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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.”



Copyright © 2019 by [The Sojourner's Truth]. All rights reserved.
Revised: 10/01/20 10:52:28 -0400.

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