According to a new study, America has lost out on $16 trillion due to systemic racism. The study — released this week by Citigroup — focused on inequalities in education, housing, wages and business investments between Black and white Americans over the past 20 years.
“Racial inequality has always had an outsized cost, one that was thought to be paid only by underrepresented groups,” Citigroup Banking Chair Raymond McGuire said in a statement. “What this report underscores is that this tariff is levied on us all.”
Specifically, the study found that Black Americans have lost $113 billion in potential earned wages over the past 20 years due to not being able to obtain a college degree. Furthermore, the housing market has missed out on $218 billion in potential sales because African American applicants were denied home loans.
Additionally, Black entrepreneurs’ lack of access to bank loans meant that a potential $13 trillion in business revenue never materialized into the economy. What’s more, the study reports that the U.S. could make $5 trillion in Gross Domestic Product over the next five years if these inequalities stopped today.
These deficits reflect the “real costs of long-standing discrimination against minority groups, especially against Black people and particularly in the U.S.,” Citigroup economist Catherine Mann said in a statement.
Similarly, a McKinsey & Company study released in 2019 found that closing the racial wealth gap in the U.S. could increase total GDP up to 6 percent by 2028. At the time, the study said that America has “over a trillion dollars to gain” by passing targeted laws that boost African American household incomes. The Citigroup study found that Black incarceration rates, voter suppression and hiring bias were major detriments to closing the country’s racial wealth gap.
Along with releasing the study, Citigroup said on Wednesday (Sept. 23) that it would direct $1 billion toward wealth equality efforts, including a $550 million investment over the next three years to incentivize Black homeownership and another $50 million for Black entrepreneurs.
“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 [and] commit to bring greater equity and prosperity to all,” McGuire said.