Commentary
Biden’s “Plan” to Address the Racial Wealth Gap Won’t Cut It. Only Reparations Can Do That
The plan included steps like establishing a federal effort to address inequality in home appraisals and using government authority to boost support for Black-owned businesses, including through business grants.
OPINION
On June 1, the 100th anniversary of the Tulsa Massacre, President Joe Biden announced a plan to support Black homeownership and Black-owned businesses, which he said was aimed at closing the racial wealth gap between Black people and white people. The plan received praise from those who celebrated Biden’s apparent attempt to address the gap, which his administration has identified as a key policy goal.
The plan included steps like establishing a federal effort to address inequality in home appraisals and using government authority to boost support for Black-owned businesses, including through business grants.
These are all great steps worth taking, but we shouldn’t pretend like they will do anything to meaningfully narrow the racial wealth gap. Only reparations can do that.
According to a recent New York Times piece by Duke University economist William Darity, the wealth gap between Black and white Americans ranges from somewhere between nearly $54,700 a person and $280,300 a person.
Using the larger estimate, which Darity argues is more appropriate, the total racial wealth gap amounts to $11.2 trillion–“a figure that implies that incremental measures will not be sufficient” to close it, he wrote.
Another 2016 study from the Institute for Policy Studies and the Corporation for Enterprise Development suggests that white households are worth nearly 20 times more than Black households on average, and that it would take 228 years for Black folks to catch up. That’s assuming white people’s collective wealth doesn’t increase at all during that time.
And that was before our households and businesses took the devastating economic hit of the COVID-19 pandemic.
Addressing discrimination in homeownership and supporting Black entrepreneurship are worthwhile policy endeavors. But we should be honest about what they represent in the grand scheme of things: At best, they are marginal steps in the right direction. And that’s not going to cut it. If we are serious about addressing the racial wealth gap, then we must get serious about reparations. There’s no way around it. The numbers speak for themselves.
If our elected officials aren’t prepared to go that route, fine — but we should stop letting them pretend like they are serious about the racial wealth gap. A gap created out of centuries of stolen labor, stolen land, and stolen wealth and resources can’t be addressed by a new housing policy or small business grant program.
During the 2020 campaign, then-candidate Biden said he supported H.R. 40, a bill that would commission a congressional study on reparations to determine what that could actually look like. The House passed the bill last year. Biden should push the Senate to pass it, too–and then sign it.
And even that would only be the beginning.
