Can addressing inequality unleash economic growth?

Barriers to entering the field of invention have led to negative outcomes for individuals and for the economy. We built a vibrant middle class in the post-war era because we started to tear down many of the barriers that had kept women of all races and men of color from contributing their full talents. A quarter of the growth in aggregate output from 1960 to 2010 can be explained by improved allocation of talent. We didn't finish the work. We allowed barriers to opportunity to return, or new ones to grow up. This turned out to be a tragedy, not only for those people who lost their livelihoods, but also for the economy. Policy can make a difference. The Civil Rights Act really did make a huge difference in the opportunities and gains for Black Americans and for women. Subsequent advancements in automation and trade, which left a lot of workers behind, were not accompanied by changes in policy to help those workers adapt. One thing that we know is that, especially in laboratories or patent teams where people are working together, equality of opportunity is much more than just getting things like as many job interviews. Women and underrepresented minorities are not pulled in and kept in the same way as others. We may, in fact, as a society be underinvesting in the people who could be creating the companies that would be creating the jobs that put those people to better use. A key concern now is that this could be a recession that would harm pathways to the middle class for a long time. © 2021, National Association for Business Economics.