Researchers say racism costs the Australian economy billions each year. 

Research by Deakin University funded by VicHealth and the Australian Human Rights Commission has quantified the cost of racial discrimination in Australia. 

Racial discrimination is estimated to have cost the Australian economy $44.9 billion, or 3.6 per cent of GDP, each year in the decade from 2001-11.

Researcher Dr Amanuel Elias says that being able to quantify the cost of racism to Australian society is a crucial step towards addressing racial discrimination.

“Racial discrimination costs society in both a microeconomic sense, such as indirect costs related to the labour market; and a macroeconomic sense, such as intangibles related to negative physical and mental health,” Dr Elias says.

“Once we know what racial discrimination costs society, we have a strong information base from which to launch an economic argument for making a reasonable effort to reduce racial discrimination.”

In his three-year study, Dr Elias analysed national and state datasets to determine how often Australians experienced racism in order to establish its prevalence. 

He then examined almost 300 worldwide health studies to identify four highly-relevant mental health outcomes of racial discrimination – depression, anxiety, post-traumatic stress disorder, and psychological disorders.

Dr Elias then combined the data on the four health outcomes with statistics on the prevalence of racism to calculate the number of healthy years of life lost due to experiences of racism.

Finally, Dr Elias used established methods in health economics to convert the healthy years of life lost (known as Disability Adjusted Life Years or DALYs) into dollar values.

In his thesis, Dr Elias argues that the economic benefits of tackling racism are likely to outweigh the costs associated with fostering social cohesion.

“The overall economic cost of racial discrimination to an economy can serve as a benchmark to scope the size of anti-discrimination intervention,” Dr Elias said.

“In countries like Australia, where subtle interpersonal racism exists along with some forms of institutional discrimination, anti-discrimination interventions require relatively moderate spending.”

According to Dr Elias, the good news is that racial discrimination is a preventable social phenomenon.

“Research shows that anti-discrimination efforts that focus on the benefits of diversity can succeed in reducing racist attitudes and racial discrimination,” Dr Elias said.

“Concerted public awareness campaigns about the reality of racial discrimination and its consequences can alleviate its prevalence. For example, we know that positive contact among racially diverse groups is inversely related to the prevalence of racial discrimination and programs in schools have also shown considerable promise.”