United States financial body, Citigroup, has inferred the huge cost systemic racism has brought to the U.S., which has rolled over to $16 trillion over the past two decades.
The total is the combined cost of racial disparities in wages, education, investment in Black-owned businesses, and the housing market.
“Racial inequality has always had an outsized cost, one that was thought to be paid only by underrepresented groups,” Citigroup Vice Chairman Raymond J. McGuire told Yahoo News. “What this report underscores is that this tariff is levied on us all, and particularly in the U.S., that cost has a real and tangible impact on our country’s economic output. Now, more than ever, we have a responsibility and an opportunity to confront this longstanding societal ill that has plagued Black and brown people in this country for centuries, tally up the economic loss and as a society, commit to bring greater equity and prosperity to all.”
Days after Citigroup released the report, the financial giant announced its commitment of over $1 billion to close the racial wealth gap. In January, Citigroup launched a $150 million fund to support minority businesses.
Citigroup is the latest company that has tried to quantify the economic impact of systemic racism ravaging Black people, including the Whites in the U.S.
According to the report, Black workers in the U.S. have lost $113 billion in potential wages over the past two decades because they couldn’t get a college degree. The housing market lost $218 billion in sales because Black applicants couldn’t get home loans. The study also found out that about $13 trillion in business revenue never flowed into the economy because Black entrepreneurs couldn’t access bank loans.
Citigroup added the U.S. could add $5 trillion in gross domestic product over the next five years if the gaps were closed today.
“Closing the wage, housing, education, and business investment racial gaps can help narrow the wealth gap, which is significant for facilitating homeownership, business, and job creation, plus establishing a pipeline for intergenerational wealth accumulation,” the report states.
CBS News reported McKinsey & Co. conducted a similar study released in 2019, and concluded the U.S. GDP, the total value of goods and services could be up to 6% higher by 2028 if the racial wealth gap is closed.
“The country has over a trillion dollars to gain from the effort,” the McKinsey study concluded.
