Citigroup has published a new report which estimates that racial inequality cost the U.S. economy $16 trillion since 2000 while the failure to close wage gaps has resulted in $12 trillion in lost GDP. The research arrived at the initial figure by finding that the provision of fair and equitable lending to Black entrepreneurs would result in $13 trillion in revenue. Closing the Black wage gap would add a further $2.7 trillion to the economy while improved access to housing and education would result in a further $218 billion and $113 billion being added, respectively.
While the level of racial disparity highlighted by the report is jarring, the pandemic has made it worse. Race is a big part of the problem but there are other elements. If the white male-white female wage gap was closed two decades ago, it would have generated $5 trillion for the U.S. economy. Likewise, the earnings gap between white men and Blacks and Hispanics is also colossal and it would have led to a $7 trillion gain in GDP if it was eliminated 20 years ago. According to Citigroup, $5 trillion would be added to the U.S. econonomy over the next four years if the above gaps were closed today, leading to an annual growth rate of 0.4 percentage points.