The new Juneteenth federal holiday celebrates the emancipation of enslaved people in our nation. That did not, however, emancipate Black people from the economic impact of their enslavement. Emancipation was followed by a failed Reconstruction, a century of Jim Crow, separate-but-(not)-equal, institutional racism and discrimination — the consequences of which continue to this day.
When it comes to compensating those who are suffering the economic consequences of slavery, many people are put off by the term “reparations.” Reparations are also thought of as a handout, which is counter to the American pick-yourself-up-by-your-bootstraps ethos.
We might better define reparations as a long-delayed investment in communities and people who were systematically denied the chance to accumulate family wealth as other Americans did. This is something that continued long after state-sanctioned slavery ended. According to the Federal Reserve’s 2019 Survey of Consumer Finances, median household wealth for Black families was $24,100 compared with $188,200 for non-Hispanic white families.
These kinds of wealth disparities are damaging to a democracy that promises its citizens equal rights and opportunities. To redress this destabilizing and destructive racial wealth gap, we must start by acknowledging that it results from, among other things, specific policies and practices that were created or sanctioned by our government.
For example, one of the key contributors to household wealth is homeownership. Long-standing practices such as redlining and mortgage discrimination by banks and real estate companies made it difficult, if not impossible, for Black people to purchase houses in neighborhoods with increasing home values, and they depressed values in redlined communities. Similarly, Black people were excluded from many post-World War II programs that contributed to a growing middle class. They were not initially eligible for GI Bill benefits and were often discouraged from using housing loans for veterans.
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There are a variety of possible ways to address the historical inequities burdening Black families in America. A guaranteed basic income — which is being piloted by Chicago and Cook County — could help families trapped in cycles of poverty to start building wealth.
Education often correlates to higher-paying jobs and higher incomes. Canceling federal student loan debt, particularly for low-income students with a large debt burden, could help Black college graduates get a better start on a wealth-building career. Similarly, expanding federal support for career and technical education would provide a pipeline to trades and technical fields that can support a middle-class life.
The best way to accumulate wealth is to start saving early, but many Black families lack the funds to get started. Federal “baby bonds” — an initial investment for newborns that compounds over time — could provide an opening stake for families without other means. The accrued benefits could be used to help pay for college, buy a home or to start a business.
Government policies are not the sole source of the racial wealth gap but can be used to shift incentives and compel institutions, both government and private, to do better. Many private companies in our country were built on slave labor or used it to gain a competitive edge. These companies and their successors have a role to play in redressing the racial wealth disparity that persists to this day.
These kinds of reparations are not a zero-sum game. Investing in Americans still suffering the economic consequences of slavery and the barriers to wealth building that followed would benefit our nation.
Just as important, these investments will enable the U.S. to correct a history of denying millions of citizens their full rights and opportunities, bringing us closer to fulfilling our promise as a nation. That’s in everyone’s best interest.
Helene Gayle is president and CEO of The Chicago Community Trust and was recently named 11th president of Spelman College. She spent 20 years at the Centers for Disease Control and Prevention, working primarily on HIV/AIDS, and at the Bill and Melinda Gates Foundation with a focus on global public health.