Citi released a new report that estimates the economic losses attributed to racial inequality in the United States over the last two decades. The Citi Global Perspectives & Solutions (GPS) report Closing the Racial Inequality Gaps: The Economic Cost of Black Inequality in the U.S. posits the lost GDP of systemic and societal racism and discrimination faced by Black people over the last 20 years to be $16 trillion. This loss includes gaps in wages, access to housing and higher education and investment in Black-owned businesses. The report also provides recommendations the public and private sectors can take to help close the gap.
“Racial inequality has always had an outsized cost, one that was thought to be paid only by underrepresented groups,” Raymond J. McGuire, vice chairman of Citigroup and chairman of Banking, Capital Markets and Advisory at Citi, said. “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.”
The report identifies the underlying causes of the racial and economic gaps exacerbated by the COVID-19 pandemic and discusses the value of closing gaps. Report authors prognosticate that if racial inequity gaps were closed today, the equivalent add to the U.S. economy over the next five years could be $5 trillion of additional GDP, or an average add of 0.35 percentage points to U.S. GDP growth per year and 0.09 percentage points to global GDP growth per year.
“One important thing that we can do is to show the costs of racial inequality through objective analysis which is what the authors of this report have sought to demonstrate,” Dr. Catherine L. Mann, global chief economist at Citi and one of the principal authors of the report, said. “Our overarching goal for the Citi GPS series is not only to tackle the key opportunities and challenges of the 21st century, but also to address complex societal questions and not to shy away from difficult subjects. As such, we believe that we have a responsibility to address current events and to frame them with an economic lens in order to highlight the real costs of longstanding discrimination against minority groups, especially against Black people and particularly in the U.S.”
Additional notable findings include:
The report also outlines several steps that governments, corporations and individuals can take to improve outcomes, including:
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