Racism has cost the U.S. economy more than $16 trillion in the last 20 years, says Citigroup report

As the fight against systemic racism and racial disparities continue in the United States, Citigroup carried out a report to show how much impact racism has on the U.S. economy.

According to the financial firm, the United States economy has lost more than $16 trillion in the last twenty years due to systemic racism. The sum was arrived at by totaling the combined cost of racial disparities in salary, investment in Black-owned businesses, education, and the housing market.

The report stated that Black workers in the United States have lost $113 billion in potential wages in the last twenty years due to their inability to get a college degree. The housing market also saw a loss of $218 billion in sales because Black applicants couldn’t secure a mortgage. Also, nearly $13 trillion in business revenue wasn’t pumped into the economy because of the difficulties Black entrepreneurs had in accessing bank loans.

Citigroup Vice Chairman Raymond J. McGuire told Yahoo News that racial disparity has always had costly impact on the economy. “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 as a society, commit to bring greater equity and prosperity to all,” McGuire said.

The financial giant is setting an exemplary step in closing up racial wealth gap in the United States. A few days after it released the report, the firm announced that it will invest more than $1 billion. In January, Citigroup reportedly launched a $150 million fund to support minority businesses, just a few months before the death of George Floyd which stirred up the Black Lives Matter movement once again.

Citigroup said the U.S. economy can generate $5 trillion in GDP over the next five years if it is able to close the wealth gap today.

“Closing the wage, housing, education, and business investment racial gaps can help narrow the wealth gap, which is significant for facilitating homeownership, business, and job creation, plus establishing a pipeline for intergenerational wealth accumulation,” the report stated.

McKinsey & Co. conducted a similar study last year, according to a CBS News report. The study stated that the U.S. GDP could be up 6% higher by 2028 if only the racial wealth gap can be closed soon enough. “The country has over a trillion dollars to gain from the effort.”