As it turns out, racism is expensive, a new study shows
Ongoing protests sparked by the death of George Floyd have reignited a national discussion around the systemic racial discrimination in the country. To add insult to injury, a major bank has now been able to quantify just how much money the economy has lost as a result of discrimination against Black Americans.
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According to a new study by Citigroup, since the year 2000, the United States has lost a whopping $16 trillion in gross domestic product due to discriminatory practices in a plethora of areas from education to access to business loans.
Considering the U.S. GDP totaled $19.5 trillion last year, losing almost the same figure amounts to a massive deficit for everyone. Researchers also found that failing to address these oppressive practices will only lead to continued losses.
Citigroup estimates that if America made a concerted effort to reverse discrimination against Black Americans, in just five years the economy would see a $5 trillion boost.
“We believe 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.,” writes Raymond J. McGuire, a vice chairman at the bank and the chairman of its banking, capital markets, and advisory team.
NPR reports that the study came up with the $16 trillion figure by examining four key racial gaps between African Americans and their white counterparts:
- $13 trillion lost in potential business revenue because of discriminatory lending to African American entrepreneurs, with an estimated 6.1 million jobs not generated as a result
- $2.7 trillion in income lost because of disparities in wages suffered by African Americans
- $218 billion lost over the past two decades because of discrimination in providing housing credit
- And $90 billion to $113 billion in lifetime income lost from discrimination in accessing higher education
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Due to these findings, Citigroup now urges key stakeholders to make it a priority to address discrimination, not just as a social issue but also as a matter of fiscal responsibility.
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