Inclusiveness isn’t just a feel-good notion; it’s an economic imperative

In researching my recent report for Michigan Future about how metropolitan Minneapolis became one of the wealthiest and most livable regions of the country, one issue was repeatedly cited to me by business and community leaders: the need to become more inclusive.

That’s not something you hear much about from metro Detroit’s business leaders, who are more focused on taxes and other business climate issues. But working to improve inclusiveness could be even more important in metro Detroit, which is one of the most racially segregated places in the country. I’ll explain in a bit.

At first, the concern by metro Minneapolis business leaders for narrowing the gap in racial disparities surprised me. Most people in the Twin Cities are doing well. Median household income in metro Minneapolis in 2016 was $73,231, the seventh-highest among the 53 metro areas with a population of a million or more.

People of color work at a higher rate than in many U.S. metro areas. In 2016, 75 percent of minorities age 25 to 64 were employed—10 percentage points higher than in metro Detroit.

And metro Minneapolis, despite being more than 70 percent white, has a well-deserved reputation for being welcoming to everyone, including refugees, immigrants and LGBTQ people.

Still, there are significant economic, social and educational gaps between whites and people of color in the Twin Cities.

Nearly 47 percent of non-Hispanic whites in metro Minneapolis held bachelor’s degrees in 2016, compared to just 28.5 percent for people of color. Median income in households headed by whites was $79,600, compared to $50,000 for those headed by minorities. Twenty percent of minorities live below the federal poverty line, compared to just 5 percent of whites, according to the research group Minnesota Compass.

Business and community leaders told me they have a moral responsibility to work toward closing racial disparities. But there’s a clear economic imperative, as well.

Economic growth in the Twin Cities is expected to outpace the working-age population growth over the next 20 years or so, giving employers and policymakers pause over how they’re going to find enough workers to support that growth.

A 2017 forecast by the Metropolitan Council, a regional government agency, predicts metro Minneapolis’s working-age population will grow by 10.4 percent between 2020 and 2040. But the number of jobs in the metro area is expected to grow by 11.5 percent in the same period.

And metro Minneapolis is rapidly diversifying, meaning that employers will need to increasingly rely on people of color to fill those new jobs.

The Twin Cities metro is expected to add 211,000 new jobs between 2020 and 2040. But the number of non-Hispanic white residents age 25 to 64 is expected to decline by 137,000 in the same period.

At the same time, the working-age population of people of color is expected to grow by 325,000 between 2020 and 2040. Employers and policymakers must ensure those workers have the education and skills required to keep metro Minneapolis’s knowledge-based economy growing and vibrant.

“There are not a lot of good near-term solutions to growing our workforce,” said Peter Frosh, vice president of strategic partnerships at Greater MSP, a regional economic development group. “The best near-term solution we have is inclusion.

Policies promoting greater inclusion are even more important in metro Detroit, where there could be more jobs than people readily available to fill them.

An eye-opening 2017 population forecast for the Southeast Michigan Council of Governments predicts little growth in the region’s working-age population over the next several decades—just 1 percent between 2015 and 2045. Employment is expected to grow by 6.6 percent.

But even that minuscule working-age population growth doesn’t come until later in the forecast period. The population of 25-to-64-year-olds is expected to decline by 65,025 between 2017 and 2030, “making it increasingly difficult for employers to find workers,” according to the forecast prepared by University of Michigan economists George Fulton and Don Grimes.

If that forecast proves correct, employers and policymakers in metro Detroit will have no choice but to attract more local residents into the workforce. And the biggest opportunity to do that will be with people of color, who will comprise a larger share of the total population over the next several decades.

Metro Detroit’s white population is expected to decline by 45,170 by 2045, according to the SEMCOG forecast. But the number of blacks, who have traditionally have been marginalized here, is expected to increase by 96,923 in the same period.

The total minority population in metro Detroit is expected to grow by about 427,000 people by 2045, including Hispanics, Asians and others. But that number includes international migration, which could be severely curtailed by the Trump administration.

As noted earlier, only 65 percent of working-age minorities in metro Detroit are employed. Getting more of them connected to jobs will require a number of policy solutions, including improving education, job training and transit.

A comprehensive effort to promote greater inclusion of minorities in the workforce might be the most important economic development strategy metro Detroit business and community leaders could undertake.

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