Political Issues

Cities Are Beginning To Approve Reparations for Black Residents—Here’s How It Works

Erin Magner

Erin MagnerJuly 22, 2020

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Graphic: Well+Good Creative

Last week, the city of Asheville, North Carolina, made history when it voted unanimously in favor of reparations for its Black residents. Essentially, the city has pledged to use tax revenue from the legal cannabis industry to compensate for the generational wealth that its Black citizens have lost due to decades of slavery and discrimination. While Asheville’s decision made global headlines and is considered radical by many, it isn’t the first city to commit to compensating Black residents for the lasting impacts of slavery. Evanston, Illinois, approved its own reparations program in November 2019—one that will direct up to $10 million in cannabis taxes to fund social programs for Black residents—and it appears as though other regions may soon be following suit on a bigger scale.

For instance, the California Assembly recently voted to establish a task force to study and advise on reparations. Maryland, New York, New Jersey, and Pennsylvania are also said to be considering reparation programs. And on the national level, a bill introduced in 1989 called HR 40 is expected to finally get a vote in Congress this year. If passed, it would create a commission that would research and develop national reparations proposals to benefit Black Americans.

Make no mistake: Reparations remain highly controversial in the United States, despite the fact that the conversation around them is intensifying. According to a recent Reuters/Ipsos poll, only about 10 percent of white Americans support reparations, while around 50 percent of Black Americans are in favor. They’re also not a new concept. Reparations were first promised to Black Americans at the end of the Civil War, when President Abraham Lincoln declared that Confederate land would be set aside for freed slaves. Unfortunately, that plan was vetoed by Lincoln’s successor, President Andrew Johnson, which set the scene for a racial wealth gap that remains today.

“From my perspective, the real starting point for the contemporary Black-white wealth gap is the failure to provide the formerly enslaved with the 40 acres [of land] that were pledged to them,” said Duke University public policy professor William A. “Sandy” Darity Jr., PhD, speaking on an episode of the university’s Ways & Means podcast. In the years that followed the Civil War, white Americans were given opportunities to build wealth via federal programs such as the Homestead Act of 1862, which awarded land grants to immigrants and landless Southerners, and the G.I. Bill, which offered low-cost home loans to veterans. While programs like these were technically open to Black Americans, they were largely excluded due to discrimination. “Whites have historically been given boosts to be on the path towards accumulation while Blacks have been deprived of those kinds of opportunities and then propelled onto a path of decumulation,” said Dr. Darity. Indeed, the Brookings Institute points out that white families today receive much larger inheritances than Black families, and that this disparity is likely to be the primary driver behind the wealth gap.

Given that Americans are waking up en masse to the impact of white supremacy on Black citizens, the renewed discussion around reparations is a timely one. “It is simply not enough to remove statues. Black people in this country are dealing with issues that are systemic in nature,” said Asheville councilman Keith Young, who co-sponsored that city’s bill. A recent study shows that it would take 11.5 typical Black U.S. households to make up the net worth of one typical white U.S. household, a gap that’s roughly the same as it was in the Civil Rights era. “No progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years,” wrote study authors and economists Moritz Kuhn, Moritz Schularick and Ulrike I. Steins. This is one reason why some scholars, politicians, and activists are calling for widespread reparations programs in America now.

What could reparations look like in practice?

There are two key models that indicate how reparations could play out across the U.S. The first is financial investment in public programs that would help Black citizens build wealth over the long term. This is the approach Evanston and Asheville have taken. In Asheville, for example, the funds will help Black residents achieve business and home ownership while investing in public safety, equitable criminal justice, health care, education, and employment. Evanston, too, is exploring ways that its reparations fund can be used to eradicate systemic inequality in the realms of home ownership, entrepreneurship, education, workforce development, and infrastructure.

Other experts are in favor of direct cash payments to Black Americans to help eliminate the racial wealth disparity in the U.S., which in 2018 was estimated to be about $352,250 per capita. This wouldn’t be unprecedented—Holocaust survivors in Germany and Japanese Americans both received monetary reparations after World War II from their respective governments, as did those whose families were affected by 9/11. Dr. Darity is creating one such reparations proposal with a team of experts. In order to be eligible, a person would have to prove that they have at least one ancestor who was a slave in the U.S. and that they’d self-identified as Black for at least 12 years prior to the implementation of the program. Dr. Darity estimates that such a program would cost the government $10 trillion to $12 trillion, while other estimates using different calculation methods range from around $14 trillion up to $6.2 quadrillion.

BET founder Robert Johnson is another vocal supporter of cash reparations for Black Americans as opposed to what he calls “more bureaucratic programs that don’t deliver and don’t perform,” as he told CNBC. “We are a society based on wealth. That’s the foundation of capitalism,” he added, noting that cash reparations would drive money back into the economy while promoting the creation of Black-owned businesses.

The main arguments against reparations

Critics of reparations often claim that such programs could foster a victim mentality among Black Americans. But this argument ignores the very real systemic obstacles and discrimination that have kept Black citizens oppressed for centuries. “What takes away self-reliance is the lack of resources that allow you to fully participate in society,” said Dr. Darity on the Ways & Means podcast. “That’s what we need to correct. When people have been subjected to harms, traumas and the like, we don’t normally say that the way in which you address that is by ignoring it. We usually insist that the perpetrators in some way attempt to make the situation right. It’s not best handled by saying, ‘Just get over it.'”

Other detractors argue that slavery ended before any of today’s Americans were born, and as such, these generations shouldn’t be held responsible for what happened nearly 200 years ago. But, again, Dr. Darity believes that this line of reasoning misses the point. “I don’t think of this as a matter of personal or individual guilt,” he said. “I think of this as a matter of national responsibility and the culpable party is the federal government.”

It may not be long before federal lawmakers start examining the nation’s historic role in the wealth gap. Democratic presidential candidate Joe Biden has said he is in favor of reparations if a feasible plan were to be developed, and that he would support further research into the matter if he’s elected in November. President Trump, on the other hand, hasn’t said much about reparations other than “I don’t see it happening.” Either way, expect to hear a lot more about reparations in the months and years to come.

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