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US GDP lost $16 trillion since 2000 due to racism, says Citigroup study

Bloomberg September 25 | Updated on September 25, 2020 Published on September 25, 2020

If the US could instantly end the most severe forms of economic discrimination against African Americans, it could give a $5-trillion boost to gross domestic product over the next five years, according to a new study by Citigroup Inc.

The New York-based bank looked at the costs of lost wages, less access to home and small business loans and limited access higher education. Over the past 20 years, GDP lost about $16 trillion because of race-based inequalities, the firm estimated in a study released recently.

Citigroup concluded the costs of racism are greater than did a 2019 McKinsey study, which estimated that the racial wealth gap would cost the US economy $1.5 trillion through 2028, but both agree the status quo is a drag on growth.

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“What this report underscores is that this tariff is levied on us all, and particularly in the US, that cost has a real and tangible impact on our countrys economic output,” Citigroup Vice-Chairman Raymond J. McGuire said in the report. “We have a responsibility and an opportunity to confront this longstanding societal ill.”

Citigroup also concluded that closing the wage gap two decades ago could have freed up $2.7 trillion in income for consumption and investment, and fair lending to Black entrepreneurs could have generated $13 trillion in business revenue over the same time period.

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Published on September 25, 2020
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