(Bloomberg) -- If the U.S. 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 (NYSE:C).
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 Tuesday.
Citigroup concluded the costs of racism are greater than did a 2019 McKinsey study, which estimated that the racial wealth gap would cost the U.S. economy $1.5 trillion through 2028, but both agree the status quo is a drag on growth.
“What this report underscores is that this tariff is levied on us all, and particularly in the U.S., that cost has a real and tangible impact on our country’s 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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