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Fixing the racial wealth gap with reparations: How it would work, who would qualify, and how much it might cost

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By Rodney Brooks

This article is reprinted by permission from  . It is excerpted from the new book, “Fixing the Racial Wealth Gap: Racism & Discrimination Put Us Here, But This Is How We Can Save Future Generations,” by personal finance journalist and author  .

The racial wealth gap—in which the typical African-American household owns approximately one nickel of wealth for every dollar owned by the typical white household — illustrates the yawning chasm between the economic status of African-Americans and whites. Some scholars, economists and politicians, both Black and white, have called for reparations to be paid to Black Americans for the generations of suffering and abuse.

The size of the racial wealth gap in America

Black Americans make up 13% of the nation’s population, but their share of the nation’s wealth is only 2.5%, notes William H. Darity, professor of public policy at Duke University and co-author of “From Here to Equality: Reparations for Black Americans in the Twenty-First Century.” And a recent report by the Brookings Institution says the net worth of a typical white family was $171,000 in 2016, compared to $17,150 for a Black family.

Could reparations help fix the racial wealth gap?

To answer that, it’s first helpful to review U.S. history.

The brutal institution of slavery was followed by centuries of institutionalized discrimination and violent riots resulting in the massacres of thousands of innocent Black men and women. There were also lynchings, Jim Crow laws and “sundown towns” which banned Blacks entirely or after dusk. Then there was mortgage discrimination, unequal education in segregated schools, redlining and housing discrimination, racism and discrimination in hiring and promotions and the killing of unarmed Black men and women by police officers and renegade citizens.

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

What reparations might cost

Thomas Creamer, a professor of public policy at the University of Connecticut who has been studying reparations for two decades, put the cost of slavery reparations alone — excluding subsequent discrimination or costs of Jim Crow laws — at $18 trillion to $19 trillion, which he called a “conservative estimate.”

Darity and Kristen Mullen in their book “From Here to Equality” say the total amount of reparations should be dictated by the amount necessary to eliminate the wealth disparities between Black and white Americans. That would require an expenditure of $10 to $12 trillion, or $200,000 to $250,000 per eligible recipient over 10 years.

Also read: Nearly half of Americans say inflation has caused them ‘financial hardship’

Making the American dream an equitable reality, some say, demands the same U.S. government that denied wealth to Blacks restore that deferred wealth through reparations to their descendants in the form of individual cash payments in an amount that will close the Black/white racial wealth divide.

Reparations for Black Americans have been approved in cities and states as diverse as Asheville and Buncombe County, N.C., Evanston, Ill. (the first to implement a program after passing reparations for Black residents in 2019), and Providence, R.I. The California State Assembly and Durham, N.C., have approved measures to study reparations.

In the recent election, residents of Greenbelt, Md., voted to create a commission to study paying reparations.

And the House Judiciary Committee voted HR 40, a reparations bill, out of committee in early 2021. That bill was originally introduced by the late Rep. John Conyers (D-Mich.) in 1989. There are now nearly 200 House co-sponsors and over 20 Senate co-sponsors for a national reparations law. However, reparations are strongly opposed by Senate Republicans. And a nationwide poll from the University of Massachusetts Amherst and WCVB found that  62% of respondents opposed reparations  to descendants of enslaved people.

None of the reparations programs approved around the country would result in direct monetary awards to the descendants of slaves. Most have suggested yet-to-be determined benefits that might encourage economic growth and business development in the Black community.

Watch: How this 38-year-old made it from ‘deep poverty’ to millionaire

Other strategies include grants and awards to community social service organizations to combat health disparities and to help fix the years of psychological damage done by racism and discrimination.

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