New Racial Wealth Gap Study Is Old News
The wealth gap between Blacks and Whites has ballooned since the middle of the Reagan administration, nearly tripling between 1984 and 2009, according to a new Brandeis University study.
The study, released Wednesday, found that the median White household held a net worth of $265,000 by 2009, eight times more than the median Black household’s net worth of just $28,500.
“The gap presents an opportunity denied for many African American households and assures racial economic inequality for the next generation,” Tatjana Meschede, a co-author of the study said in a statement.
And yet, this isn’t particularly shocking. Although this study goes back to the Reagan years, this reality has been centuries in the making. The wealth disparity between Blacks and Whites was not an incidental occurrence. It has been prevalent throughout American history, carefully cultivated and nurtured; it has been overtly and covertly codified into law, policy and practice.
The forsaken 40 acres
During the final months of the Civil War, Union General William Tecumseh Sherman marched victoriously through Georgia to the sea, nearly unopposed by Confederate forces. Thousands of freed slaves (called freedmen) accompanied Sherman’s forces.
General Sherman, with the approval of the War Department, issued Special Field Order No. 15 on Jan. 16, 1865. The order stated that “the islands of Charleston south, the abandoned rice fields along the rivers for thirty miles back from the sea, and the country bordering St. Johns River, Florida are reserved and set apart for the settlement of Negroes now made free by the acts of war and the proclamation of the President of the United States.” Sherman’s order further specified freedmen would be offered assistance “to enable them to establish a peaceable agricultural settlement.”
The land was divided into 40-acre tracts and Sherman distributed land titles to the head of each family of freedmen. He also ordered animals that were no longer useful to the military (mules and horses) to be distributed to each of the households. This is the origin of the phrase 40 acres and a mule, which was promised to each freedman’s family. By the summer of 1865, 40,000 freedmen had received 400,000 acres of abandoned Confederate land.
The Freedman’s Bureau was established by Congress in March 1865 and one of its many functions was to supervise and manage all abandoned and confiscated land in the south and continue to assign tracts of land to former slaves. But the former owners of the land, who were pardoned after the war, began to pressure President Andrew Johnson. They wanted their land returned to them and were afraid that Black landowners and farmers would start to accumulate wealth and power in the South.
On Feb. 5, 1866, Congress defeated that portion of the Freedmen’s Bureau Act that gave it the authority to assign land to former slaves. Then President Johnson ordered all land titles rescinded. The freedmen were forced off the land, and it was returned to the former White plantation owners.
Over the next few years, many plans were presented to Congress and the president in an effort to secure land for freedmen. One proposal suggested transporting former slaves out west where there was plenty of free land. The Homestead Act of 1862 gave 160 acres of land to each person or family, provided they stayed and worked the land for at least five years (a sort of affirmative action program for White settlers).
President Johnson vetoed every proposal that provided land to former slaves. Under the Southern Homestead Act, freedmen could purchase land at low prices, but few had any money after years of unpaid labor on the plantations.
Compare this systemic and governmental denial of the economic and material means that would have helped to bring stability to the American Black with Lincoln’s thoughts concerning compensation for slave owners. In a letter written by President Lincoln in 1862, addressed to Senator James A. McDougal, Lincoln makes a bold suggestion: The Civil War could be ended if slave owners were compensated monetarily.
At the heart of the creation of America and its capitalist system was land ownership. Land ownership and control was the foundation upon which the whole system rested. So by keeping Blacks “landless,” it also kept them powerless and made them vulnerable to exploitation, relegating the vast majority of Blacks to a perpetual state of poverty.
The New Deal, same old results
Ira Katznelson in his book, “When Affirmative Action Was White,” addresses income and opportunity disparities during the implementation of the New Deal programs.
In it, he states that it was during the administrations of Franklin Roosevelt and Harry Truman that such great progressive policies such as Social Security, protective labor laws and the G.I. Bill were adopted. But with them came something else that was quite destructive for the nation: what he called affirmative action for Whites (this writer likes to say continued affirmative action for Whites).
Between 1945 and 1955, the federal government transferred more than $100 billion to support retirement programs and fashion opportunities for job skills, education, home-ownership and small-business formation.
Together, these domestic programs dramatically reshaped the country’s social structure by creating a modern, well-schooled, home-owning middle class. At no other time in American history had so much money and so many resources been targeted at the generation completing its education, entering the workforce and forming families.
Blacks largely were left out of all this. Southern members of Congress used occupational exclusions and took advantage of American federalism to ensure that national policies would not disturb their region’s racial status quo. Farm workers and maids, the jobs held by most Blacks in the South, were denied Social Security pensions and access to labor unions. Benefits for veterans were administered locally.
The GI Bill was adapted to Southern sentiments by accommodating itself to segregation in higher education; to the job ceilings that local officials imposed on returning Black soldiers and to a general unwillingness to offer loans to Blacks even when such loans were insured by the federal government. Of the 3,229 GI Bill-guaranteed loans for homes, businesses and farms made in 1947 in Mississippi, for example, only two were offered to Black veterans.
Another example of this racial-rigging of the system was the Agricultural Adjustment Act of 1933 that authorized the secretary of agriculture to inflate prices by reducing farm acreage.
This meant White farm owners were paid to let their land sit idle, often resulting in the eviction of sharecroppers and tenant farmers, a significant number of whom were Black. Reduced acreage particularly affected sharecroppers, whose estimated annual cash income fell from $735 in 1929 to $216 in 1933.
And the missing storyline when the formation of the American middle class is told is this: It was created, by and large, by the federal government. It can’t be denied that individual hard work was involved in this experiment, but Big Government was right there insuring that labor with housing, college and education and loans.
Black males left behind during the Clinton years
The Clinton years are continually touted as a time of great economic growth and development — and for most segments of society this was true — but Black males, especially 16- to 24-year-olds, essentially were left out of the picture.
Erik Eckholm, in an article for the New York Times titled “Plight Deepens for Black Men,” details the dilemma of Black males during the economic boom of the 1990s (a boom that Democrats continually tout):
- The share of young Black men without jobs has climbed relentlessly, with only a slight pause during the economic peak of the late 1990s. In 2000, 65 percent of Black male high school dropouts in their 20s were jobless — that is, unable to find work, not seeking it or incarcerated. By 2004, the share had grown to 72 percent, compared with 34 percent of White and 19 percent of Hispanic dropouts. Even when high school graduates were included, half of Black men in their 20s were jobless in 2004, up from 46 percent in 2000.
- Incarceration rates climbed in the 1990s and reached historic highs in the past few years. In 1995, 16 percent of Black men in their 20s who did not attend college were in jail or prison; by 2004, 21 percent were incarcerated. By their mid-30s, 6 in 10 Black men who had dropped out of school had spent time in prison.
- In the inner cities, more than half of all Black men do not finish high school.
According to data compiled by Harvard sociologist Bruce Western and University of Washington professor Becky Pettit, the shift from factory jobs caused low and low-middle income workers of all races to lose ground, but none more profoundly than Black males. By 2004, 50 percent of Black men in their 20s who lacked a college education were unemployed, as were 72 percent of all high school dropouts — these numbers are more than double the rate of White and Hispanic men.
In an excerpt from the book, “Left Behind: Less-Educated Young Black Men in the Economic Boom of the 1990s,” Ronald B. Mincy stated that despite some erosion since the 2001 recession, the urgent need for special youth-targeted programs had been undermined by reports of the gains during the 1990s, including a widely-cited study suggesting that the economic recovery would absorb less-educated young Black men — historically, the hardest-to reach-population — into the labor market.
Many observers assumed that an economic recovery would, once again, lift the fortunes of young, less-educated men (this was the Clintonian version of trickle-down economics). This, sadly, was not the case.
The actual language of the laws and policies isn’t ever racial, but because of the institutional and systemic nature of racism, they are implemented and executed along ethnic lines — to the disadvantage of people of color.
Thomas Shapiro, in “The Hidden Cost of Being African American: How Wealth Perpetuates Inequality,” presents the facts as thus:
$1.6 trillion: The estimated economic loss for African-Americans as a result of legal segregation for 1929-1969 (in 1983 dollars).
plus Several trillion dollars: The cost of discrimination from the end of slavery in 1865 to the year 1969, the end of American style apartheid, based on year-2000 dollars.
plus $94-$123 billion: The estimate of how much Black workers lose annually from continuing discrimination and informal segregation in employment.
plus $100 billion: The estimated amount that Blacks in this generation have lost in home equity as a result of the racial discrimination they confront when they attempt to secure mortgages for homes and businesses
Equals $5 to $24 trillion, the sum total of the worth of all the Black labor stolen through the means of slavery, segregation and contemporary discrimination in today’s dollars.
A great deal of the economic misfortunes of Blacks is due to the lack of a sustained and exhaustive effort in rectifying the fetters of institutional and systemic racism. Every effort throughout American history has been met with widespread resistance or experienced, as a consequence, a significant backlash by the dominant culture.
What the recent Brandeis study reveals is that the unrelenting targeted financial sabotage of a group cannot be addressed tepidly or in half-measures — the cure has to be just as aggressive as the disease.
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