollees, according to Hardy, Logan, and Parman, because many poor Black Americans live in urban areas where unemployment rates tend to be lower.

"This incident reveals the complex interplay between policy, inequality across space, and inequality between races," they wrote. "Even if a policy like the unemployment rate exemption in the Michigan bill is crafted without discriminatory intent, it can nonetheless increase racial inequality."

Investment funds for Black entrepreneurs

Starting a company is a major risk.

That becomes an even greater challenge for those that don't already have financial safety nets to fall back on.

Systemic racism can't be overlooked when considering that the poverty rate among Black Americans is 27.4%, the highest among racial groups. For whites, the rate is 9.9%.

Funds dedicated specifically to supporting Black entrepreneurs could help alleviate some of that burden and spur more small business ownership among that population, according to Logan.

"When you make a strategic decision to not invest adequately in all groups in your society, you are forgoing productivity and you are forgoing economic growth," he said.

Some already exist. Backstage Capital, for example, focuses on providing funding to people of color, women, and LGBTQ founders. To date, it's distributed $7 million.

And others are quickly emerging. On Wednesday, beleaguered SoftBank launched a $100 million fund specifically targeted towards founders of color.

New upskilling programs targeted at Black communities

Corporations are funneling billions of dollars into programs to upskill their workers - or potential workers - on the latest technology.

Toyota, for example, runs an apprenticeship program where enrollees work three days a week alongside a two-year educational curriculum that covers tech-related topics like programmable logic-control systems, as well as lean manufacturing techniques and soft-skill development.

Targeting those programs toward Black populations could begin to elevate those in lower-income areas to higher-paying jobs, according to Hardy.

"Many low-wage workers have fewer formal credentials. They don't have the networks and connections ... and many of these workers probably faced some forms of discrimination when they go out and they try to apply for higher quality jobs," he told Business Insider.

By getting employers and the local educational systems to partner, the "potential workers who enroll are then engaged in a process where you have employers committed to providing jobs at the end of this," Hardy added.

Some of these initiatives will be more difficult than others to get across the finish line. And the suggestions don't encompass the litany of problems that contribute to systemic racism in the US.

But as the discussion moves quickly from rhetoric to action, the list provides an initial jumping-off point for discussions among policymakers, regulators, advocates, and other stakeholders.