The Economic Impact of Oppression: How Much Wealth is Still Denied to Black Americans as a Result of Slavery?
By Geoffrey Baron, Executive Director of Reparate.org
Shortly after the Civil War, William Tecumseh Sherman met with a group of Black American pastors and came up with a plan for reparations. Based on a pay of $20 per day since the 1700s, reparations would have worked out to be roughly 40 acres and a mule (roughly $2.7 trillion in today’s dollars). This plan had the potential to guarantee wealth for future generations to come.
While the plan for reparations was ratified by President Abraham Lincoln, after his assassination, President Andrew Johnson rolled it back immediately. Distributed land to Black Americans had been seized and given to former land owners, and calculations show the value of “what is owed” to former slaves and their families is between $2.7 trillion and as high as $90 trillion. This math also depends on whether you account for the socioeconomic damage and destruction brought onto Black Americans, or the countless trauma endured from over 400 years of murder, rape and oppression.
With years of devastating effects caused before and after slavery, it’s impossible to put a price tag on just how much is owed to Black Americans impacted by slavery. However, from ending systemic racism to recognizing wealth inequality, we can begin to pay back the trillions owed to generations of Americans impacted by slavery.
Black Americans were never given the opportunity to generate or accrue generational wealth
Had former slaves been given 40 acres and a mule the world would be a different place. In addition to a lack of paid reparations, the “Freedmen’s Bureau” was established to help freed slaves adjust and progress in a white society through education and training. At its peak, however, it had just 900 employees to serve four million freed slaves. This program was also gutted by President Johnson and other vocal Southerners who saw this infringing on "State’s rights."
In short, President Johnson both rolled back the economic benefits of the freed slaves, and took away the boot straps they were expected to pull themselves up by.
To increase wealth disparities further, laws were passed making it illegal to be unemployed. Many former slaves ended up on chain gangs working back on the plantations they had been freed from.
From a lack of well overdue reparations to almost no opportunity for social growth, former slaves were left to fend for themselves with no education, in a society where they were generally looked over for even common laborer jobs. These horrible beginnings for freed slaves led to years of wealth inequality, giving generations of Black Americans little opportunities to independently accrue a substantial income.
Systemic injustices that historically kept, and continue to keep, Black Americans in poverty
Thanks to the Black Codes passed after the Civil War, Black entrepreneurs were charged $100 (roughly $2,000 in today’s dollars) to get a business license while whites were not charged.
In addition, laws made social security unattainable for the 70-80% of Black Americans in the South. Under the New Deal, Southern Democrats insisted, and succeeded, in having the laws helping impoverished Americans established by President Roosevelt be administered by individual states, which ensured Black Americans saw as little benefit from it as possible.
After returning home from fighting in WWII, Black GIs experienced continued discrimination. States and white financial institutions throughout America were left to run the veteran mortgage programs, which put over 1 million white GIs in houses and gave less than $100 to non-white GIs.
Very few Black GIs could afford college, and Southern universities flatly rejected Black applicants. Much of the massive racial wealth gap we see today ($17,150 net worth for a typical Black American family vs. $171,000 for white families as of 2016) can be directly attributed to the administration of the GI bill.
Long-established systems such as social security and welfare during President Roosevelt’s administration were meant to help struggling Americans, but left in the dust Black Americans who were still economically ravaged by the effects of slavery. These crucial economic systems that once discriminated against Black Americans caused a ripple effect that furthered wealth inequality into today’s world.
The benefit paying reparations has for the U.S. economy as a whole, not just Black Americans
In 2016, 27% of the Black population was living below the poverty line. The cruel irony is that poverty is expensive. Food stamps are not only demoralizing, they are a drain on the economy. Substance abuse goes hand in hand with poverty and all the collateral damage that comes with that, including crime. Taking millions of people out of the economy and putting them behind bars is a double whammy. Not only are we reducing our workforce, but also paying to care for the prisons and all of the logistics around that.
Instead, we need to invest in what we know increases productivity: Education, and the social programs needed to make that education a success, such as healthcare, mentoring, and so on. Not only is this good for the economy as a whole, it’s also the right thing to do.
If reparations could be made directly to organizations that have been combating the effects of slavery for years, this could potentially be a massive boon to the economy. This means less money would be needed for unproductive social programs such as rehab and policing that are merely addressing symptoms of systemic injustice. We could be flooding our work force with incredibly talented and creative workers, instead of building new prisons and inciting violence. It won’t be a quick fix, but even modest investment will begin healing and act as a stimulus.
Americans need to start paying reparations today
Nothing can truly ever pay back the systemic racial divides, or physical and mental harm done to generations of Black Americans who still suffer the numerous injustices brought on by the U.S. never paying back reparations for slavery. America can’t rewrite history, but we can certainly influence our future.
Don’t wait to stop systemic injustice, and start paying back reparations that are long overdue for millions of Americans.
Geoffrey Baron is the Executive Director of Reparate.org, a non-partisan, non-secular organization encouraging voluntary reparations for slavery.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.