- Reparations for slavery are back in the news as a decades-old bill goes to Congress.
- Some view direct cash payments as controversial, but they are not the only way to pay for reparations.
- Experts suggest grants for home ownership, entrepreneurship, and education, as well as stock options.
- Read more stories from Personal Finance Insider.
There has been a lot of buzz about slavery reparations since the U.S. House Judiciary Committee recently voted to send the decades-old HR 40 Bill to the Commission to study and develop proposals. reparation for African Americans, to the whole House.
Bill calls for green light to form a 15-person commission to start the conversation on the “cruelty, brutality and inhumanity of slavery” and the subsequent racial and economic discrimination against African Americans that still exists , and to make recommendations to Congress on remedies.
How to repay America’s âoriginal sinâ? A cash payment to everyone involved is often presented as a solution. But it might be a tough sell in a still racially divided country, even if it wouldn’t be the first time. In the past, the federal government has paid reparations to survivors of Japanese internment and victims of the Tuskegee experiments and their families.
A 2020 episode of Gimlet’s âScience Vsâ touched on repairs. In it, producer Rose Rimler said: “Some are hoping the cash payments will be large enough to close the racial wealth gap, which currently stands at 15 cents on the dollar – in other words, for every dollar a white family has, one The black family has 15 cents. If you had deposited $ 250,000 into your account today, what would you do with it? Buy a house, start a business, pay off debts, send your money. kids in college? This amount of money is life changing, and it could propel some beneficiaries into the middle or upper class. “
Are direct cash payments the best option?
It sounds good, but the reality could be different. Social justice lawyer Mark Bello suspects that cash payments could do more harm than good. âHistory has shown that giving money to individual citizens may not have the impact you expect. Will people make wise financial decisions if they receive reparation funds?
Bello also considers the social impact of direct reparations to citizens: “Would it help Black / White relations, or would it promote racial division or cause resentment among those who are in the same situation as those who receive? repairs? We need to look at the social as well as the financial issues involved.
The truth is, there are many other ways to right wrongs that don’t require cash.
For example, earlier this year, US Senator Cory Booker and Representative Ayanna Pressley reintroduced the American Opportunity Accounts Act, a law to create a national program called “Baby Bonds.” The bill would create a federally funded savings account for every US child at birth endowed with $ 1,000 that would increase each year with additional deposits of $ 2,000 per year, depending on family income. The funds will remain in an interest-bearing account until the account holder turns 18, when it can be used for things like buying a home, paying for education or starting a business. ‘a company.
4 alternatives to direct cash payments
There are other alternatives to direct cash payments that can go a long way in paying off slavery debt as well.
Scholarships and vocational training
Bello advocates earmarking money for education (low-cost or no-cost funding or grants, low-cost daycare) and vocational training, especially technical and vocational training for well-paying blue-collar jobs. âDowntowns are slowly collapsing. A massive community infrastructure plan for our crumbling cities would create thousands of well-paying jobs,â Bello said.
The non-profit association Color Conscious provides seed money to young black businesses. Founder Michellett Whitney is all in favor of monetary reparations, but corporate grants “could give us the head start we need,” she said.
A 2021 survey found that only 55% of black Americans have stock market investments, compared to 71% of white Americans. Kyra Kyles, CEO of YR Media and former editor-in-chief of Ebony magazine, says stock option reparations are one way to help black Americans build wealth. She applauded Barbra Streisand for providing George Floyd’s 6-year-old daughter Gianna with Disney stock options.
âWhat if the large number of state-owned enterprises, which have benefited greatly from black consumption, get together and imagine a system of wealth creation in this form? The ‘how’ of allocation and distribution shouldn’t be a barrier to countries – and citizens – who innovate in systems to shrink different groups, so that the same ingenuity can be applied to uplift them, âsays Kyles. .
Home ownership and land concessions
Real estate and homeownership is definitely an area ready to be fixed. For decades, black Americans have been victims of redlining, undervaluing homes, and mortgage discrimination. The impact was deleterious.
âThe average black family has less than a tenth of the net worth of the average white family. The No.1 vehicle of wealth is home ownership,â says Eric Bailey, chairman of the consulting firm Bailey Strategic Innovation Group.
There are many ways to chart a better course. “Why not provide low cost / government subsidized grants or loans for the rehabilitation of business districts and housing, the purchase of houses or new construction in places where minorities have historically been discriminated against by the real estate, banking and property development sectors? Bello asks.
As an example of what can be done, Kyles cites the story of “Bruce’s Beach,” a prime beachfront land in Southern California, inappropriately and unfairly seized from a black family, Willa and Charles Bruce, over a century ago.
âVery recently this land was returned to their descendants and is estimated to be worth millions of dollars. Municipal governments should examine their own history and the roles they played in the divestment and remedy these actions by recognizing that The wealth generation of black Americans is much lower than that of their white counterparts and ownership is a huge part of that lopsided equation, âKyles said.
The ramifications of redlining are enormous. âLook what redlining has done to thriving black neighborhoods in Baltimore. Banks have an obligation to restore these neighborhoods. Interest-free loans, for example; the greatest proportion of money for infrastructure, etc. Says Kerry Mitchell Brown, equity strategist, cultural architect and founder of KMB, a strategic consulting firm.
She adds that more legislation like the US bailout is needed. In particular, Mitchell Brown says the $ 5 billion that will go to farmers of color, who have lost 90% of their land over the past century to systemic discrimination and a cycle of debt, will provide relief debt as well as grants, training, education. , and other forms of assistance to acquire land, is a welcome remedy.
Put simply, Bailey says HR 40 can start a much needed conversation. âRepairs are about repairing the damage. In the United States there is a reluctance to recognize the damage. What we need are real conversations. How do you repair other people’s thoughts and beliefs? have to talk until all the trauma is out. These conversations can create enough empathy to solve problems. “