USA TODAY International Edition
Our View: Closing racial wealth gap would benefit all Americans
Wealth in America is undeniably divided along racial lines.
The 2019 Federal Reserve’s Survey of Consumer Finances found that white families on average are eight times wealthier than Black families. The Census Bureau reported that in 2019, Blacks made up 13.2% of the nation’s population but account for 23.8% of Americans who live in poverty. The poverty rate for non- Hispanic whites was 7.3%. And only 44% of Black families own a home, which has long been a primary means for Americans to build wealth and pass it from one generation to the next. In contrast, nearly 74% of white families are homeowners.
Also undeniable is that the wealth gap between Blacks and whites is the direct result of 246 years of slavery, the federal government’s failure to uphold promises for reparations made as slavery ended, 77 years of Jim Crow laws that subjugated and segregated Blacks from the mainstreams of education and employment, and 35 years of a federal housing policy called “redlining” that kept Blacks from obtaining mortgages in many neighborhoods, including new and growing suburbs.
And it was government, by and for the American people, that set and enforced these harshly discriminatory policies and laws. Yes, the nation has made significant and important progress toward ending overt, legal discrimination, but America still has far to go not only to foster a fully just society but also to mitigate the lasting consequences of institutionalized racism.
For the past six months, we have published a series of essays, videos and interactive graphics about reparations and the quest for racial justice. Led by Opinion project editor Eileen Rivers, the series has explored why reparations are owed and how they might work to close the nation’s racial wealth gap.
As with every issue touching on race, the idea of reparations triggers passionate debates often centered on why today’s generations should be asked to pay for historical abuses.
One answer is that tens of millions of Black Americans still suffer from the consequences of those abuses – which were ( and in some cases, still are) instituted, sanctioned and enforced by government at all levels.
Other points of contention revolve around who would be eligible for compensation and what forms restitution would take. A bill before Congress, HR 40, would establish a commission to study and help answer such questions. The panel also would consider a national apology for the barbaric institution of slavery in America.
Congress should not only authorize the commission but also instruct it to explore reparations specifically in housing, education and entrepreneurship, sectors that would help to close the wealth gap:
In housing, reparations should take the form of vouchers that would help Black residents in formerly redlined neighborhoods, where investments historically have lagged, to raise the down payment for a home. The nation also must invest more in affordable housing, and those developments need to be built not only in historically Black neighborhoods but also in wealthier suburban and urban communities that have been traditionally white enclaves. Congress also should expand data included in credit ratings to include rental histories so that more Black people, who are disproportionately renters, could qualify for loans.
On education, vouchers for Black families would provide access to highquality public and private schools that too often are out of reach because of income. School choice solutions must be accompanied by improvements for schools in lower- income neighborhoods. Low- performing schools should be supplied with federal grants to hire better teachers, upgrade buildings and lower class sizes. And low- income Black parents should receive grants to pay for school supplies.
Finally, to help build generational wealth, Congress should designate funds to help Black entrepreneurs launch and sustain businesses. The Biden administration and Congress took an important step last month in making the Minority Business Development Agency permanent.
A report last year from McKinsey & Co. concluded that “healthy Blackowned businesses could be a critical component for closing the United States’ Black- white wealth gap, which we project will cost the economy $ 1 trillion to $ 1.5 trillion ( in 2018 dollars) per year by 2028.”
That last point is critical. Addressing the lingering consequences of racism and closing the wealth gap will benefit all Americans.