The systematic gaps that exist for Black Americans could have cost the U.S. economy $16 trillion over the past 20 years, according to a study issued by the bank Citigroup.
Analyzing four key areas of economic racial gaps that exist between Black and white Americans, analysts argue that closing these gaps can add about $5 trillion to the U.S. gross domestic product (GDP) over the next five years.
GDP is a measure of the total monetary value of a country’s final goods and services, and it paints a picture of the health of a given economy. Generally, a higher GDP indicates a strong economy. In Citigroup’s analysis, closing racial disparities within wages, housing access, higher education opportunities, and lending practices would result in a 0.35 percentage point increase to the total U.S. GDP.
“Our overarching goal for the Citi GPS series is not only to tackle the key opportunities and challenges of the 21st century, but also to address complex societal questions and to not shy away from difficult subjects,” writes Citi Vice Chairman Raymond J McGuire. “As such, we believe we have a responsibility to address current events and to frame them with an economic lens in order to highlight the real costs of longstanding discrimination against minority groups, especially against Black people and particularly in the U.S.”
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The economic disparity resulting from the country’s history of systemic racism has been at the forefront of national dialogue as part of the Black Lives Matter protests that ensued over the summer in the wake of multiple police killings.
The report goes on to highlight public policy changes that can alleviate the racial gaps that exist in these economic sectors. It highlights unfair policing that results in Black Americans being five times as likely to be incarcerated versus their white counterparts, contributing to an overrepresentation in U.S. prisons.
Voting is also a key area analysts say needs to be more accessible to Black Americans. The report cites that over the last decade, half of the U.S. states have implemented voting restrictions that directly target Black Americans. It estimates that of the 3.1 million adults banned from voting, about 2.2 million are Black.
Discrepancies in health outcomes is also mentioned in the report, citing recent statistics reporting that Black, Hispanic, and Native Americans are more likely to have severe and fatal COVID-19 infections than white Americans.
In addition to an imbalance in health outcomes, ethnic minorities in the U.S. have also witnessed greater financial insecurity as a result of the coronavirus pandemic, largely due to Black Americans being overrepresented in essential jobs exposed to COVID-19 or sensitive to economic disruption, and having less access to capital needed to keep Black-owned businesses and firms afloat amid economic shutdowns. Financial analysts say these unequal outcomes are symptoms of the insidious economic disparities of institutionalized racism in the U.S.
Among the multiple solutions to closing these racial economic gaps, guaranteed income, employment, targeted tax policy such as the Earned Income Tax Credit and Child Tax Credit, and greater community investment are all tenable options. They all, however, require strong government and legislative action on federal, state, and local levels.
“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,” the report authors write. “Attitudes and policies undermining equal access are at the root of the racial gaps plaguing U.S. society.”
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