Shapecharge | E + | Getty Images
Racial inequality, of course, is bad for the US in a myriad of ways, many of which are difficult to calculate directly. But now Citi has questioned at least one aspect of social injustice, and a new study found that $ 16 trillion has been cut from US GDP due to discrimination in the past two decades.
The results of the report are based on an analysis of factors such as wages, education, housing, as well as fair credit to black entrepreneurs.
"Racial inequality has always had excessive costs that were believed to be paid for only by underrepresented groups," said Raymond McGuire, Citigroup vice chairman and one of the report's authors. "What this report highlights is that this tariff is levied on all of us, and especially in the US, these costs have a real and tangible impact on our country's economic performance."
Most of the $ 16 trillion lost is due to a lack of credit to black entrepreneurs, who Citi estimates have cost $ 13 trillion in business revenue and 6.1 million new jobs per year. Another $ 2.7 trillion in income has been lost to the racial wage gap for black Americans, while the lack of access to higher education for black students could have increased lifelong incomes by $ 90-113 billion. After all, a lack of equity in access to home loans that could have resulted in another 770,000 black homeowners cost $ 218 billion.
Additionally, the study found that if racial inequality gaps were closed today, $ 5 trillion could be added to the economy over the next five years.
The report came in conjunction with Citi's announcement that it would invest more than $ 1 billion in strategic initiatives over the next three years to address the racial wealth gap.
Called the "Action for Racial Equality," it will focus, among other things, on increasing investment in black-owned companies and promoting growth in black home ownership.
"Tackling racism and closing the racial wealth gap is the number one challenge in creating a fair and inclusive society, and we know that more of that is not enough," said Michael Corbat, CEO of Citi, in a statement The Company Endeavors to use its resources and influence to "combat the effects of racism on our economy".
– CNBC's Michael Bloom and Courtney Connley contributed to the coverage.
Subscribe to CNBC PRO for exclusive insights and analysis as well as live business day programs from around the world.