A Variety of Solutions for Racial Wealth Inequity

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Here is what wealth allows you to do: People who have accumulated money, property and financial assets have a cushion in hard times. They can survive job loss, illness, natural disaster without losing their homes. They have access to good healthcare, childcare and education. They can hire a good lawyer to defend their rights. They can buy healthy food, homes in safe neighborhoods and cars in good repair.

Wealth begets more wealth.

Wealth Related Disparities:

  1. Black households hold less than seven cents on the dollar compared to white households.1 The white household living near the poverty line typically has about $18,000 in wealth, while black households in similar economic straits typically have a median wealth near zero. Duke Report on What We Got Wrong on the Wealth Gap April 2018
  2. 2016 Federal Reserve data showed net worth of a typical white family is nearly ten times greater than that of a Black family.
  3. The 2020 Regional Equity Report produced by the Tampa Bay Partnership Foundation, in collaboration with the Community Foundation of Tampa Bay and United Way Suncoast showed median wages for Black workers in Tampa Bay are 21% less than White workers; with or without a college degree, Black workers continue to earn roughly 20% less than their White counterparts; and Black residents are much less likely to own their own home (40.8%), compared to White residents (73.3%).
  4. Black, American Indian, and Alaska Native (AI/AN) women are two to three times more likely to die from pregnancy-related causes than white women 
  5. African Americans have more than twice the infant mortality rate as non-Hispanic whites.
  6. African American infants are almost 4 times as likely to die from complications related to low birthweight as compared to non-Hispanic white infants.
  7. African Americans had over twice the sudden infant death syndrome mortality rate as non-Hispanic whites, in 2017.
  8. Children of color comprise the majority of those who have died of Covid 19.
  9. At every level of educational attainment, the median wealth among black families is substantially lower than white families. White households with a bachelor’s degree or post-graduate education (such as with a Ph.D., MD, and JD) are more than three times as wealthy as black households with the same degree attainment.
  10. Moreover, on average, a black household with a college-educated head has less wealth than a white family whose head did not even obtain a high school diploma
  11. According to the U.S. Bureau of Justice Statistics (BJS) in 2018 Black males accounted for 34% of the total male prison population, white males 29%, and Hispanic males 24%.
  12. In 2013, by age 18, 30% of Black males, who make up 12% of the general population, have been arrested. By age 23, 49% of Black males have been arrested.  

You are hearing and reading these days about reparations to address the racial wealth inequity of Black Americans. Reparations include a portfolio of solutions on the community and governmental levels.

I’ll begin at the community level with Community Wealth Building that addresses racial wealth inequity.

Community Wealth Building

African American co-operative movement began with Mutual Aid Societies that provided a form of insurance to members like money for burials, for medical costs and to support widows and orphans. They grew and morphed into the African American Cooperative Movement centered on cooperatives that were consumer owned, producer owned and worker owned. 

The commercial sized worker owned cooperatives in Cleveland known as Evergreen Coops is an example of the worker owned cooperatives and are the national model in the U.S. Evergreen is composed of 3 commercial sized worker owned cooperatives: commercial laundry, alternative energy construction and green grocer. All are financially sustainable.

Evergreen Cooperatives are Coops are based in Greater University Circle in Cleveland surrounded by low income and struggling neighborhoods; started by hiring felons; captured purchasing power of anchor institutions like University Hospital, Case Western University, Cleveland Clinic and Cultural Arts Institutions that prior were putting billions of dollars into services and commodities outside the community

Benefits: Share in profits, education and medical benefits, low cost home and car ownership. 10% into incubator fund for more coops and 3% of profits go back into the community.

Rochester, NY launched Office of Community Wealth Building and a nonprofit cooperative business development corporation, OWN Rochester. Together, these organizations are working to create jobs and build wealth in low-income communities through connections to anchor institution demand.

Health Care

Healthcare Anchor Network A Community Based Approach to Healthcare Formed in February, 2019. Healthcare Anchor Network members recognize that good healthcare needs to tackle underlying economic and racial disparities. The Network is composed of over 50 health systems’ anchor institutions like insurance companies, hospitals, and universities from across the country that purchase over $50 billion annually, and have over $100 billion in investment assets.

Examples:

  1. Advocated policy makers for specific housing-related policies, like the HOME Investment Partnerships Program, a program of HUD (US Dept of Housing and Urban Development) that is seriously underfunded and  provides funds to states and localities to finance a variety of affordable housing activities: rehabilitation of owner-occupied housing; assistance to home buyers; construction of rental housing; etc.  
  2. Members of Healthcare Anchor Network (HAN) member also collaborate with private institutions including foundations and banks as was done in Utah to create the Utah Housing Preservation Fund for the purpose of  preserving subsidized and “naturally occurring” affordable housing. (residential rental properties that are affordable, but are unsubsidized by any federal program)
  3. Boston hospitals along with other Boston anchor institutions, are procuring local products from locally owned businesses. Example: CommonWealth Kitchen, a nonprofit kitchen in Dorchester, MA, is incubating more than 50 small, mostly minority-owned, and community-based food start-up businesses. It adopted a strategy to help grow the startups by connecting them to the product needs of Boston’s 20 hospitals and 31 universities, that comprise 18% of Boston’s employees.

Education & Reparations

  1. Georgetown University will raise about $400,000 a year to benefit the descendants of the 272 enslaved people who were sold to help keep the college afloat nearly two centuries ago. The university plans to support community projects such as health clinics and schools.
  2. Princeton Theological Seminary will spend $27 million on scholarships, the establishment of a Center on Black Church Studies  and other initiatives to make amends for its ties to slavery.
  3. Virginia Theological Seminary, which relied on enslaved laborers, created a $1.7 million reparations fund.
  4. The Catholic sisters of the Society of the Sacred Heart created a reparations fund to finance scholarships for African-Americans in Grand Coteau, La., where the nuns had owned about 150 black people.
  5. Critics of scholarship plans say: “You’re taking a percentage of your own funds and then designating that for scholarship assistance, to be paid to your own institution.”

Criminal Justice:

  1. Public Interest and Civil Rights Attorney Steve Hanlon won case in Missouri that was challenged and won in the State Supreme Court that gave the Office of Public Defenders in the State (over 300 of them) the right to refuse cases referred by judges if they cannot competently handle the cases. 
  2. He won after intensive statistical evaluation and comparison of time spent on cases by both private attorneys and public defenders and agreement on the amount of time needed on cases to show competent representation in the courts.   
  3. Over 40% of people in jail are not a threat to public safety. So, in MO, public defenders are taking high felony cases and others are referred for community service, social services or restorative justice program.
  4. Steve has worked with Kamala Harris on national bill for Equal Defense, which will allot over $1B to states that can prove like Steve did with the statistical analysis in MO that public defenders are not providing competent service due to workloads. The money goes into alternative programs. https://undauntedchangemakers.org/post-covid-19-video-interviews/

Reparations on the Government Level:

City:

  1. In 2015, Chicago created a $5.5 million reparations fund, as well as a memorial, free college tuition and employment assistance for Black Americans tortured by police.
  2. Council members in Ashville, NC approved reparations for its Black citizens. The resolution makes investments in areas where Black citizens face disparities, such as increasing minority home ownership, closing gaps in health care, etc.
  3. The City of Evanston, IL created a Reparations Fund for a total of $10M to be awarded over ten years. utilizing tax revenue collected from sales of recreational cannabis. They support initiatives related to workforce development, entrepreneurship, homeownership, education and infrastructure. 

State

  1. California: Lawmakers set up a task force to study and make recommendations for reparations to African-Americans, particularly the descendants of slaves.
  2. Texas, Vermont, Pennsylvania and New York are also considering legislation that says that reparations could take the form of cash, housing assistance, lower tuition, forgiving student loans, job training or community investments.
  3. New Jersey: Governor Philip Murphy has proposed to create a baby bond program. The NJ program would create a $1,000 savings account for each child born into a New Jersey household with an annual income below about $131,000.  Funds would be held in trust until child is 18 and they could be put toward school tuition, a down payment on house or starting a business. This could be blueprint for Federal government plan for Baby Bonds as bigger bucks would be needed to fund even a community college in NJ.

National: 

  1. Texas Representative  Sheila Jackson Lee sponsored a bill with 143 co-sponsors in the House known as H.R. 40 to establish the Commission to Study and Develop Reparation Proposals for African-Americans Act.  The Congressional Black Caucus met on it within last two months.
  2. Senate Bill 1083 on reparations was introduced in 2019 by U.S. Senator Cory Booker (D-NJ). It is the only reparations bill ever to be introduced in the post-Reconstruction U.S. Senate.
  3. Baby Bonds: Economists William Darity and Darrick Hamilton proposed every newborn a savings account seeded with $1,000 with an additional annual deposit of up to $2,000 depending on family income calling it the Homestead Act for the modern era providing everyone with some means to pursue and education, buy a home or start business.  Senator Cory Booker has introduced legislation in the Senate to fund baby bonds through a modest increase in inheritance taxation.
  4. According to one study, it can decrease the Black-White wealth disparity by more than 10 times. It is also much cheaper than reparations. Every year, about 4 million children are born. If every account was seeded by about $25,000, the program could cost the government about $100 billion. “One hundred billion is about 2 percent of federal expenditures now. It is much less than we spend with our tax policy on subsidizing the assets of the wealthy,” says economist Darrick Hamilton. “We spend about $500 billion on reductions in capital gains and mortgage interest reductions. So if one were to think about the cost of baby bonds, the scale of other asset expenditures, it pales in comparison.” 
Additional Proposals:

Duke University economist and professor William Darity, Jr. in his book From Here to Equality: Reparations for Black Americans, which is co-authored by Kirsten Mullen, says “reparations should have education and entrepreneurial activity but “the preponderance” of funds must go to individual recipients. And they must go in such a way that we in fact eliminate the racial wealth gap”.

They offer in their book various plans for reparations based on the unfulfilled promise following the Civil War by General Sherman’s Field Order 12, which promised 40 acres to families of freed slaves confiscated plantation land. Estimates for reparations based on the value of 40 acres in 1865 and different percentages of interest accrued over the years since range from $168B to $12.6T.   

The co-authors envision a ‘‘portfolio’’ of reparations that include direct payments and funding for other activities.  For instance, they suggest reparations also could take the form of ‘‘establishment of a trust fund to which eligible blacks could apply for grants for various asset-building projects, including homeownership, additional education, or start-up funds for self-employment,’’ or even vouchers for the purchase of financial assets. In addition, there would be funding for Historic Black Colleges and Universities and museums; and for curricula for K-12 that includes history of the Civil War and its aftermath that offers a version different from that found in many text books that began with the Daughters of the American Revolution and Daughters of the Confederacy’ s concerted efforts to revise history following the Civil War.

Education is needed about reparations and it is heartening to me to see the conversation happening about them and the actual initiatives taking place locally, and by governments.

 Zoom interviews with co-authors William Darity, Jr. and Kirsten Mullen https://undauntedchangemakers.org/post-covid-19-video-interviews/  .