caroline: from bloomberg's world headquarters in new york, i am caroline hyde. romaine: i'm romaine bostick. sonali: i'm sonali basak taylor riggs is off today. romaine: we are getting inflation reads from the world's biggest economies, france, germany, the u.k., and the u.s. rising prices it has been a concern not for policymakers and investors, but parts of the population affected by it most.

gas and groceries and supplies. these are inflation issues. they are more than just transitory. they are getting people when they are least able to withstand the impact. we will take a closer look at this issue and some of the issues of growing inequality in our economy. and how some of the financial crises and the solutions to the financial crises exasperates wealth cap. there was an interesting report out the san francisco president mary daly going back to 1990 to see what it tells us about inequality. they were able to pin a number on it. caroline a survivor joins us now, bloomberg economic reporter. what were they able to quantify? >> $23 trillion, which obviously is a huge number, about the size of the u.s. economy every year.

caroline: $23 trillion -- we are shocked and horrified. we've seen citigroup put out a number from a trillion dollars. putting a number on what inequality cost -- can you give us an inside track of what they are adding up here is proof why it is costing the u.s. economy so much to eat the people behind? catarina: they are looking at a little bit of a wider timeframe than the citi study. this is since 1990, so the past 30 years. they are looking at a variety of mostly labor market indicators to see how these different disparities at up to anything from employment rates, hours worked, average hourly earnings, things like that. sonali: we see the fed stepping in the first time in such a big way to look at how they can make an impact your.

are there real moves being taken to close this gap, and cannot happen fast enough? -- can it happen fast enough? catarina: i think that is the big question coming out of this crisis, this pandemic crisis. we have heard fed official talk a lot about how they learned a big lesson coming out of the recovery from the great recession. we saw some of these gaps -- not all, but some close significant the in ways we haven't before, especially since 2015. economy really sped up quite a bit, and that benefited a lot of people in the past five years. of course, covid put an abrupt stop to that and reversed it, too. we have heard policymakers say they want to take those lessons that they learned in the past five years and put them into the future. it remains to be seen, but we have heard the fed say that it is willing to let the economy run hot. we'll see. romaine: we'll see whether they

are willing to stick with that. you mentioned mary daly. want to give just due to some of the other authors -- shelley buckman at sanford and laura choi at the san francisco fed, louis siegelman at boston university. catarina, i am curious about the broadening nature of this paper, because when you look at some of the inequality issues before and you look at them in the context of trying to put empirical data on it, we looked at it as to what is happening within our borders between the united states. this paper seems to go after the idea that what is happening with regards to inequality is putting the u.s. at a competitive disadvantage versus the rest of the world. i wonder if you could expend what they were trying to explain that point. catarina: absolutely. one of the big problems with the economy is the impact they have on how much we can put out. if we have fewer workers working

in economy every day, and the u.s. among rich countries is the employment rates, if we hadest fewer workers producing, that is a small economy. it puts us at a huge disadvantage compared to other countries. this is looking at other rich countries. caroline: nothing gets people going more than competitive edge, and you need more people in the labor force to do that. catarina saraiva, great to get your breakdown on that report. we are continuing the conversation focusing on worsening racial wealth gaps in united states with mehrsa baradaran, uc-irvine law professor. this is bloomberg. ♪

caroline: more than a year ago, in the wake of the police killing of george floyd in the united states, much of corporate america and waltzed right pledged to do -- and wall street pledged to do more to combat systemic racism, writing checks, giving money to hbcu's. a year after that promise, they're talking less and less. is that the case, romaine? romaine: it's interesting can we track what goes on with the conference calls and the word count and how many times they mention it, and you can see the drop off. the peak was post-george floyd protests and someone around the actual case itself. we saw that spike and everyone

was talking about it, and as anticipated, that dropped off. companies have been distracted by other things and found other things to talk about. sonali: that is certainly true in a lot of cases, and there is a lot of question about whether the money that is going philanthropic efforts matched how much money is being put towards putting businesses in lower-income and more diverse neighborhoods. romaine: back then, we spent a lot of time talking about inequalities and other issues that arose during the protests, and one of the people we had on back then was mehrsa baradaran, university of california-irvine professor of law, and we are pleased to welcome her back to the program. it has been too long. we are talking about how corporations responded to the george floyd protests, and i should point out the protests against the killing and systemic issues that led to the killing. we also have to point out, too,

that a lot of the issues we are dealing with are not necessarily for corporations to solve. when we talk about inequalities, systemic or not, who deserves to have that placed on the shoulders? who is the one that will help us finally narrow some of these issues? mehrsa: yeah, you know, i will quote the current commissioner of the report released in 1968, one of the first analyses of what caused the systemic analyses, and the report can which convened hundreds of sociologists and economists to study, among other things, racial wealth gap, was that white society created, white society condones it, the white suburbs are a problem that is implicated n inequality. it was allstate policy and creation of -- all state policy and gratian of race-based mortgages and neighborhoods to the new deal, but pre-existing the new deal. you have to start with america's

original sin of slavery, and then move forward and see how that economic wealth and inequality builds as the mythology of racism embeds almost every economic structure. i think we are all implicated including corporations. you saw the urgency lead to the response, because it doesn't affect a lot of people personally, they tend to forget about it as time goes by. and the people who are affected are, i imagine, feeling very betrayed by all of these promises that were not met. caroline: that is white -- why here at bloomberg, when we see that disparity, black funny claimant --black on employment picking up again, you gotta keep reiterating it . you gave evidence at the joint

economic committee hearing on the racial wealth cap. the government was playing interest. are they responding? is what you are seeing from the administration level going to have a real impact on trying to shrink inequality? mehrsa: you know, i am a natural skeptic, but i think -- i have seen more attention an actual policy being paid now than ever, and that is the result of a lot of activism on the ground from a lot of sources, and corporations really bringing attention to realizing a solid, consistent attention -- netflix, for example, has been consistently onboard, and there are activist pockets in other places that have also been within the corporate sector focused on these issues as a corporate matter and social responsibility. i think that that and groups of activists have led the administration to think about it

holistically, but as you know, there are so many different problems. there are middle eastern crises, covid response, the general economic stuff. racial inequality tend to sometimes take the back burner. i made the case in my work that it is integral to the entire economy, and it is a drag on all of us. sonali: i want to talk about access to the economy. as caroline mentioned, the black unemployment rate rose recently, and you look at the financial services industry, there are all of these commitments, fine, but bank branches have closed which really hurts people getting to a bank for the small business on average how do you forget that there was more harm done past year ---figure that there is more harm done in the past year or more progress? mehrsa: that is really important question. one truth that runs through his trees that when there is a crisis, the people on the --

throughout history is that when there is a crisis, the people on the bottom get hit hardest. when wall street gets a call, harlem gets pneumonia. the communities getting hit more acutely by this crisis i think you saw that a little bit in the response with the ppp loans going to larger businesses. i think that that is still the case, and i think that the trend towards bank mergers has not abated, and that will always hurt communities of color, and this is a longer conversation -- the bank access composition has been a long-standing what. romaine: that's good on that road. you a couple of books on that-- you wrote a couple of books on that. when you look at the consolidation and the banking industry, and more important over the last couple of years, the proliferation of alternative banking methods, the decentralized finance, which a lot of black people and minorities have gravitated to because at least the mantra is

that somehow this gives them access to something that they never had before, is that going to be conducive to closing the wealth gap? mehrsa: i understand the desire to opt out of the mainstream thinking come out of frustration, protest. i understand that a lot of -- it is younger people feel like the system doesn't serve them, creating an alternative path. the federal reserve is -- it creates money. a lot of wealth comes through access to the main stream financial system. you are starting to see the crypto industry try to plug into that as they try to gain legitimacy. i think that is the ultimate goal to everyone, and how we do it is up for grabs.

we have the technology already to provide access to the most struggling communities like the stimulus checks that went out, ppp loans. a lot of it was getting the funds to people and fixing the payment system to get there. caroline: are you inherently optimistic on this? i don't know if we have rewritten the view of the u.s. population and the social security net side particularly. have we come to a cultural change where we understand that is necessary or should be necessary? mehrsa: studying history, i think policy leads to cultural change in ideology. to wait for people to not have racial animosity or racism is a little bit -- i'm not optimistic about that. but i am optimistic -- you saw this in the new deal when his commission against italians and irish, once they were --

discrimination against italians and irish and once they were able to get a mortgage in levittown, those discriminations went away. i think the black-and-white disparity in america is central to our concept of race and infecting almost every aspect of our society in negative ways. that is going to be harder and more stubborn to fix. any agenda towards fixing the racial wealth gap will get us there changing hearts and minds. it will take a lot of work. sonali: as far as fixing the issue goes, talking to congress, what you are hearing was recently, you noted the public policy issues and the preparation. if you talk about the dialogue the next couple of weeks and months when it comes to the biden administration, what would you like to see? mehrsa: what has been amazing to view from where i sit is how many scholars and thinkers and

young minds have been thinking about this issue. that is what makes me optimistic. it is not a one fixed for all things. the way that racism was embedded in the economy was vast and complex, and within every organization. every organization fundamentally knows the problem in the industry and i expect the federal government and joe biden says that fixing racial inequalities the business of government, i just one institution. -- not just one institution. i hope every agency and corporation looks in their own backyard, so to speak, to fix the pipeline problem, the hiring , the legacy preferences the people give to certain firms and people work with and are comfortable with. in looking at the way that the funds benefit certain communities and not others, schools, colleges, this has got to take across-the-board

efforts, and i'm seeing a lot of great research. romaine: great insight can always good to catch up with you. one of those part of this whole group of new mines out there, mehrsa baradaran, professor of law at the university of california, irvine. she wrote a great book a couple years ago called "the color of money," adding to a lot of empirical data about the inequality issues we face and how to solve them. we will focus a little bit more on the topic and the education side of it. we will talk about why more workers of color are being left behind regardless of their education level, according to michael collins, vice president of jobs for the future. he will be joining us next. this is bloomberg. ♪

♪ caroline: today we are focused on inequality, and we are going

to be looking at whether you can blame it on education or not. we want to welcome vice president of jobs for the future, michael collins. employment inequality remains an issue. you are looking at an initiative directly addressing the ways in which put secondary education and training can help those vulnerable parts of society from an economic perspective. you draw a line too, for example, in new york, black bachelor's degree holders earn on average $22,000 less than their white peers. why, michael? is it bias vacant consciously or unconsciously -- baked in unconsciously or consciously? michael: thanks for having me. there are many things intersecting. we looked across the country at education training and its ability to help people advance in the economy. we saw some data that was

startling, and frankly, uncomfortable. it turns out that all levels of education, black completers earn s less than their white counterparts. and this is complicated -- there are many reasons for it, but one of the things that is really important to understand is that education and educational attainment, it matters. it absolutely increases probability of employment for black learners and workers, and it increases probability of advancing in a salary. but the key is not in comparison to similarly situated, similarly educated whites. some of that has to do with bias in the labor market, boa in -- bias in hiring. there are other challenges in that black completers are completing decrees that are not associated with high-wage --

sonali: michael, that is what i was going to ask you about. how much of the issue is with the educational programs and opportunities themselves, the idea of the ivy leagues needing to get up to par at a greater scale, and how much of the issue is with employers? michael: it's a great question. to be clear, part of the challenges that there is hugely different axes to different types of institutions. you talk about the iv league, black learners who end up at the ivy leagues end up doing incredibly well. the challenge is that many black earners are concentrated in open-access institutions that have less resources, less completion rates, and they are not associated, as closely associated, with higher wages. the employer piece is really important.

there are multiple studies that document bias in hiring. you think about resume studies that look at identical resumes with affixed to them white-sounding names and black-sounding names, and the black-sounding names with identical qualifications received call backs less than half of the time. there is pity pervasive discrimination documented in the labor market. employers have to do their part, too. earlier in this segment there was talk about employer commitment, and it is great to see companies attacking racial discrimination, but there is a lot that still needs to happen, and we still have a ways to go. romaine: michael, i wish we had more time. we will have you back soon. michael collins, vice president of jobs for the future. insightful commentary here, and more portly, insightful data.

the conversation with michael, catarina, mehrsa baradaran, it will not be one easy fix. caroline: no, and the administration apparently making strides, but still more to do. sonali: "bloomberg technology" is up next. ♪

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>> from the heart of where innovation, money, and power collide, silicon valley and beyond, this is bloomberg technology with emily chang. emily: this is bloomberg technology. coming up, walmart roped into a crypto halt. everly's claims they will start accepting crypto currency litecoin as a form of