Economists are ‘lazy’ when it comes to studying effects of racism, says AFL-CIO chief economist

But for too long, economists have assumed in their research that race does not affect individual outcomes, to the point that the racism people experience on a daily basis is virtually non-existent in economic research, the chief economist of AFL-CIO William Spriggs at a panel Tuesday on race and economics hosted by the Federal Reserve.

“There doesn’t seem to be any evidence that will get economists to admit: yes, there is discrimination, and yes, it matters,” Spriggs said.

The panel was the latest in a series organized by the Federal Reserve’s 12 District Banks to examine how structural racism “threatens” the economy and “limits economic opportunities for people of color.”

The series comes as black Americans have borne a disproportionate share of both the health and economic impacts of the coronavirus pandemic. Meanwhile, the United States has been engaged in a national conversation about racism since the murder of George Floyd by a Minneapolis police officer last year.

It was Floyd’s murder that inspired Spriggs, a professor of economics at Howard University, to write a letter to fellow economists, urging them to rethink their assumptions about race, especially when it comes to the police.

“Watching the brutal and heartbreaking murder of George Floyd got them thinking about the bigger problem of what’s really wrong, because their training as economists allowed them to silently accept a lot of ‘data’ that they understand now shouldn’t be assumed, and that ‘data’ actually matters, ”he wrote in the July letter.

Race is the variable “where economists are lazy,” Spriggs said Tuesday.

It’s important to note that the research economists produce, which often disregards race, often informs policies that intentionally or unintentionally disadvantage people of color in practice, Spriggs said.

San Francisco Fed President Mary Daly, who moderated the panel Spriggs spoke on, said she found her letter “surprising.”

“It changed the way I approach things,” she added. She noted that in research she published shortly after receiving her doctorate in economics, she did exactly what Spriggs recommended in her letter by making race a control variable, which means she did could not have an impact on the results of his research.

Sendhil Mullainathan, a University of Chicago economist who also spoke at the panel, said he admired how Spriggs’ heartfelt letter contrasted with the “clinical nature” of most economic writing.

Even though Mullainathan, like most economists, deals with large sets of data day in and day out, he said he makes a conscious effort to never lose sight of the fact that behind every data point is a human being.

Mullainathan and co-researcher Marianne Bertrand once studied how fictitious candidates for “white sounding” names clash with candidates for “black sounding” names. Candidates with white names “received 50% more callbacks for interviews,” the study found.

“There’s an element of this work that we do where we have to maintain neutrality, and we have to maintain a certain amount of clinical elimination,” Mullainathan said. “But I’m afraid we’ve left too much room for this infiltration and lost some of our core humanity in the process.”

There is no silver bullet to correct the racism that has pervaded the economy, Spriggs said. But a good place to start the cleanup process would be to invite more people of color into the “room where this is happening,” he said, referring to a song from the musical “Hamilton”.

Daly suggested economists could become more aggressive in challenging the status quo.

“We’ve all been through a year that we can’t look away from,” Daly said. “We have seen disparities in health and economic opportunities and disparities in safety outcomes, the ability to get to your home without incident. As a profession, we remain passive observers of these things – often documenting without contesting.