Racism is holding back the US economy, and in particular, hindering the Black population, a new report finds.
Racial inequality in the United States has cost the country $16 trillion over the last 20 years.
A report generated by US-based CitiGroup has drawn attention once again to the wider failure of the country to address inequality between Black and white communities.
The report found if Black people were provided with fair and equitable lending by banks it could have created an additional $13 trillion in business revenue.
Whereas closing the Black wage gap could have added an additional $2.7 trillion in income per year. The staggering numbers expose how deeply disadvantaged the Black community has become over the decades.
The economists of the report added that if racial gaps were closed today the US economy would see $1 trillion of additional GDP every year for the next five years.
To put these numbers into perspective the annual GDP of the US is $20.5 trillion and at its heart is an underclass of people whose purchasing power is being suppressed at an industrial scale.
As racial tensions continue to deteriorate in the US, the report focuses on the underlying causes of this imbalance including wages, education, housing and investment.
“The 400 years of enslavement of Black populations in the Americas has residual effects that persist to this day despite tomes of legislation providing equal access to various aspects of American life under the law,” said the authors of the report.
CitiGroup is not the first entity to point out that structural racism is embedded in the very fabric of society, but it is, however, one of the few companies to put a price tag on that racism.
This analysis comes amid continued widespread protests against institutional police racism and brutality which disproportionately impact the Black community.
Protests flared up again after three white police officers were not charged with the death of an unarmed black woman, Breonna Taylor, who was sleeping in her bed.
The Covid-19 pandemic has also exposed how vulnerable millions of Americans, but in particular, the Black community, are close to the poverty line.
“The dual health and economic crises resulting from the coronavirus lays bare long-simmering racial tensions and inequalities that have plagued the US for centuries,” the report noted.
Increasingly, research shows that Black people in the US have been unfairly impacted by the coronavirus.
The Scientific American magazine suggested that “the coronavirus has infected and killed an outsize number of black people across the US.”
The economic fallout of the pandemic, alongside "repeated incidents of police brutality involving Black Americans has proven too great to ignore." It went on to add that “the result not only precipitated protests in the streets, but also a general reassessment of the very soul of the nation.”
According to a study by Harvard University researchers, Black people are three times more likely to be killed by the US police than their white counterparts.
The economists behind the report also stated that white families have more than eight times the wealth of Black households, and that homeownership rates among white people was almost 80 percent versus 47 percent for the Black community.
In the aftermath of the great financial crisis of 2008-09, black households faced a deeper fall in their economic standing. According to a report, it would continue to do so for decades to come.
The financial fallout from the pandemic will only make that more pronounced.
Another finding suggests that Black people are five times more likely to be sent to prison when compared to members of the white community, and represent 33 percent of the US prison population even as they account for only 12 percent of the total US population.
Being jailed in the US can result in a lifetime loss of earning potential, not least because the stigma relentlessly dogs jobseekers.
Many human rights campaigners in the US have argued that its justice system unduly criminalises Black people and that this, undoubtedly, has a knock-on effect when it comes to earnings.
“Societal inequities have manifested themselves into economic costs, which have harmed individuals, families, communities, and ultimately the growth and well-being of the US economy,” wrote the authors of the report.
The powerful document also argues for private businesses and the government to take proactive steps to address economic disparity. One such measure is to increase the minimum wage, which would significantly increase the economic wellbeing of many in the Black community who work in lower-paid sectors.