A blistering study released this week by Citigroup highlights the “real costs of long-standing discrimination against minority groups, especially against Black people” and exposes it as an economic shortfall borne by all, not just those directly affected.
According to the report: Closing the racial inequality gaps: The economic cost of Black inequality in the US, America could have been $16 trillion richer today by solving inequities in education, housing, wages, and business investment over the past two decades.
Education, income, housing, spending
- Black employees have lost $113 billion in potential wages over the past two decades because they couldn’t access education that would help them climb the career ladder. Fewer than 1% of Fortune 500 CEOs are black.
- The housing market lost $218 billion in sales because Black people couldn’t access mortgages or home loans.
- About $13 trillion in business revenue never flowed into the economy because Black entrepreneurs couldn’t access bank loans and Black-owned businesses are disadvantaged from the get-go.
Citigoup also estimates that an additional $5 trillion in gross domestic product could have flowed into the US over the next five years if those gaps and others were already closed.
Inequality does not just burden minorities
Commenting on the release of the report, Citigroup Banking Chair Raymond McGuire, said that the financial cost of racial inequality was often thought to impact the minority groups most affected when the reality is that it affects everyone.
“Racial inequality has always had an outsized cost, one that was thought to be paid only by underrepresented groups. What this report underscores is that this tariff is levied on us all,” he said.
This misconception over the impact is perhaps one of the biggest perceived disincentives to fixing the problem.
According to a survey conducted in late 2019 by the Center for Talent Innovation 58% of black professionals have experienced racial prejudice at work – much more than any other racial or ethnic group.
Furthermore, 65% of black professionals say that black employees must work harder to attain the same advancements in their careers as white professionals. Yet only 16% of white professionals agree with that statement.