Yahoo Finance Goldman Sachs report: Reducing Black disadvantage in wealth could deliver $400bn GDP boost
Reducing the Black disadvantage in employment, income and wealth could deliver a $400bn (£312bn) boost to US GDP, according to a new equality report.
Jan Hatzius, chief economist at Goldman Sachs (GS), said tackling economic inequality was not only about fairness, it could also bring huge financial benefits.
"Given the pivotal role of invention and innovation in today’s economy, this could add a growing amount to the overall size of the economic pie. Reducing the economic disadvantages of Black Americans would therefore not just make America a fairer, but also a richer society," said Hatzius in the Goldman Sachs Investing in Racial Economic Equality report.
Black Americans remain heavily disadvantaged across a broad range of economic measures, including employment, earnings, household income, and wealth.
Disadvantages start as early as age two and continue into adulthood particularly among Black men, due to a lack of upward mobility.
Research shows supporting disadvantaged children from an early age via subsidised education programmes can yield large labour market benefits, boosting annual GDP by a predicted 2%.
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"If these and other policies improve the lifetime earnings prospects of Black Americans, this will also add to the country’s economic potential over time," said Hatzius.
The employment to population ratio for Black Americans has averaged about five percentage points less than for white Americans for several decades.
Black full-time workers earn 20% less in labour income than white ones, and Black households receive 40% less total income and 90% less net wealth than white households.
"Except for a temporary improvement during the late 1990s labour market boom, these disadvantages have been strikingly constant over time, in the case of the household income gap, since at least 1967," added Hatzius.
