There’s an economic cost to racism.
According to a report, “Closing the Racial Inequality Gaps: The Economic Cost of Black Inequality in the U.S.,” conducted by Citigroup and released on Wednesday, Sept. 23, 2020, the American economy is suffering due to discrimination and racist acts against Blacks.
The report broke down the value lost by discriminating against Blacks in multiple areas, estimating that the nation has lost $16 trillion over the past 20 years due to racism. That’s a significant number considering that the gross domestic product, or GDP, of the United States in 2019 — meaning the sum of all goods and services produced within the nation’s borders — was $19 trillion.
More than $13 trillion of potential business was lost due to discriminatory lending practices against Black entrepreneurs. Furthermore, 6.1 million jobs are lost when Black entrepreneurs are not provided with funding to start or expand businesses.
The report also reveals that $2.7 trillion of income was lost due to Blacks who face wage discrimination in the workplace. In terms of real estate, $218 billion has been lost in the past 20 years because of discriminatory practices in the housing industry. Blacks often face discrimination in terms of mortgage lending and where they can actually purchase a home, which could affect the value of the property.
Education also plays a role. The report found that $90 billion to $113 billion in income was lost from discrimination in higher education.
However, the report also revealed that America would gain $5 trillion if the practices were reversed in the next five years.
In a statement, Raymond J. McGuire, a vice chairman at Citigroup said, “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.”
