PolicyLink and PERE
94
An Equity Profile of Orange County
$258.1
$341.3
$0
$50
$100
$150
$200
$250
$300
$350
$400
Equity
Dividend:
$83.2 billion
A potential $83 billion per year GDP boost from racial equity
Orange County stands to gain a great deal
from addressing racial inequities. The county's
economy could have been nearly $83 billion
stronger (a 32 percent increase) in 2016 if its
racial gaps in income had been closed. The
dollar value of this equity dividend is the 10
th
largest of any metropolitan region and ranks
15
th
as a percentage of GDP.
Using data on income by race, we calculated
how much higher total economic output
would have been in 2016 if all racial/ethnic
groups who currently earn less than whites
had earned similar average incomes to their
white counterparts, controlling for age.
We also examined how much of the region's
racial income gap was due to differences in
wages and how much was due to differences
in employment (measured by hours worked).
Nationally, 33 percent of the racial income
gap is due to differences in employment. In
Orange County, that share is only 23 percent,
with the remaining 77 percent due to
differences in hourly wages.
Orange County's GDP would have been $83 billion higher if there were no racial gaps in income
Economic benefits of inclusion
94. Actual GDP and Estimated GDP without Racial Gaps in Income, 2016 (in 2016 dollars)
Sources: Bureau of Economic Analysis; Integrated Public Use Microdata Series.
Note: The "equity dividend" is calculated using data from IPUMS for 2012 through 2016 and is then applied to estimated GDP in 2016. See the "Data and methods"
section for details.
