Ending the racial wealth gap through reparations: Local policies or federal payments?
The first 10 years of Vivian Gibson’s childhood are marked by the memories of her home in Mill Creek Valley, a community of 20,000 Black residents that stretched from midtown St. Louis to downtown.
Gibson has written in depth about her experience there in the home she lived in with her seven siblings, parents and grandmother. But it came to an end in 1958, when the family had to move. A year later, St. Louis officials demolished the neighborhood as part of an urban renewal campaign. The effort displaced about 20,000 Black residents, including her family.
That forced move hurt many Black residents, especially those who didn’t own their homes and weren’t compensated. Some who owned property weren't able to establish generational wealth and pass it on, Gibson said.
“The whole idea is to be able to have something that you can get to your children, and that your children can build on and give to their children,” she said. “That is just a very, very difficult thing to do when you can never get started.”
Gibson is among a growing number of Black Americans who say reparations to the descendants of enslaved Africans could address the toll of slavery and the racism and discrimination that has plagued Black people for generations. It also could help redress decades of U.S. policies that prevented generations of Black families from building wealth, she said.
Data from the Federal Reserve Bank of St. Louis shows that in 2019, the median white family had about $184,000 in wealth, while the median Black family had only $23,000.
St. Louis Mayor Tishaura Jones is one of a dozen U.S. mayors who are committing to reparations to address the racial wealth gap. Through Mayors Organized for Reparations and Equity, they say cities could take a leading role in addressing the wealth gap by implementing local reparations programs.
“The monetary piece is just one piece,” Jones said. “When I talk about reparations, I talk about reparations and, because we also have to repair the racist policies that have prevented African Americans in this country from participating in the generational wealth that many of our white neighbors have been able to participate in.”
The coalition aims to use municipalities as demonstration sites that could lead to a federal reparations initiative while focusing on a specific city’s needs.
Jones said her administration is still examining how a local reparations program could work, but she said it’s important to address housing discrimination. For example, Jones points to north St. Louis, where homes are valued far less than similar properties in south St. Louis.
“Most of the wealth that we hold, as far as African Americans, is in the value of our home,” Jones said. “We still know that there are identical houses that are in the 27th Ward that are the same as the 13th Ward, yet those homes are at least 20% or more devalued than they are on the south side.”
Some cities across the country have already started equity initiatives meant to invest in Black communities. Evanston, Illinois, officials approved an initiative earlier this year to provide $400,000 in housing assistance and mortgage relief to residents living in the city between 1919 and 1969. Direct descendants of someone harmed by discriminatory housing policies also would be eligible.
But local programs could lead to a diluted federal reparations plan that wouldn’t match the necessary investments needed to close the racial wealth gap if federal leaders already see localities implementing such initiatives, said William Darity Jr., a public policy professor at Duke University.
Darity, a leading proponent of reparations, said the nation needs to eliminate the $12 trillion wealth gap between Black and white Americans through direct payments. He doesn’t consider local initiatives reparations because cities don’t have the money to eliminate the racial wealth gap.
“We estimate that this would be somewhere in the vicinity of $280,000 to $320,000 per eligible, Black American descendant of persons enslaved in the United States,” Darity said. “As soon as you make that payment, you've essentially erased the racial wealth gap.”
Darity said the best course of action is through the federal government, though he’s aware overwhelming congressional support now is unlikely. President Joe Biden is having trouble getting his economic proposals through Congress, especially in the Senate, where Democrats hold only thin majority control.
“That simply means that part of the struggle is to make sure that we have a different Congress,” Darity said. “We have to work hard towards ensuring that we get a different group of elected officials who will be predisposed towards a reparations plan.”
Darity said there is precedent for a reparations initiative. The federal government paid the families of the victims of the Sept. 11, 2001, terrorist attacks and Japanese Americans whom U.S. authorities relocated to internment camps during World War II.
Vivian Gibson is aware of these precedents too. After centuries of discrimination against Black Americans, she’s glad there is finally a national conversation about compensating the descendants of enslaved people.
“We're in an interesting time in history,” Gibson said. “People are more open to what has happened in our society, and how to repair it, or to start anew, moving forward. Reparations should be on the table.”
Jones intends to use coronavirus pandemic relief funds to help fund strategies to eliminate racial inequities.
“Obviously, St. Louis doesn't have access to that kind of money,” the mayor said. “But we have to look at not only payments, but how do we fix all of the racist policies that keep African Americans and Black and brown people in general behind.”
Follow Chad on Twitter: @iamcdavis