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Citi Report: Systemic Racism Has Cost US Economy $16
Trillion in Last Two Decades
Sojourner’s Truth Staff
According to a new report
released by Citi last week, the United States economy has
lost $16 trillion in the last 20 years due to the impact of
systemic racism. The cost is a reflection of the disparities
that impact Black entrepreneurs, students, employees and
homeowners, according to the report compiled by Citi, also
known as Citigroup Inc, an American multinational investment
bank and financial services corporation with assets in
excess of $1,951 trillion and over 200,000 employees
worldwide.
“Racial inequality has
always had an outsized cost, one that was thought to be paid
only by unrepresented groups,” said Citigroup Vice Chairman
Raymond McGuire. “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.”
According to the Citi
report, the $16 trillion is derived from the fact that:
·
Black workers have lost $113 billion in potential salaries
and wages over the last 20 years because they haven’t been
able to get a college degree;
·
The housing market lost $218 billion in sales because Black
borrowers couldn’t get home loans;
·
Approximately $13 trillion in business revenue didn’t flow
into the economy because Black entrepreneurs couldn’t access
bank loans.
Part of the report, in
examining Federal Reserve data, found that White households’
net worth grew 43 percent, to $61,200, between 1995 and
2016, while it remained flat, at $35,400 for Black families.
Moody’s Investor Service reported that 44 percent of Black
families owned their homes compared to 74 percent of White
households. Citigroup economist Catherine Mann noted that
the study highlights “the real costs of long-standing
discrimination against minority groups, especially against
Black people and particularly in the U.S.”
“Future gains from
eliminating these gaps are enormous; benefiting not only
individuals, but also the broader U.S. economy with positive
spillover effects into the global economy,” according to the
study.
If racial disparities were
eliminated over the course of the next five years, roughly
$5 trillion could be added to the country’s GDP – an average
of about 0.35 percent annually. Goldman Sachs also published
a similar report earlier in the summer which estimated that
eliminating such disparities could boost the level of US GDP
around two percent annually, or about $400 billion. The
Goldman Sachs report also noted there would also be a global
impact to growth of around 0.09 percent annually.
Going forward, Citi
committed to spend over $1 billion to address the issue of
racial inequality over the next three years that will
include programs to increase access to banking and credit to
Black and Brown communities and increase investment in
Black-owned businesses and help more Black households
purchase homes.
Nevertheless, the path to
racial equality ran into yet another barrier just this past
week as the Trump administration expanded its
government-employee ban on “divisive” and “un-American”
anti-racism training, to federal contractors, perhaps
dealing a crippling blow to various corporate efforts to
increase workplace equality. That announcement runs counter
to the policies of many American companies, as well as state
and local government agencies that mandate diversity,
inclusion and equity training sessions for employees.
“We are in the midst of a
national reckoning on race and words are not enough,” said
Citigroup Chief Financial Officer Mark Mason. “We need
awareness, education and action that drive results.”
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