U.S. GDP Lost $16 Trillion Since 2000 Due to Racism, Citi Says

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.

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 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.”

Read more: Fed wants banks to say what theyre doing to promote diversity

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.