A US firm, Citigroup has said the economy has lost about $16 trillion to racism over the last 20 years spanning across major sectors of the country.
According to moguldom.com, the report by Citigroup inequality in wages, business investment, housing and education between Black and white Americans hurt all Americans.
Disproportionately high incarceration rates among Black Americans, voter suppression and conscious bias in hiring all hinder the U.S. from closing the gap, Citigroup said.
“Racial inequality has always had an outsized cost, one that was thought to be paid only by underrepresented groups,” Citigroup Banking Chairman Raymond McGuire said in a statement. “What this report underscores is that this tariff is levied on us all.”
In the report introduction, McGuire quoted Dr. Martin Luther King Jr. in a letter King wrote from a Birmingham jail. “We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly.”
Citigroup arrived at $16 trillion by including the following:
• Improving access to housing credit could have added 770,000 Black homeowners and $218 billion to GDP over the last 20 years.
• Helping Black students access higher education (college, graduate and vocational schools) could have bolstered lifetime incomes by $90 to $113 billion.
• Allowing Black entrepreneurs access to fair and equitable loans could have helped create $13 trillion in additional business revenue and 6.1 million jobs per year.
• Closing the Black racial wage gap 20 years ago might have provided an additional $2.7 trillion in income available for consumption and investment.
The report outlined steps that corporations, individuals and governments can take to improve outcomes, including:
• Corporations can dismantle structural barriers to hiring Black talent.
• Individuals can embrace delayed gratification and risk by investing in the stock market.
• Governments can provide guaranteed wages, income support and jobs. Policy suggestions include raising the minimum wage, creating a living wage, introducing income supplements or supports and stabilizing jobs.
Black households’ net worth remained flat at $35,400 between 1995 and 2016, while white households’ net worth grew 43 percent to $61,200, according to Federal Reserve data, CBS News reported.
Moody’s Investor Service found that 44 percent of Black households owned their homes in 2019, compared with 74 percent of white households.
These inequalities have reduced the country’s wealth, consulting firm McKinsey reported in a 2019 study. The GDP — the total value of goods and services — could be up to 6 percent higher by 2028 if the racial wealth gap is closed, McKinsey concluded.
To address the issue of the wealth gap, lawmakers must pass targeted policies that help increase household income for Black Americans, McKinsey said.