24 Apr, 2021

The Effects of Racism on the American Economy

According to economists, the risk of a stock market crash is already large given the current situation and expectations, and this collapse will be more dangerous than the economic crisis in 2008. According to an official report: If the United States continues to mishandle its immigration policy, this will harm one of the vital pillars of prosperity and American security. The country could be judged by a long and slow deterioration in its position in the world.

US immigration policy confirms that the United States is lying about its losses from refugees. Rather, it has reaped tremendous benefits from opening its doors to immigrants as well as to students, skilled employees, and others.  Today there are twelve million immigrants currently living illegally in the United States and trying hard to win the right to remain legally.

Racial discrimination policies represented an obstacle to the prosperity of the American economy and wasted trillions of dollars on it in the past twenty years, which negatively affected the lives of Americans.

How much does racism cost the American economy?  This cost is high and has caused the American economy to lose 16 trillion dollars over the past 20 years!

The most obvious and important missed opportunity is wage inequality.  For example, an African American earns $ 1 million less than a white woman over his lifetime.  To put in place anti-discrimination policies in the workplace 20 years ago is a big failure since it resulted in the wasting of an enormous sum that could have been added to GNI if there were no salary differences.  In addition, the United States is prohibited from achieving a 0.2% increase over the current growth rate due to discrimination in income distribution.

The problem is beyond wages, as the net wealth, meaning assets minus debt, of an African-American family, on average, is eight times less than the net worth of a white family, according to Federal Reserve calculations.

One of the main components of the Americans’ wealth is the value of their homes, and here the distinction is very stark. The gap between the percentage of black Americans who own property and the proportion of whites has increased since the 1960s.  And when these minorities are able, despite everything, to own a property, it is often in cheap neighborhoods, which means that the value of their properties rises very slowly.

If banks tend to be reluctant to grant mortgage loans, they are equally cautious in financing businesses and establishing companies for ethnic minorities, which is another great opportunity missed due to racism.  It is estimated that if banks had dealt fairly and equitably with African American entrepreneurs who came to ask for money to set up their businesses, this could have generated $ 13 trillion in additional revenue for the American economy and created nearly 6 million jobs 20 years ago.  .

Due to the overrepresentation of whites in the business community, money is often spent in other ways, which deprives minorities of access to appropriate services or products.  It is this accumulation of racism in daily life and institutional discrimination that has cost the US economy dearly.

Ending racial inequalities in the United States could generate more than five trillion dollars in additional wealth within five years.