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The Past Isn't Past: The Economic Case for Reparations

Hundreds of years of slavery and the American-style apartheid known as Jim Crow continue to hurt the economic prospects of African-American babies born today.
 
 
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“The past is in the past; it’s time to move on.”

That’s a common response to Ta-Nehisi Coates’ eloquent essay in The Atlantic, “ The Case for Reparations,” and his  recent discussion with Bill Moyers.

But that sentiment betrays a fundamental lack of understanding of how the legacy of hundreds of years of slavery and the American-style apartheid known as Jim Crow continue to hurt the economic prospects of African-American babies born today.

“The average black family has about one-tenth of the wealth of the typical white family — that’s ten cents on the dollar,” says NYU sociologist Dalton Conley, author of  Being Black, Living in the Red: Race, Wealth and Social Class in America. “Income doesn’t explain the gap,” he adds. “African-Americans make about 77 cents on the white dollar, on average — the gap in income is much smaller than the gap in net worth.”

Even poor white households — those hovering around the poverty line — have $10,000 or $15,000 in accumulated wealth, according to Conley. But “the typical black family at that income level will have zero net worth, or even negative net worth, which means they’re paying interest on top of all their other bills.”

Conley studied how differences in household wealth impact the next generation’s economic prospects. While much of the discussion of black outcomes has centered around family structure, Conley’s research shows that only two family background measures really have an impact in terms of kids’ performance in school and future placement in the job market: the parents’ levels of education and wealth. “Nothing else seems to matter,” he says.

While the rate of African-Americans who complete college has increased dramatically since the Civil Rights era, the children of whites who are of college age today are around 50 percent more likely to have parents with at least a bachelor’s degree than blacks.

This is the reality that often gets lost in our heated debate over whether America has truly moved beyond its racist past — the argument over whether or not we live today in a “post-racial society.” For most of our history, blacks have been deprived of the opportunity to build wealth — through both legal and illegal means, and often with a lot of violence. It wasn’t until the mid-1960s that African-Americans became full citizens of the United States.

“Wealth,” says Conley, “more than any other socio-economic measure picks up long-term historical legacies that are being passed on from generation to generation. Given this large wealth disparity between whites and blacks, there really is an unequal playing field.”

Wealth Matters

Having some net worth impacts families in several important ways.

Wealth provides a cushion against economic shocks. “It’s a risky economy, and everybody needs a buffer,” says Rachel Black, an expert in asset-building at the New America Foundation. “That’s especially true for those living on the financial margins, where a small dip in their income or an unexpected expense could leave them either making material sacrifices — like skipping meals — or not being able to repair the car that they need to get to work.”

About one-third of all welfare recipients are African-Americans, a fact that helps perpetuate vicious and bigoted stereotypes about blacks being lazy and “dependent.” But the reality is that hundreds of years of structural discrimination have left black families without the same cushion that even poor white households tend to have, so when things go wrong they’re less likely to be able to get by without turning to public assistance.

 
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