Editor’s Note: This is the third article in a series probing causation and correlation in the impact of racism on public policy issues, as discussed in a new book on the subject.
“Wealth is where history shows up in your wallet, where your financial freedom is determined by compounding interest on decisions made long before you were born,” writes Heather McGhee in The Sum of Us: What Racism Costs Everyone.
Decisions rooted in the history of racism created a lingering wealth gap along racial and ethnic lines, according to McGhee.
How is that “wallet” doing today? Not well, according to the 2019 Federal Reserve System’s survey of consumer finances, which shows that the typical “white family had eight times the wealth of the typical Black family and five times the wealth of the typical Hispanic family.”
The results of that survey suggest that even the Civil Rights Movement of the 1960s, at the height of desegregation, did little for distributive economic justice. In McGhee’s words, “that is why the Black-white wealth gap has been and is growing despite gains in Black education and earnings,” and she supports reparations to close that the gap.
“Just imagine the possibilities if—in addition to rebuilding the pathways for all aspirants to the American Dream—we gave millions more Black Americans the life-changing freedom that a modest amount of wealth affords,” McGhee writes.
A number of private groups have begun just that kind of imagining, according to news accounts. For example, the Society of Jesus recently announced a pledge of $100-million to descendants of slaves sold by the Jesuits in 1838 to finance the operation of Georgetown University, as well as the construction and operation of a number churches and schools. Earlier, Brown University acknowledged its historical link to slavery, for which its student body has called for reparations, and in 2019 Virginia Theological Seminary, the largest and second-oldest Episcopal seminary in the United States, created a $ 1.7 million reparations fund for descendants of the seminary’s slave laborers.
But it took nearly a hundred years to lift the veil of historical amnesia from the 1921 Greenwood Massacre in Tulsa, Oklahoma, when a white mob killed hundreds, burned more than a thousand homes, and destroyed two-dozen grocery stores, 31 restaurants, and four drugstores in what was a flourishing largely Black community. According to a state of Oklahoma commission report in 2001, property los amounted to $1.8million, $27 million in today’s dollars. (Source: Brookings Institute Brief, June 2, 2021).
What was the economic cost of that massacre? The American Journal of Economics and Sociology in 2018 proposed this answer: “If 1,200 median priced houses in Tulsa were destroyed today, the loss would be around $150 million and the additional loss of other assets, including cash, personal belongings, and commercial property might bring the total to over $200 million.”
According to Brookings researchers, the $200 million figure should be used as an estimated loss of communal wealth, which if restored in a reparations package today could “fully fund the college education of a large number of Black residents in Tulsa” or “could buy 4,187 median-priced homes today in Black–majority neighborhoods, allowing renters to become homeowners.”
Heather McGhee also imagines: “If the United States adopted policy interventions to close the racial disparities in housing, health, education, incarceration and jobs, the economy would be $8 trillion larger by 2050.” (Source: “Pathway for Economic Growth,” W.K. Kellogg Foundation; April 24, 2018).
To Be Continued