Entrepreneurs

3 Industries Affected By Racial Disparity And How It’s Being Addressed

More than two years have passed since the protests and unrest inspired by the murder of George Floyd. The movement focused attention on persistent racial disparities that affect healthcare outcomes, wealth-building, and educational opportunities for Americans of color.

Black women are more likely to die in childbirth than white women. Black students face disproportionate suspension rates than white students. Most nonwhite groups have lower household wealth than whites. The list goes on.

While it’s a stretch to say that there has been a ‘racial reckoning’ since 2020, many business leaders and policymakers are taking racial disparity more seriously than before. And they’re working harder than ever to address it. Here’s what’s happening in three key industries.

1. Healthcare

Nowhere is racial disparity more obvious—or more consequential—than in healthcare. The consequences of medical neglect in communities of color include higher rates of maternal and infant mortality, lower heart attack survival rates, and poorer outcomes for cancer patients of color.

This has real consequences. A recent study found that Black and Latinx cancer patients were six times more likely than white patients to wait more than four weeks for immunotherapy treatment. That’s an unacceptably long delay that can significantly affect disease progression and increase mortality risk.

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To their credit, healthcare systems and patient advocacy organizations recognize the need for equitable access to lifesaving care. Navigating Cancer, for example, looks for related social determinants of health and provides additional support for patients with barriers to care.

“We’re trying to address this by screening patients for the other aspects of their life that might impact their ability to receive immunotherapy, such as financial toxicity, mental health screenings, and transportation issues,” says Dr. Amila Patel, PharmD, BCOP, chief clinical and strategy officer at Navigating Cancer.

Artificial intelligence solutions could help mitigate racial disparities in healthcare as well. Conscious or unconscious provider bias affects outcomes across the industry; to the extent that AI removes the human element from the decision-making process, healthcare delivery is likely to be fairer. AI-driven X-ray analysis appears better at diagnosing patients of color than ‘human-first’ analysis, for example.

2. Housing

Housing is another industry with rampant racial disparities. These disparities aren’t always obvious and can be difficult to prove, but they show up in nationwide data.

A massive study by the National Bureau of Economic Research finds that discrimination in both rental and owner-occupant housing is widespread, with Black and Latinx people bearing the brunt. For example, property managers returned inquiries from white prospective renters 60% of the time, compared with 54.4% for Black renters and 57.2% for Latinx renters.

Unlike in healthcare, efforts to address housing disparities are primarily driven by professional associations, nonprofits, and government agencies. The National Fair Housing Association (NHFA), for example, has programs to address redlining (geographic discrimination), racial bias in the appraisal process, and individual companies believed to be engaging in discrimination. They work closely with the Department of Housing and Urban Development, whose fair housing enforcement arm ultimately holds people and companies accountable for discriminatory real estate practices.

3. Consumer Finance

Racial disparities have persisted in consumer and small business finance for generations. These disparities often overlap with those found in other industries, such as housing.

For example, while traditional redlining (outright exclusion of nonwhites from certain neighborhoods) is now illegal, credit-based redlining (discriminatory lending practices that disproportionately affect homebuyers of color) remains common.

A key cause of racial disparities in consumer finance is the racial bias inherent in traditional underwriting models. Though progress has been slow, some lenders now offer tools for loan applicants to increase their chances of qualifying for mortgages and other types of loans.

Access to traditional banking services also remains a problem. Banks are less likely to open branches in communities with high nonwhite populations, forcing residents to turn to predatory financial services providers like check-cashing shops and payday lenders. App-based ‘neobanks’ are turning the tide and reducing the ranks of the underbanked, but progress remains slower than needed.

There’s More Work to Be Done

The United States is increasingly multicultural, but it’s not yet a post-racial society. Not even close.

Much more work needs to be done to address ongoing racial disparities in essential industries like healthcare, consumer finance, and housing. This also goes for education, transportation, retail, logistics, and child care.

The coronavirus pandemic offered a stark reminder that these industries’ disproportionately nonwhite workforces remain vulnerable. An analysis by the Economic Policy Institute found that Black workers were much more likely to work in “frontline” roles within these sectors, and thus at higher risk of Covid-19 infection.

The pandemic might be receding, but the racial disparities it exposed are not. For the good of their employees, their customers, and their stakeholders, business leaders must work to redress them.

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