Over the past few weeks, racial and social equity issues have rightfully occupied center stage of our national consciousness. A racially just society – free of discrimination, inclusive of the excluded, one that offers opportunities for all – is a moral imperative. Once we bring people from diverse backgrounds together by focusing on our shared humanity and co-opting ‘unity through diversity' as our signature strength, we can build a harmonious society that fully performs to its potential in all possible ways. An inclusive economy, intrinsically married to twin economic and social goals and focused on equality of opportunities, can also help accelerate social justice outcomes. I believe D'Amore-McKim has a major role to play in amplifying calls for an inclusive economy.
Here are the facts
Despite the longest U.S. economic growth cycles in recorded history over the past decade, recovery has been uneven for certain segments of the population. Of particular concern is the shrinking middle class, as the number of people in both lower- and upper-income tiers on either side of the middle class, has grown. Poverty rates for racial minorities are far higher than other segments of the population. For instance, research from Pew suggests that expected family incomes of children from families at the 90th income percentile is about three times higher than that of children raised in families at the 10th percentile, indicating a persistence of advantage for higher income families and a double jeopardy for poor families. Not only are they born poor, but they face low prospects for economic mobility. This disparity in opportunity and consequent outcomes hurts individual families as well as the economy. Economic growth falls when income inequality rises.
Disadvantaged families also face limited educational options, thereby hampering skill development and generating lower levels of income. Lower levels of income affect consumption, which thereby hurts businesses and reduces the nation's GDP. On the supply side, private-sector competitiveness that is highly dependent on skilled workers who can compete in a global economy is also severely weakened, leading to a vicious cycle of lowered economic prospects. This lack of skilled talent problem is likely to be exacerbated in the future, where automation could threaten low-skilled jobs.
In addition, increasing income and racial inequality also increases social unrest and political pressures for isolationism while discouraging global trade. It has been estimated that eliminating income inequalities would increase purchasing power of racial minorities from $4.3 trillion in 2045 to $6.1 trillion (in 1998 dollars).
How can D'Amore-McKim help?
An inclusive economy requires an innovative education agenda. We are in the business of developing well-rounded, enlightened future leaders. Social equality is a grand challenge of our times, and hence class discussions should explicitly discuss racial equality and social justice issues. Case studies should feature leaders from underrepresented minorities and women to showcase possibilities. Our faculty members are ready for the challenge. By educating students on cutting-edge issues and then unleashing their innovative spirits on the economy, we help shape the inclusive economy of the future. We should also work with business partners to pair students with mentors and role models in order to build a robust support structure and provide access to opportunities.
Beyond educating traditional students, we can pursue new pipelines, like community colleges and other four-year colleges with significant numbers of underrepresented minorities and women, in order to create easy pathways for D'Amore-McKim content. This will lead to improved diversity outcomes for business careers and leadership. We also have opportunities to double down on our efforts to provide access to lifelong learning and help learners, especially from marginalized communities, obtain new skills or re-skill/up-skill themselves, as the case may be. Empirical research has shown that racial- and gender-diverse companies are 33 percent more likely to outperform their peers on profitability. Firms are highly cognizant that the lack of racial diversity and social justice are major business risks – it makes sense for firms to help build an inclusive economy that provides access to opportunities for all. Participating firms can subsidize the costs of education and/or D'Amore-McKim can introduce innovative financing options, like income share agreements that mitigate risks and provide for positive market outcomes.
D'Amore-McKim can also make a difference in the entrepreneurial space. We have a strong entrepreneurship program, and we have a dynamic entrepreneurial ecosystem that spans multiple colleges. Northeastern has a unique opportunity to utilize inclusive entrepreneurship as a conscious strategy to power our local communities.
In addition to building the right curricular and co-curricular experiences focused on social equity within D'Amore-McKim, we also need to play a central role in modeling what a just world should look like for our students. Our work starts within the school by intensifying our efforts to recruit a talent mix within D'Amore-McKim that is diverse across multiple dimensions including race and gender. Our students come from varied backgrounds, both from within the United States and around the world. Diverse employees who understand these varied perspectives and reflect the world are more likely to cater to the unique needs of our students, including women and students from racial minorities.
Beyond diversity and inclusion efforts, we need to fully accept people for their unique traits and authentic selves, i.e. making them feel that they belong in the D'Amore-McKim community. Belonging is a psychological need. It ensures that people's voices are heard, and their perspectives are accommodated into workplace solutions. While leadership sets the tone at the top through a principled stand for diversity, every individual at D'Amore-McKim must own and activate these core principles so that change is ever lasting. Belonging ensures people have positive experiences in the workplace, inspires behaviors, and leads to an engaged culture thereby enabling us to fully reap the benefits of inclusion through enhanced creativity, increased productivity, and better performance.
Together, we can start on the journey towards racial justice and help build an inclusive economy. I call upon all faculty, staff, students, alumni, and corporate partners to join me in this quest.
Raj Echambadi
Dunton Family Dean
D'Amore-McKim School of Business