PHILADELPHIA, PA – In America, Racism is as American as apple pie. Racism has deep historical roots in this country. It is a savage reality. Racism is so embedded in American culture that many in this country fiercely defend and promote its existence explicitly and implicitly. But at what cost and toll have racism weighed on the American economy?
“Most people could care less about the inner workings of economics. Unless, of course, it begins to impact their jobs, their income, and their wealth,” reports Wilfred Brown, successful author/entrepreneur and contributing writer to the Kinder Institute for Urban Research/Rice University.
One of the solid measures of the economic health of a nation is its Gross Domestic Product (GDP). GDP is the broad measure of the overall domestic production of a country. It is an economic scorecard of a country’s economic well-being.
“McKinsey and Company (a global management consultancy) estimated in a recent report that by closing the racial wealth gap created by systemic racism, the U.S. GDP could be 4–6% higher by 2028. In nominal dollars, consumption and investment will cost the U.S. economy between $1 trillion and $1.5 trillion between 2019 and 2028. That is roughly $2,900–$4,300 in GDP per capita. Effectively, racism is costing white Americans $2,900–$4,300 for every man, woman, and child,” Brown claims.
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Historically, White America seems to give racism serious consideration only when it disrupts their financial well-being. For example, the 1950s, 381 day African American boycott of Montgomery, Alabama’s racist bus transit system); or when there is a convergence of their self-interests with Black American suffering (e.g., advocacy to extend civil rights protections to gay individuals).
Joseph Losavio, a contributing writer for the International Monetary Fund, postulates that racism hinders its victims from prospering and realizing their full economic potential. “Racism has restrained Black economic progress for decades. The benefits of the post–World War II GI Bill, which fueled the growth of the American middle class, were largely denied to Black people at the insistence of white members of Congress from the South desperate to enforce racial segregation—war heroes or not.”
For hundreds of years in America, African Americans, in particular, have been racially abused in horrific ways: enslaved, physically abused, emotionally terrorized, politically castigated, murdered and tortured for sport, restricted from certain neighborhoods, denied access to quality education and healthcare, and economically pimped and raped. And overwhelmingly, many White American influencers and leaders are reluctant or outright against embracing a national conversation about resolving racism.
For many White Americans, perhaps broaching a conversation about racism is too sensitive a reminder of the savage atrocities and oppressive discriminatory practices they have perpetrated against African Americans for generations. Such conversation is quickly swept under the rug along with conversation about reparations-investment.
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In 1945, during World War II, America dropped an atomic bomb on Japan. This was the first time in history an atomic bomb was deployed. The explosion killed thou- sands of Japanese citizens. Afterward, America publicly helped Japan rebuild its economy and infrastructure via U.S. reparations-investment of $2.2 billion. Worse, Amer- ica has killed millions of African Americans during slavery and created policies and laws to oppress millions of African Americans over generations; yet, when the conversation about reparations-investments for African Americans is brought up, it’s dismissed as foolishness and inconceivable, and usually punctuated with “just get over it.”
Over many years, the spending power of African Americans has grown. The current spending power of African Americans rivals the GDP of some entire nations. As strong and impressive as this is, America’s racist influencers con- tinue to marginalize and demean this ethnic community with its venomous hatred and discriminatory policies and treatment.
“African-American buying power has seen impressive gains since the end of the last economic downturn, jumping from $961 billion in 2010 to an estimated $1.3 trillion in 2018. Since 2000, the African-American market has seen a 114% increase in buying power,” reported the Selig Center for Economic Growth/University of Georgia via media outlet NewsWise.com, 2019.
To put the $1.3 trillion economic spending power of African Americans in perspective, in comparison:
• The country of Belize’s entire economy was valued at $1.97 trillion (2019).
• Citigroup (nationally ranked 4th among banks in Amer- ica) has total assets of $1.67 trillion (according to Bankrate.com, 2021).
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Achieving racial equity in America is an elusive goal. Yes, there have been great strides made by the African American community. An increase of higher educated individuals from this demographic, and an uptick in African American entrepreneurs and black-owned businesses; and consistent population growth- but there are still miles of ground to cover to achieve race equity in this country. “The percentage of African-Americans who completed college continues to rise (23 percent in 2017, up from 17 percent in 2000), and the population is growing at 22.7 percent since 2000, faster than the national average of 16.3 percent,” Selig Center for Economic Growth/University of Georgia.
Even with these noble advancements in the African American community, the wealth gap between Whites and African Americans in America is still a great divide. Losavio estimates that this wealth gap will cost the United States economy “between $1 trillion and $1.5 trillion in lost consumption and investment between 2019 and 2028.” This cumulative loss undermines America’s GDP in the coming years, thus weakening our country’s economic might among the global community.
The research underscores that racism in America is undermining the economic growth of this country. It also undermines the wealth and income of White people (and others) that typically don’t consider themselves victims of racism’s far-reaching ripple effects.
Dr. Lisa Cook, an African American economist, in a 2020 New York Times article wrote, “research estimates that aggregate economic output would have been $16 trillion higher since 2000 if racial gaps had been closed. To put that total in context, the gross domestic product of the United States in 2019 was $21.4 trillion. The researchers estimate that economic activity could be $5 trillion higher over the next five years if equal opportunity is achieved.”
That’s a projected $5 trillion that Americans will not realize because of a racist-driven economy and discriminatory practices that continue to persecute African Americans, in particular, and other ethnic minorities in general in this country. America loves clinging to racism more than it loves becoming an even greater economic power nationally and worldwide.
In a CBS News report, Citigroup published a research study in September 2020 and reported, “The housing market lost $218 billion in sales because Black applicants couldn’t get home loans, and approximately $13 trillion in business revenue never flowed into the economy because Black entrepreneurs couldn’t access bank loans.”
Citigroup Banking Chair Raymond McGuire was quoted stating, “Racial inequality has always had an outsized cost, one that was thought to be paid only by underrepresented groups. What this report underscores is that this tariff is levied on us all.”
The tighter the squeeze of racism that America continues to exact on African Americans, the worse all Americans.
