Closing Racial Wealth Gap Through Reparation: What It Might Cost, How It Might Work?

African-Americans and whites are economically separated by a yawning chasm, as illustrated by the racial wealth gap. The academic community, economic experts, and politicians, both black and white, have called for reparations for the suffering and abuse that Black Americans have endured for generations.

Race and Wealth Disparities in America

In the United States, blacks make up 13% of the population, yet they own only 2.5% of the nation’s wealth, according to William H. Darity, Duke University professor and co-author of “From Here to Equality: Reparations for Black Americans in the Twenty-First Century.”

In 2016, the typical white family’s net worth was $171,000, while a black family’s net worth was $17,150, according to a recent Brookings Institution report.

Do Reparations Reduce Racial Wealth Gaps?

A review of American history can help answer that question.

Following slavery, thousands of years of institutionalized discrimination and riots resulted in thousands of deaths of Black women and men. The country was also rife with lynchings, Jim Crow laws, and “sundown towns” that prohibited Blacks entirely or after nightfall.

Also, there exists racial discrimination in the housing market and in mortgage lending, as well as police killings of unarmed Black men and women.

As a result, Maya Rockeymoore Cummings, the widow of Rep. Elijah Cummings and CEO of Global Policy Solutions in Washington, D.C., said: “Reparations is a legitimate policy response.”

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Expenses Associated with Reparations

Professor Thomas Creamer, a professor of public policy at the University of Connecticut with over 20 years of experience studying reparations, estimates that slavery reparations will cost between $18 and $19 trillion.

Kristen Mullen and Darity Mullen in their book “From Here to Equality” suggest that reparations should be determined by the amount needed to eliminate wealth disparity between White and Black Americans.

To achieve that, we would need to spend $10 to $12 trillion or $200,000 to $250,000 per eligible beneficiary over the next 10 years.

Various people argue that fulfilling the American dream would require the same U.S. government responsible for denying blacks their wealth, to reunite them through reparations in the form of cash payments to their descendants in an amount that would close the wealth gap between Blacks and whites.

The California State Assembly and Durham, N.C., have approved measures to study reparations for Black Americans.

Other cities and states have passed reparations contracts, including Asheville and Buncombe County in North Carolina, Evanston in Illinois (the first to implement a reparations program after passing reparations in 2019), and Providence, RI.

Greenbelt, Md., residents recently elected to establish a pay-reparations commission.

The reparations bill, HR 40, was voted out of committee by the House Judiciary Committee in early 2021.

Originally introduced by John Conyers (D-Mich.) in 1989, that bill has been passed by 15 states.

Nearly 200 members of the House and over 20 members of the Senate are now co-sponsoring a national reparations bill.

Senators from the Republican party, however, oppose reparations.

In a nationwide poll, 62% of respondents opposed reparations for descendants of enslaved people, according to the University of Massachusetts Amherst and the WCVB.

In no case would the descendants of slaves receive direct monetary awards from the reparations programs approved around the country.

Most of these programs are suggested as yet-to-be-established benefits which would foster economic growth and business development among Blacks.

To combat health disparities and to repair years of psychological damage caused by racism and discrimination, grants and awards can also be presented to community social service organizations.

What Kind of Reparation is Necessary?

For the purpose of paying reparations, Rockeymoore Cummings recommends investing funds in individual endowments.

He also suggests implementing programs aimed at increasing homeownership among those of African descent.

He also suggests allocating accounts to Blacks that would allow direct access to the funds, among other options.

Kristen Mullen and Darity Walker support paying eligible recipients directly, though not necessarily with cash. In the form of trusts or endowments, assistance can be provided over time.

The authors, however, contend that the recipients must be the ones who control those accounts, not a third party.

One reason why trust accounts is better for this is that, people who receive a huge sum of money, such as inheritances or lottery winnings, are prone to losing it, spending it, or going bankrupt.

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What Types of Individuals are Eligible for Reparations?

There have been discussions about who would be eligible for reparations even among the leading proponents.

Some suggest reparation should only be given to those who are directly related to slavery.

Other scholars suggest examining slavery’s effects rather than just its act.

Various factors such as unequal education, redlining, police brutality, and even racial profiling have contributed to American society are advised to be used to determine separation beneficiaries.

“Reparations do not need to be just limited to the policy of reparations for slavery,” Rockeymoore Cummings asserted.

“Remember that there are people in this lifetime who were forced to go to separate and unequal schools because of Jim Crow segregation. That is just as legitimate a reason for reparative solutions as the institution of slavery itself.”

Meanwhile, Darity and Mullen think reparations benefits should be based on two different criteria.

“An individual would have to demonstrate that one ancestor was enslaved in the United States,” they suggest.

Other contentions are, if reparations are to be enacted, individuals would have to show to a study commission or reparations commission that they were black for 12 years prior to that; by declaring their race on the U.S. Census.

It is already common practice for some private organizations to identify eligible recipients by using their own records.

The descendants of 272 enslaved people who were sold off to keep Georgetown College alive two centuries ago will receive $400,000 every year.

Princeton Theological Seminary offered scholarships to descendants of enslaved Africans as part of a $28 million plan.

Mary Frances Berry, an attorney, and historian who served on the U.S. Civil Rights Commission, has a different perspective.

Berry wrote a book about Callie House, a slave who helped establish a national movement for reparations for slavery during the early 1900s.

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Then, there were chapters and members of House’s organization who paid 25 cents a year, attended meetings in churches, and petitioned courts in the U.S. for reparations.

In 1917, the US government charged House with mail fraud and sent House to prison in order to squash the movement.

“My own position is that if there are ever reparations, they should give them first to the people whose names are on those petitions,” Berry explained.

“Those people took a great risk.”

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