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Racial inequality is bad for the United States in countless ways, many of which are difficult to calculate directly. But now Citi has put a number on at least one aspect of social injustice, finding in a new study that $ 16 trillion has been wiped out of US GDP over the past two decades due to discrimination.
“Racial inequality has always been too costly, thought to be paid only by underrepresented groups,” said Raymond McGuire, vice president of Citigroup and one of the report’s authors. “What this report emphasizes is that this tariff is imposed on all of us, and especially in the United States, that costs have a real and tangible impact on our country’s economic output.”
Most of the $ 16 trillion lost is based on a lack of loans for black entrepreneurs, which Citi estimates cost $ 13 trillion in business revenue and 6.1 million new jobs a year. Another $ 2.7 trillion in revenue was lost due to the racial pay gap between black Americans, while a lack of access to higher education for black students could add $ 90 billion to 113 billion in lifelong income. Finally, the lack of equality in access to housing loans, which could lead to an additional 770,000 black homeowners, costs $ 218 billion.
In addition, the study found that if the gaps in racial inequality are bridged today, $ 5 trillion could be added to the economy over the next five years.
The report came with Citi’s announcement that it would invest more than $ 1 billion in strategic initiatives over the next three years aimed at bridging the racial wealth gap.
Called “Action for Racial Equality,” it will focus on increasing investment in black property ownership, as well as promoting the growth of black home ownership, among other things.
“Tackling racism and overcoming racial wealth differences is the most important challenge we face in creating a just and inclusive society, and we know we will not do more than that,” said Citi CEO Michael Korbat. added that the company is committed to using its resources and influence to “combat the impact of racism in our economy”.
– Michael Bloom of CNBC and Courtney Conley contributed to the reporting.
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