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Reparations are essential to eliminating the substantial wealth gap between black and white Americans

Christian Weller
Christian Weller
Four hundred years ago, America’s first enslaved Africans arrived in Virginia.

Centuries later, black Americans have managed to accumulate some wealth, but it still pales in comparison to that of whites. This racial wealth gap is a result not only of the horrors of slavery but also policies – such as Jim Crow laws, redlining and modern-day mass incarceration – that followed.

The average white family with at least one working adult over 25 years old owned more than nine times as much total wealth as a black one in 2016.

As a scholar of wealth inequality and its causes, I believe the promise of equal opportunity for all remains unfulfilled as long as this massive gulf persists. A variety of proposals have been suggested by Democratic candidates for president and others to close this gap, such as eliminating housing discrimination and making college free for all.

Two colleagues and I created an economic simulator to model the impact of five of the most ambitious proposals. Our results show why reparations that directly target African Americans are likely the only way to eliminate it.

Why wealth matters

This wealth gap matters a lot because it means African-Americans have far fewer opportunities to get ahead and less economic security.

Wealth is what allows families to start a business, send their children to college, switch jobs when new opportunities arise, buy a house and retire comfortably. It’s also what helps people get through unexpected financial hits, such as a layoff, medical emergency or simply a leaky roof.

Although whites generally have more wealth than every other racial and ethnic group, the gap between them and African-Americans is particularly large.

For example, the average white family had US $935,584 in wealth in 2016, compared with $102,477 for blacks and $176,635 for Latino households. Importantly, this gap between African-Americans and whites persists even when we account for education. And the gap worsens with age. African-Americans are much worse prepared for retirement, for instance, than whites are.

Five proposals to reduce the gap

My colleagues Danyelle Solomon, Connor Maxwell and I put together a simulation model to examine the effectiveness of five proposals offered by Democratic candidates and progressive experts to close the racial wealth gap.

  1. The creation of “baby bonds,” which involve the government opening an interest-bearing account for every child born in the U.S. and adding new funds annually until the age of 18
  2. Elimination of housing segregation and mortgage market discrimination such as redlining
  3. Making college tuition free for everyone and eliminating existing student debt
  4. Creating universal retirement savings plans that are low cost and low risk, which would disproportionately benefit families of color
  5. Effective enforcement of consumer finance regulations to eliminate predatory interest rates and fees, and ensure equal access to affordable financial products.

We modeled how each plan would affect the earnings and savings of people starting out their careers in 2020, at age 25, until retirement 40 years later. Importantly, we used the broadest possible versions of these proposals in our model, which meant that the impact on the racial wealth gap would likely be larger than the actual plans put forth by the politicians.

Single largest effect: baby bonds

We found that baby bonds led to the single largest effect. They would close 24% of the gap by the time people retire. The other policies had much more modest effects, with effective financial regulation having the smallest impact. It would only shrink the gap by 1.5%.

Even if all five proposals were enacted next year, blacks would still possess just 52% of the wealth owned by whites by by 2060, leaving a gap of more than $1 million.

A 400-year head start

The proposals we simulated are progressive and disproportionately help African-Americans, and there are good reasons to pursue each policy to help close the black-white wealth gap.

But every one of them also offers assistance to white families, who have a 400-year head start building wealth in America. Our research suggests to eliminate the gap altogether requires pursuing policies that exclusively target African-Americans and help them build up enough wealth to match that of whites.

In other words, some form of reparations – whether in the form of lump sum transfers or creating funds that help blacks buy homes or start a business – needs to be part of the debate.

Christian Weller is a professor of public policy and public affairs at the University of Massachusetts Boston.

This article is republished from The Conversation.


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Comments (33)

  1. Submitted by Connor OKeefe on 10/07/2019 - 10:47 am.

    “We modeled how each plan would affect the earnings and savings of people starting out their careers in 2020, at age 25, until retirement 40 years later.”

    “The proposals we simulated are progressive…” You can say that again, you can also say ludicrous, bordering on pseudoscience.

    How to you model a human life? How do you account for variables such as a prison sentence, or debilitating accident or disease, or substance abuse, or fecklessness, or teenage out-of-wedlock pregnancies?

    Handing out lump sums would benefit the people least likely to need it. People that make good decisions lead more successful, productive lives; this is no secret. A cash bonus might be nice for these folks, but certainly not necessary, or justified.

    Dropping a cash pot into the lap of someone already making poor decisions that limit his or her success and prosperity will have the completely foreseeable effect of perpetrating a(nother) massive waste of tax dollars.

    Free college is also a complete waste of money. Not everyone is suited to higher education. The drop out rate is already reflective of the lower admission standards being pursued: 30% drop out after the first year, 56% drop out before 6 years. 70% of Americans will study at a 4-year college, but less than 2/3 will graduate with a degree

    Irrational unsupportable and unconstitutional agendas like these (and others) are why the Democrats are going to lose next year.

    • Submitted by Erik Granse on 10/07/2019 - 06:50 pm.

      You speak of ‘good’ and ‘poor’ decisions. Given the data presented in the article that there’s a persistent wealth gap between whites and African-Americans, it’s reasonable to assume you’re implying that African-Americans make poor decisions more frequently than whites.

      Either those ‘poor decisions’ are the result of African-Americans being incapable of making ‘good decisions’ (sure hope that isn’t your argument), or there are systemic problems which have caused them.

      The article addresses those systemic problems and poses potential solutions.

      What exactly was your point?

      • Submitted by Steve Timmer on 10/08/2019 - 09:53 am.

        Beat me to it, Erik, thanks.

      • Submitted by David Dazo on 10/08/2019 - 08:55 pm.

        His point being that a lot of people from poor neighbors can get out but choose the handout.. I am a minority from a family that immigrated here.. In just 40 years from when my grandmother got her we have become successful.. Its about your drive and decisions.. Most people from the ghetto have a fake it until you make it mentality.. I grew up in a poor predominant vlack neighborhood.. Most of my friends still live there struggling but have Jordans and fancy TV’s with and older Cadillac Escalade from Paul Blanco but live in a garbage neighborhood.. Thats not just blacks but even the whites and mexicans there.. That is a poor decision and they always say ” What we dont deserve nice things to?”.. No ome is saying that but earn them.. Work you way out then get it.. Also Slavery didnt start coming to America first.. So why don’t blacks ask South America for money since they first started buying slaves 50 to 60 years before North America did?? Is it because we freed and now are kindness is taken for a weakness?? Also if you go to the AfricaTown Museum like I have and read and listen to the transcripts from the last slaves brought here they were kidnapped by there own chief’s and warriors and SOLD to American plantation owners not kidnap so why now ask the countries in the continent of Africa to pay some money?? Again is this taking Americas kindness for Weakness again.. Also as a Mexican who is 35% yaqui Indian why dont I get money for the land they killed and took from my people?? You see how that works?? Or even better yet why can’t the world sue Spain for going around and raping andnkilling many people on many continents for 300 years during the 14th and 17th centuries?? Giving a race money is literally saying I am so weak that you were able to keep me captive so now I want money.. Thats straight truth that most people like you dont want to face..

        • Submitted by Erik Granse on 10/09/2019 - 11:25 am.

          Of course individuals can make it; no one is claiming otherwise. Your argument though, denies that there’s any systemic effect of several hundred years of subjugation and that responsibility lies solely on individuals.

          Yes, individuals have to take responsibility, but so does society.

    • Submitted by Janell Jenn on 10/08/2019 - 10:34 am.

      This is article is CONTRACTING!
      How is free education for all going to specifically help african americans recover from a gap? How is baby bonds for all going to help blacks specifically? You state we need reparations specifically for blacks but then make reparations available to ALL? This is why there is a wealth gap because the U.S government refuses to give blacks anything specific, if they give us something to help us, they make it available to everyone or ALL minorities… Asians and India Indians do almost as well as white people, Hispanics do better than blacks financially. Why not make these benefits JUST available to the people on the bottom which the government created by purposely denying us the right to wealth 100 years after slavery(Jim Crow) when we were full citizens yet still denied the right to fair employment and housing.

      • Submitted by Janell Jenn on 10/08/2019 - 10:34 am.


      • Submitted by Tom Crain on 10/12/2019 - 03:42 pm.

        Making education free for all does not lessen the value of free education for any particular group, does it?

        Making a benefit universal will make that benefit more popular, cheaper to administer, and remove stigma.

        You might have a ghost of an argument if these proposals were funded on taxes paid by the main benefactors, but they are instead mostly funded by progressive taxes.

  2. Submitted by Hiram Foster on 10/07/2019 - 01:53 pm.

    The problem isn’t any sort of wealth gap, rather the problem is that too many people don’t make enough money. The reasons why people are wealth have virtually no relationship to why people are poor.

  3. Submitted by Jon Kingstad on 10/07/2019 - 07:54 pm.

    The gross disparity in wealth and income between the top 1% and the bottom 50% is inconsistent with democracy. Which is why our government today is really a plutocracy and no longer a functioning democracy. The New York Times and the NYTimes Magazine ran a special insert a few weeks ago called the 1619 Project in which is laid forth the bare facts of how the foundation of this nation’s wealth-not just the South’s wealth-was based on slavery. That’s stolen labor of generations of men, women and children. It was enshrined in the US Constitution in several sneaky and really immoral ways. I found this report of the 1619 Project very disturbing.

    It’s especially disturbing because the legacy of slavery was never eradicated after the Civil War. After a good start with Reconstruction after the War, the North relented, withdraw the troops and let white mobs restore slavery through Jim Crow laws and a campaign of terrorism. That campaign and its legacy was quite alive during my life and it lives on today. I don’t know if reparations are any answer to the monumental injustice perpetrated against African-Americans but this article makes at least a good faith stab at recognizing and providing a practical, if politically unfeasible, remedy.

    The issue is not wealth versus money. It’s how to correct an injustice created over centuries which is manifested in the sorts of statistics presented by this author. I comment him and his colleagues for their efforts.

    • Submitted by Tom Anderson on 10/08/2019 - 09:55 pm.

      “Plutocracy or plutarchy, is a form of oligarchy and defines a society ruled or controlled by the small minority of the wealthiest citizens.”

      So, as I understand this, Warren Buffett and Bill Gates step into a voting booth and decide who is elected and what they do. The small minority enforces border laws, cages children, raises taxes on themselves, allows their children to decide what gender they identify as, runs the public schools into the ground, pollutes the earth while melting the glaciers, while at the same time controlling the media, the police, and making sure that the Yankees always win.

      Can’t say that I disagree.

  4. Submitted by joe smith on 10/08/2019 - 10:28 am.

    Fixing our public schools will fix a lot of issues that befall the poor of our country. Half of students in MPSD can’t read or do basic math. You are not employable without basic skills that public schools are not teaching! Let’s have an honest talk about how fatherless children (skin color doesn’t matter) don’t do as well as children from two parent homes. Let’s talk about why women that have children without a father in the home are eligible for more Government assistance than a two parent home. Reparations is an easy out that stirs all sorts of emotions, it is not a fix. Fixing this issue, for all poor folks, require being honest about many issues not being emotional.

    • Submitted by David Lundeen on 10/08/2019 - 12:42 pm.

      Joe, schools that are unable to functioning properly are exactly what Republicans want. All the outcomes you’ve listed are positives for the right.

    • Submitted by David Lundeen on 10/08/2019 - 12:50 pm.

      Additionally, your comments about reading and math scores are always reserved for Minneapolis and St Paul. Many other districts outside the urban core have similar statistics. I suggest you mention those as well, otherwise your implicit bias is, at least, slightly more obfuscated.

      • Submitted by joe smith on 10/08/2019 - 03:04 pm.

        David , is the Teachers Union pro GOP now? Are they getting their marching orders from conservatives? Our schools have been in steady decline since the Federal Government got involved in the late 70’s. Having uneducated folks helps no one or either party but the dependency on Government assistance only helps the Democrats. School choice and vouchers (fought by DFL & Teachers Union) allows parents to decide what is best for their child….. Not an unelected appointed talking head from DC.
        You were correct on one thing though, children are not being educated by public schools all over the state. Since we are talking about reparations I didn’t think that Grand Rapids failing to educate their kids was applicable. Are we giving reparations to everyone who is not prepared for the workforce now? If so I will bring up Hibbing/Virginia/Eveleth more often. The other reason I bring up MPSD is that students there get more money per student than any other district. The next step in the education debate is always more money. That disproves the notion.

        • Submitted by Brian Nelson on 10/08/2019 - 04:19 pm.

          Joe, on average how much should it cost to properly educate students based on your expertise in this matter? Additionally, will vouchers gaurantee that IDEA rights are preserved for students with SpEd needs? And what is the correct amount of money needed to adequately meets the needs and rights of SpEd students?

          • Submitted by joe smith on 10/08/2019 - 04:54 pm.

            Evidently cost has no impact on success, 20k+ gets you a bad public education, 10k is average per student in USA and you get a bad public education and 5k is low end per student and you get a bad public education. No competition, except private schools which do much better than public schools, no vouchers, no choice for parents and an agenda that is more concerned on what the kids learn versus how to learn.
            The results speak for themselves,, money doesn’t matter competition and agenda do!
            Special needs students are in a different category. There are so many different levels of students with disabilities that cost varies. We are talking students that are considered mainstream. All mainstream children can learn to read and do math, why do we have so many going to 13 years of public schools and learning neither?

            • Submitted by Brian Nelson on 10/08/2019 - 08:34 pm.

              Joe, you did not really answer the question. You also moved the goal posts. We are not just talking about RegEd kids. Minnesota provides SpEd services to about 20% of students. In Minneapolis, 54% of African-American students receive SpEd services. Again, vouchers won’t serve those kids. Private schools can pick and choose who they want and don’t have to serve all kids. Public schools can’t dismiss them as easily as you do in your assertions.

            • Submitted by David Lundeen on 10/08/2019 - 08:54 pm.

              It’s still cheaper than dropping a bomb in a foreign country for an unwinnable war. Those are the kind of costs you should be more outraged by.

        • Submitted by David Lundeen on 10/08/2019 - 08:53 pm.

          Thanks for proving my point. Vast majorities of students are going through our educational system without the skills needed for today whether those are vocational, technical or post-secondary. These kids are then forced to work low income jobs, which don’t pay congruently to the value they create, and then subsist on SNAP and other programs. That is a success according to Republicans, as places like Walmart don’t have to raise wages.

          For an economy to work, people must have the right to turn down a job. Otherwise, desperate people take jobs they wouldn’t otherwise. And, since you mentioned the 1970’s, it’s interesting how that correlates with the ride of neoliberal policies adopted by the government.

          • Submitted by joe smith on 10/10/2019 - 10:22 am.

            David, are you saying the GOP influences the Teachers Union and the agenda in k-12 more than Democrats? Please show this to me, I would love to read about it.

            • Submitted by David Lundeen on 10/10/2019 - 10:27 am.

              Their influence is felt by the degradation of unions over the past 50 years so that they implement policies to benefit a narrow constituency. Their argument is solely based on ineffective, bloated unions which are more concerned with keeping their benefits than teaching children. This is a gross depiction, and our problems in education are much systematic.

              • Submitted by joe smith on 10/10/2019 - 11:30 am.

                So your saying the Republicans are ruining the Teachers Union and that is leading to poor results in our public schools? So if the Teachers Union was stronger our students would do better? Give me the correlation between a stronger Teachers Union and better results please.

  5. Submitted by Paul Udstrand on 10/09/2019 - 08:54 am.

    Well, this is why we don’t let white men decide what “reparations” would look like. These aren’t “reparations”, they’re just progressive proposals that would provide universal benefits, whites would benefit just as much blacks… which means they would benefit more than blacks.

    If you want to talk about reparations you need talk about policies that specifically target blacks and their communities, which by definition means policies that and benefits NOT available to everyone else.

    • Submitted by joe smith on 10/10/2019 - 10:34 am.

      Paul, will folks who are 1/2 black and 1/2 white only get 1/2 the benefits? How about very successful blacks do they get the money also? Will folks who’s ancestors came to America after slavery be eligible? Who is going to decide these issues (certainly not white people) ? Who will decide how much money is enough to make up for slavery generations ago? Lots of questions that I’m interested in hearing from you about.

      • Submitted by Paul Udstrand on 10/10/2019 - 12:09 pm.


        Those are actually some very good questions, but like I pointed out, as a white guy I’m not the one to answer them. If you or anyone else here is serious about this, try to talking to blacks and native Americans who are actually advocating reparations, or at least go find some articles and books that they’ve written.

        Neither this article or the comment thread actually has anything to do with the reparation discussion. This whole discussion is actually just an expression of colonial mindsets that ignore the people who are supposed to be the subject of rescue.

        • Submitted by joe smith on 10/10/2019 - 12:51 pm.

          So you’re saying that the plaintiffs in the case are also the ones to award damages? That would be a very new and interesting concept never done before. The whole idea of reparations is up for discussion on merits alone then amounts and distribution is another discussion to be had. The final issue of where the money comes from, what division of our Government is willing to give up Billions of their budget? I’m sure the answer will be tax the upper 1% more.
          In summation, the whole deal of reparations is just a talking point and another way to divide Americans. Actual implementation of some form reparations is never going to happen.

          • Submitted by David Lundeen on 10/10/2019 - 04:07 pm.

            Would you consider yourself in the 1%? In all honesty, I’m simply curious?

          • Submitted by Paul Udstrand on 10/11/2019 - 09:07 am.


            Seriously, making your own statements and claiming they’re someone else’s (i.e. “so your saying…) may be a high school debate ploy but it’s not serious intellectual work. The people advocating reparations are not seeking their remedy in court, they’re not plaintiffs in any lawsuits. You’re comment is simply incoherent and your summation, whatever it may be, cannot be connected to reality.

            You guys can argue with your own imaginations all you want (that’s a common feature of white colonial mindsets) but don’t pretend your arguing about reparations. It’s clear that no attempt whatsoever has been made to comprehend the subject.

            • Submitted by Jackson Cage on 10/11/2019 - 11:11 am.

              Sorry Paul, but you avoided the question. You seem to be implying that only one group gets to make all the decisions. The majority just gets to foot the bill. SImply criticizing Joe doesn’t further the discussion.

              • Submitted by Paul Udstrand on 10/13/2019 - 08:58 am.

                Jackson, I never attempt to answer incoherent questions that have nothing to do with the subject. Just because someone makes up a question doesn’t mean anyone else is obligated to answer it. Questions revolving around imaginary “plaintiffs” in non-existent lawsuits will not elicit any “answers” from me.

                The point is if you want to know what those who are talking about reparations are talking about… you have to talk to those who are having that discussion. You can’t just make up your own conversation and pretend to be talking or arguing about reparations.

                As to whether or not those with grievances are entitled to demand remedies, this is an adult conversation, not an argument with a teen age kid.

            • Submitted by Matt Haas on 10/14/2019 - 01:52 pm.

              Just a point of curiosity, why wouldn’t you involve those who will ultimately hold the power to implement ANY reparation policy (namely US) in the discussion of what those policies will be and how they can be achieved? While I understand the impetus to allow those affected craft solutions that they desire, their lack of any sort of meaningful political and societal power both now and in the foreseeable future (the unfortunate consequence of the systemic problems you cite) means they cannot be the ones to implement any solutions themselves. Would there not be a greater chance for success if all parties necessary to achieve it have a seat at the negotiating table? Just sort of the chicken and egg problem I see with these sorts of privilege discussions, I can’t do anything to eschew the privilege I hold as a white male, why shouldn’t it be exploited to further the productive ends of those who don’t hold it, and who better to craft a policy to win over (or at the very least drag along muttering) those white folks who care not for such concepts than those of us surrounded by such our whole lives?

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