Closing the racial income and wealth gap

The Rev. Martin Luther King Jr. speaks at the 1963 march in Washington, D.C. Curated by British author and visual historian Jordan J. Lloyd. Unsplash.

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As we celebrate the birthday of Martin Luther King Jr., let’s make sure we honor him for more than his dream of a colorblind America.

While there is great wisdom in Proverbs 29:18: “Where there is no vision, the people perish,” King and other civil rights leaders, many of them clergymen or staunch Christians, also realized that people needed to have jobs and good housing.

These leaders, known and unsung, were more than dreamers, they were pragmatic men and women who connected economics to full equality.

Keep in mind that the official name of the historic march at the National Mall in Washington, D.C., in August 1963 was “The March on Washington for Jobs and Freedom.” This showed that King and the civil rights leaders of the 1950s and 1960s knew, like W.E.B. Dubois, Booker T. Washington and other Black leaders of the past, the importance of economic empowerment.

The civil rights movement achieved significant progress in ending segregation by law in the United States. Major gains have also been made in education compared to 50 years ago when 75 percent of Black adults had not completed high school. Today, 87.9 % of African Americans age 25 and older have a high school diploma and 26% of Blacks age 25 and older had attained a bachelor’s degree in 2019, according to the US Census.  

African Americans have also made significant gains in politics from local government to the 2008 election and 2012 re-election of Barack Obama as the nation’s first Black president. In 2022, the Congressional Black Caucus swore in 58 members — its largest number in history. 

In addition to progress in education and politics, Black American culture plays a major influential role in America and throughout the world.

Yet the struggle for economic equality remains an unfinished part of the civil rights agenda.

Obama noted the importance of economics when he urged thousands gathered to mark the 50th anniversary of the March on Washington in 2013 to become modern-day marchers for economic justice and equality.

Obama called economic justice the “great unfinished business” of the March on Washington.

“The men and women who gathered 50 years ago were not there in search of some abstract idea,” Obama said. “They were there seeking jobs as well as justice. Not just the absence of oppression, but the presence of economic opportunity. For what does it profit a man, Dr. King would ask, to sit at an integrated lunch counter if he can’t afford the meal?”

Before his death, King had become increasingly outspoken on economic issues. King and the Southern Christian Leadership Conference formed the Poor People’s Campaign in 1968. They planned a multiracial march on Washington, D.C., to call for an economics bill of rights for the poor while demonstrations took place around the country.

The Poor People’s Campaign fell shortly after King was assassinated in Memphis on April 4, 1968, while helping to lead sanitation workers on strike.

While nondiscriminatory practices in the workplace and education have helped reduce racial income inequality, closing the racial wealth gap will require aggressive policy.

The racial wealth gap has barely budged in 150 years, said law professor Mehrsa Baradaran, author of “The Color of Money: Black Banks and the Racial Wealth Gap” (Belknap Press of Harvard University Press, 2017) in an interview with North Carolina Public Radio.

“In 1865 when slaves are emancipated ... freedmen and freed Blacks had about 0.5 percent of the nation’s wealth ... Today that number has barely budged. It is about 1-2 percent. So, any efforts at wealth accumulation for the Black community have been an utter failure ... There’s another economic story that once you have a racial wealth gap that is that wide, it continues to self-perpetuate without actually continuing input ... Wealth creates more wealth unto itself. And the lack of wealth, also, has this vicious cycle downwards,” said Baradaran.

Intergenerational wealth and property ownership are the main reasons for the racial wealth gap, according to economist Sandy Darity, director of the Samuel DuBois Cook Center on Social Equity at Duke University. 

“The idea that Black Americans can fix the wealth gap on their own is not only flawed, but also ignores the history of discriminatory policies that robbed Black families of their capacity to build wealth in the first place,” said Baradaran.

The issue of increasing Black wealth has to become the top of any public policy agenda since it drives so many other outcomes including levels of poverty, health disparities and crime. 

Scholars such as Baradaran and Darity say policymakers should focus on increasing Black families’ wealth through reparation programs, eliminating barriers to home ownership and increasing access to capital.

U.S. Sen. Cory Booker, (D-N.J.), “Baby Bonds” proposal offers the type of innovative solution that will be needed to close the racial wealth gap.

The proposal calls for the government to create “a trust account containing a thousand dollars for each infant. Each year, the Treasury would add as much as $2,000, depending on the child’s household income, so that by adulthood the children of the poorest families would have a nest egg of nearly $50,000. The money could be withdrawn only to buy a house or to pay for higher education or professional training. Booker estimated the cost of the proposal at $60 billion a year, and said that he planned to pay for it by, among other things, raising estate taxes back to their 2009 levels and then raising taxes on the largest inherited fortunes — those of more than $80 million dollars,” said Benjamin Wallace-Wells in the New Yorker.

Lawmakers can also reduce inequality by supporting efforts that improves economic stability including but not limited to increasing access to affordable health care, housing and targeted government investment in Black farms that have been historically excluded from agricultural programs, Black-owned businesses lacking   to capital to grow and expand. Increased and predictable increase in government funding for Historically Black College and Universities. HBCU, with limited resources, have had a disproportionate impact in creating Black teachers, doctors, lawyers and other members of the middle class.

The FIRE (Financial Independence Retire Early) movement promoted by Black millennials online and on social media should be encouraged. Increasing the financial literacy and wealth creation through investing and entrepreneurship is necessary to survive and thrive in a capitalist nation such as the United States. 

For others, the path toward economic stability will be through the workplace, especially in the highly paid professions such as medicine, law, computer science and other STEM fields as well the skill trades such as plumbing. More realistic goal would be a steady and substantial wealth creation, economic stability and the elimination of poverty.  

Black Americans must continue to obtain education and skills highly valued and paid in the workplace; and increase stock, business and home ownership as lawmakers implement public policy solutions targeted towards reducing economic inequality.

Irv Randolph is an award-winning journalist. The Randolph Report: News, Opinion and Information relevant to African Americans. Subscribe to get limited free access to newsletter and website. Never miss an update. If you like this column please share and like our Facebook page.