What if we addressed reparations by narrowing the wealth gap?

Published 5:04 pm Wednesday, December 11, 2019


Contributing columnist

The wealth gap just may be more critical than the income gap for redressing the continuing effects of slavery and providing reparations. Outlier economist Sandy Darity, professor of public policy at Duke, has been exploring these ideas for decades, but they are just now getting the attention they deserve in the discussions of reparations.

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We can discover his explanation of what traditional economists miss by consulting his April report, published in collaboration with Darrick Hamilton, Alan Aja, and others, entitled “What We Get Wrong about Closing the Racial Wealth Gap.”

Black people constitute 13% of the nation’s population, but they hold less than 3% of its wealth. The median African-American household has consistently had 50-60% of median white family income over the last fifty years, but it holds only 5-10% of white family wealth.

To cite a specific locality, Darity finds that white households in Boston have a median worth of $247,000 in wealth. The median African-American household holds $8 in inherited or acquired wealth.  That is not a typo!

The effects of this gap are not hard to imagine. Lack of financial security for emergencies and economic downturns, lack of resources to provide payments for college tuition or a mortgage down payment, and lack of start-up capital to start a business head the list. The black population has never inherited wealth, and differences in wealth lock in systemic advantages and disadvantages.

Darity and his collaborators beg to differ with those who would attribute the wealth gap to black dysfunction — for examples, lack of educational attainment, lack of saving behavior, or failure to emulate “successful minorities.”

Black people have less wealth at every level of educational attainment. Once household income is considered, black people equal or even exceed the saving behavior of whites. More successful minorities often draw on start-up capital that African-Americans have lacked.

To what then should we attribute this yawning wealth gap? It has a history of slavery and discrimination behind it. First, there was chattel slavery (itself a system for building wealth). Then there was convict leasing, which was slavery by another name based on imprisonment for such minor “offenses” as loitering or failure to address a white person properly. There were lynchings in the thousands and plunderings during Jim Crow. (According to the Tuskegee Institute, 4,743 people were lynched between 1882 and 1968 in the U.S., including 3,446 African Americans and 1,297 whites.)

Recent history has seen the continuation of discriminatory housing practices like redlining and predatory lending. For government complicity, consider that New Deal policies restricted Social Security and the G.I. Bill mostly to whites. When the benefits were expanded, we have seen what Darity calls the “ravaging” of the welfare state by some recent administrations. We have also seen the scourge of mass incarceration of people of color that accompanied the War on Drugs and the persistence of police killings of African Americans.

Given this history, Darity and his co-authors conclude, “By most any measure — unemployment, wealth, family income — the relative economic position of black Americans hasn’t changed since the Civil War.”

It is against the backdrop of this history that the discussion of reparations should proceed.  Darity has two suggestions of policies that would help repair the wealth gap, and the benefits would not be limited to African Americans. The first would be a federal jobs guarantee. Black unemployment has long hovered at twice the rate for whites. This gap could be addressed by the availability of good jobs (with health insurance and non-poverty wages) for every American.

The second proposal is a baby bonds program. At age 18, every American would be provided with a trust fund, the level depending on one’s place on the economic ladder. The level could range from $500 to $50,000. The cost would be steep, but it would make huge inroads on the wealth gap (tied to lack of any inherited wealth). Again, the benefits would not be limited to African Americans, but they would be greatly helped.

Paying more attention to the wealth gap in considering reparations brings us up against an opinion gap on reparations. According to an October poll by the Associated Press-NORC Center for Public Affairs, only 29% of Americans say the government should pay reparations to descendants of enslaved black people. Only 15% of white Americans take this position, compared to 74% of black Americans and 44% of Hispanics. Even an apology for slavery is opposed by 64% of white Americans, but supported by 77% of blacks and 64% of Hispanics.

“It’s over with,” is a prevailing sentiment about the effects of slavery. Our Sen. Mitch McConnell has taken the cake in this regard. Rejecting any move toward reparations, he believes that we’ve been there and done that.

“We’ve tried to deal with our original sin of slavery by fighting a civil war, by passing landmark civil rights legislation. We elected an African-American president.” This consolation is offered by a political leader who has done all in his power to prevent Obama’s election and his racial justice initiatives and to reverse those steps.

In the words of Courier-Journal guest columnist Emma McElvaney Talbot, McConnell is “clueless about slavery, its impact today in the U.S.” Our flying trip through black history above and the wealth gap that Darity and others have detailed are precisely what Senator McConnell and legions of others do not get.

Despite the prevailing odds, those who are highlighting the wealth gap are doing us a favor in the continuing reparations discussions. A 2019 Metropolitan Housing Coalition housing report found that Louisville needs to convert 22,000 African American residents into homeowners to erase the racial homeowner gap.

Whether we support Darity’s policy proposals, or guaranteeing post-secondary education for all who seek it, or private and public initiatives to enable home ownership and business ownership (i.e. wealth accumulation), a focus on the wealth gap can bring major steps toward the establishment of justice and the provision of reparations for an ugly past with continuing effects.


Eric Mount is the Nelson D. and Mary McDowell Rodes Professor Emeritus of Religion at Centre College.