Beyond the upheaval of the pandemic, a racial wealth gap persists
“I want to stress this,” he added. “Without any fault on their part.”
Proposals that tackle the wealth gap head-on, however, are both costly and politically charged.
Professor Darity of Duke, co-author of “From Here to Equality: Reparations for Black Americans in the Twenty-First Century,” argued that compensating the descendants of black slaves – who helped build the wealth of the nation but who could not share it – would be the most direct and effective way to reduce the racial wealth gap.
Vice President Harris and Senators Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts and Cory Booker of New Jersey have tended to push for asset creation policies that enjoy more popular support. They offered programs to increase black home ownership, reduce student debt, supplement retirement accounts, and establish “baby bonds” with government contributions tied to family income.
With these accounts, beneficiaries could accumulate money over time that could be used to cover tuition, start a business, or help with retirement.
Several states have experimented with small-scale programs to encourage children to go to college. While these programs were not created to close the racial wealth gap, researchers have found positive side effects. In Oklahoma, child development accounts of $ 1,000 were created in 2007 for a group of newborns.
“We have very clear evidence that if we create a birth account for everyone and provide a little more resources for the people below, then all of these babies are building up assets,” said Michael Sherraden, founding director of the Center for Social Development in Washington. University of Saint-Louis, which manages the Oklahoma Experience. “Children of color are building up assets just as fast as white children.”
Without dedicated funds – the kind of programs that have enabled white families to build assets – it won’t be possible for African Americans to close the wealth gap, said Mehrsa Baradaran, a law professor at the University of California to Irvine, and the author. from “The Color of Money: Black Banks and the Racial Wealth Gap”.