May 29, 2024 - Business

Study: Narrowing Black inequality is worth $1T in growth

Illustration of a pattern of briefcases in different skintones.

Illustration: Maura Losch/Axios

Addressing the roots of Black economic inequality has the potential to unlock as much as $1 trillion per year in domestic U.S. economic growth, according to a new study by the Black Economic Alliance Foundation.

Why it matters: The study arrives at a time when public and corporate commitments to diversity-based initiatives — many of which were a response to the turmoil of 2020 — are being questioned or seemingly in full retreat.

The big picture: The Black Economic Alliance (BEA) Foundation's research provides a menu of what the organization identifies as "a suite of specific, actionable interventions that companies and philanthropies could implement at scale, resulting in sustainable and impactful economic outcomes for Black communities."

  • The 29-page "architecture for action" zeroes in on key cornerstones of economic advancement that include housing, real estate, health care, education, criminal justice, business and labor markets.
  • "These interventions are identified for their proven success in providing achievable and transformative outcomes toward improving Black work, wages, and wealth," the BEA study writes.
  • "With these solutions, we can help close the economic gaps that Black Americans face, and, in so doing, invigorate the entire American economy, potentially generating $1 trillion per year in GDP."

By the numbers: Citing data from Citibank and the Bureau of Economic Analysis, the Black Economic Alliance's research argues that Black economic inequity has siphoned $16 trillion from the U.S. economy over the past 20 years.

  • Had those gaps been eliminated two decades ago, last year's nominal GDP of $27 trillion would have been $43 trillion, the foundation adds.

What they're saying: The study "offers needle-moving interventions to address the unique barriers to economic opportunity facing Black Americans," Samantha Tweedy, CEO of the Black Economic Alliance Foundation, tells Axios via email.

  • "It shows corporate and philanthropic leaders exactly where and how to have the biggest impact on expanding Black prosperity - and, in so doing, the entire economy," she adds.

The bottom line: Nowadays, vocal defenders of diversity-based initiatives are increasingly few and far between.

  • But the BEA's plan — along with prominent business leaders like Dimon and Claure — makes a compelling case that economic equality is a dollars and cents issue.
Go deeper