As the COVID-19 pandemic continues to reshape economies worldwide, a coalition of U.S. investors, businesses, and civil society groups is calling on the Biden administration to implement reforms aimed at addressing the nation’s rising inequality and widening racial wealth gap.
The pandemic has disproportionately impacted minority communities and people of color in the United States. High unemployment rates and the permanent closure of many businesses have exacerbated existing economic disparities.
While millions faced financial hardship, Forbes magazine reported a surge in wealth among the nation’s richest individuals. In its annual list of billionaires released on Tuesday, Forbes added 493 new billionaires in 2020, noting that a new billionaire was added every 17 hours and 39 minutes during what it called a “record-setting year.”
Conversely, research reported by The Washington Post indicates that nearly eight million Americans fell into poverty in the second half of 2020, highlighting the growing economic divide.
The coalition of investors and advocacy groups emphasizes that significant reforms are necessary to tackle what they describe as a “monumental crisis” posed by COVID-19 and the persistent racial wealth gap. They propose the creation of a White House Initiative on Inclusive Economic Growth to promote socially responsible market practices.
President Joe Biden has signaled that addressing racial economic inequality is a priority for his administration. Following the passage of a $1.9 trillion stimulus package and proposing a $2.3 trillion infrastructure plan, the administration aims to stimulate pandemic recovery and invest in the nation’s future.
Additionally, President Biden is requesting a $9 billion budget increase for the Department of Housing and Urban Development. This includes expanding federal housing assistance voucher programs and promoting affordable housing initiatives.
Despite these efforts, economists argue that more comprehensive measures are needed to close the racial wealth gap. A 2017 report by the Economic Policy Institute found that “average wealth for white families is seven times higher than the average wealth for black families.” These disparities persist even after accounting for age, household structure, education level, income, or occupation.
According to a report by McKinsey & Company, closing the racial wealth gap could boost U.S. gross domestic product by 4 to 6 percent by 2028. Economists suggest that beyond stimulus packages and housing expansions, the U.S. needs to address issues such as affordable and accessible education, business development programs, student loan debt relief, and other systemic barriers.
These challenges have been further intensified by the COVID-19 pandemic, underscoring the urgent need for actionable solutions to promote economic equity and inclusive growth.
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