Eliminating Racial Wealth Disparity
Photo by Justin B. Cook
Descendants of enslaved Black Americans make up 12 percent of the US population and hold 2 percent of the wealth. In their book, From Here to Equality: Reparations for Black Americans in the Twenty-First Century, A. Kirsten Mullen and William Darity Jr. explain how past and present federal policies and systemic racism have created this disparity.
“White people don’t understand how White wealth has been created and how Black wealth has been repeatedly denied,” says Darity. “They don’t understand where their own family’s money has come from.”
A Q&A with A. Kirsten Mullen and William Darity Jr., PhD
Darity: We define reparations as a program of acknowledgment, redress, and closure for a grievous injustice. By acknowledgment, we mean that the responsible party admits that they have committed harm and also simultaneously declares that they will engage in an act of restitution. So it’s not just an apology but also the declaration that a form of redress will follow the apology. The second component is redress, which is the act of compensation for the injustice. The third component is closure, where the victimized community and the responsible party come to an agreement that the debt has been paid.
Darity: Usually this has taken the form of some type of monetary payment that’s made by the responsible party to the victimized community, whether we’re talking about the German reparations that were paid to victims of the Holocaust or the United States government’s payments to Japanese Americans who were subjected to unjust incarceration during World War II.
And there are instances in which the United States government has made payments to victimized communities despite the fact that the government was not the perpetrator of the harm. Here we would include the payments that were made to families that lost loved ones in the 9/11 attacks, as well as injured survivors, and payments that were made to fifty-three people who were held hostage in Iran. In the latter case, individuals were paid $10,000 per day of captivity: up to $4.4 million per individual who was taken hostage.
Mullen: We place front and center the elimination of the huge racial wealth gap. We estimate that the mean gap is about $840,000 per household. Because descendants of enslaved Black Americans constitute about 12 percent of the total population yet they possess less than 2 percent of the nation’s wealth, we think that a reparations program would at minimum bring the Black wealth position to correspond to the representation of Black Americans in the population. We estimate it would take about $12 to $14 trillion to do that.
Mullen: The racial wealth gap is a creation of the federal government. It began as the Civil War wound down. The federal government made a promise of forty-acre land grants to Black people who were newly emancipated, but it didn’t follow through on this promise. There was an initial allocation made to some families, but after Abraham Lincoln was assassinated and Andrew Johnson took over, he almost immediately began to reverse these policies.
At the same time, beginning in 1862, the federal government issued a policy called the Homestead Act. The Homestead Act provided 160-acre land grants to White Americans, including European immigrants. These were lands that were in the western part of the US, land that had just recently been occupied by Native American peoples. We’re talking about 270 million acres of land, a land mass that would be the equivalent of all of California and all of Texas. Some 1.5 million White families received those land grants. And that translated to 45 million White Americans who are today still benefiting from that single federal policy. The program was in place for almost seventy years. Folks owned this land outright, and it was tax-free. But most importantly, they could pass down the profits and the land itself to their offspring.
One of our colleagues, Jennifer Mueller, asked 150 students in one of her classes to talk to their parents and grandparents, and find out what their family’s wealth position is, and where it came from. One third of the White students in the class discovered that there was a land grant in their family. Of the remaining fifty students, twelve or thirteen of them were Black, and the others of color. Not a single one had a land grant in their family.
Darity: The Black Americans who did receive land grants did so primarily under the Southern Homestead Act, which was introduced later and lasted less than a decade. The number was relatively negligible.
Mullen: I wanted to share an example of what Mueller learned from her class. In 1880, a family received a land grant in the Texas panhandle. For two generations, the family leased out the land—when the parents died, their children divided the profits. Then, in 1980, natural gas was discovered on the land. It turned out to be the largest such deposit in that area, so large that they received $100,000 in revenue in the first year. The federal government is basically giving them a dividend check every month. And this is something that White Americans have had access to and Black Americans have not. So this is why we’re saying that the racial wealth gap was created by the federal government.
Mullen: In the nineteenth century, the way the federal government assisted White Americans in stepping into the middle class was through the acquisition of land. But in the twentieth century, it was all about home ownership. The Federal Housing Authority and the GI Bill were programs that made it possible for mostly White Americans who were coming back from the war, veterans, to readjust. And it was the first time that White Americans in large numbers were able to buy houses.
Only elites were able to purchase homes before the advent of these programs. So now you’ve got federally backed mortgages. You’ve got insurance for these home loans. They were available with zero down payment, whereas before you needed at least half the price of a house, which was beyond the means of most people. And again, you’ve got Black people being excluded. One of our colleagues, Ira Katznelson, who wrote a fabulous book called When Affirmative Action Was White, charted one year in the 1940s in Mississippi—when over 3,000 White veterans received government support for home mortgages. Only two Black vets received that government support.
Black veterans were more likely to be allowed to use their GI benefits for education than to purchase a house, but there’s a problem there, too. They could only go to colleges that would accept them. And most colleges and universities were segregated at the time. In Mississippi, where more than half the population was Black, only 15 percent of colleges and universities accepted Black students. So even if you got GI bill benefits to pay for an education, it was difficult to use them. The few historically Black schools didn’t have the capacity to handle all the Black vets. Plus, most of those had been formed as vocational schools, so they didn’t all offer the kinds of programs that many vets were looking for. Most historically Black colleges and universities didn’t have an engineering degree program. They didn’t have degrees in the kinds of technology that veterans were exposed to in the military. Once again, Black Americans were left out.
If you look more recently at COVID relief, Black businesses were largely excluded from these programs. In every instance where the federal government is the one that’s cutting the check, they’re making decisions about who’s in and who’s out. And at every step, the racial wealth gap is widening because White Americans are being invested in while Black Americans are being disinvested in.
Mullen: In the South, at least 25 percent of all White Southerners lived in a family that owned at least one slave. In Mississippi and South Carolina, the figure is 55 and 57 percent, respectively. But even if you did not live in a family that owned a Black body, you benefited from slavery. The textile industry blossomed in places like Connecticut and New Hampshire as a consequence of slave-grown cotton. At one point, New York City was considering seceding from the Union because of cotton.
Darity: The state of California has a task force for the purpose of considering reparations. There are some local communities that have considered or passed laws that they have labeled as reparations. We are not convinced that you can have an effective reparations program at either the state or municipal level. This is something that has to be conducted at the federal level for two reasons: One is because of the culpability of the federal government, whose policies created the racial wealth gap. Second, it’s impossible for states and localities to meet the requirements of a reparations bill that would eliminate the racial wealth gap. Taken collectively, the total annual budget for cities and states is $3.1 trillion. They would need to devote their entire budgets for four consecutive years to retire the debt.
Mullen: We do not support HR40, the federal legislation, in its present form. [Editor’s note: HR40 is a bill in the US House of Representatives called the Commission to Study and Develop Reparation Proposals for African-Americans Act.] HR40, which dates from 1989, has been a good placeholder for this conversation, but we’ve learned a lot about the country’s history since then. Our history was obscured by groups like the United Daughters of the Confederacy and the Daughters of the American Revolution, which commissioned textbooks that whitewashed our history. They gave us inaccurate romantic portrayals of slavery and of the Civil War. HR40 does not specify that Black American descendants of enslaved people are the eligible recipients and that payments should be made to them directly. Nor does it identify the elimination of the wealth gap as one of its primary goals. Importantly, it does not designate who the culpable party is for reparations. It doesn’t specify that the federal government will pay the debt.
Darity: We would be thrilled if individuals would write or call their municipal, state, and congressional representatives and petition them to pass a program of reparations at the national level.
And people should take advantage of the opportunity to broaden the conversation that you’re having every day. You have a lot of power. A tremendous amount of agency. And it’s a muscle that gets stronger from use. By coming into this space and saying, “There’s something wrong here.” Or “Here are the discoveries I’ve made; I want to share them with you. And because of the things I’ve learned, I’m changing the way I think about all of this.”
Find out where the wealth in your family came from. There is a widespread belief that wealth was built solely by dint of hard effort. We spoke with students at a local high school about their family stories. When they talked to their grandparents, White students were amazed at what they learned: that their families had benefited from the GI Bill or a land grant.
Mullen: Frequently, the students had no previous knowledge of these federal asset-building programs. One would think their family lore would include the telling and retelling of these stories during warm fireside gatherings with grandparents and other relatives—stories about their forebears who made the trip out west in a wagon train. They erased the federal government and the trek itself from the story.
A. Kirsten Mullen and William Darity Jr., PhD, are coauthors of From Here to Equality: Reparations for Black Americans in the Twenty-First Century, which has been awarded the 2021 Lillian Smith Book Prize and the 2021 Inaugural Book Prize from the Association of African American Life and History. Mullen is a folklorist and the founder of Artefactual, an arts-consulting practice, and Carolina Circuit Writers. She was a member of the Freelon Adjaye Bond team that was awarded the commission to design the National Museum of African American History and Culture. Darity is the Samuel DuBois Cook Professor of Public Policy, African and African American Studies, Economics, and Business and the founding director of the Samuel DuBois Cook Center on Social Equity at Duke University. He was the founding director of the Research Network on Racial and Ethnic Inequality at Duke.
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