For many Americans, the country’s 241st birthday last week was an unqualified cause for celebration. For many other Americans, however, this Fourth of July was a reminder that United States policy has yet to live up to the Declaration of Independence’s aspirational language. When the words “life, liberty, and the pursuit of happiness” were written, in fact, many groups of people were excluded—including enslaved black Americans.
It required our bloodiest war to banish slavery. And while we elected our first black president in 2008, and while today’s Congress, though still overwhelmingly white, is more diverse than it’s ever been, racism persists in all our institutions. A multitude of structural barriers block pathways to economic opportunity across generations of black families, imperil many black Americans’ physical safety, and diminish investment in black communities and businesses.
Stubborn racial disparities jump out of the data. The unemployment rate for black workers has averaged about twice the unemployment rate for white workers for as long as we’ve been tracking it. Median income for black households has remained at about 60 percent of median income for white households since the late 1960s (and wage gaps are particularly wide for black women). When it comes to wealth, the difference is even larger and has grown in recent years; median white net worth today is about 13 times as high as median black wealth. Middle-class black families are significantly more likely than middle-class white families to live in high-poverty neighborhoods that suffer from a lack of investment in public goods.
Differences in educational attainment explain only a small fraction of the gaps noted above, but they’re also significant. While test-score gaps by race have declined in recent decades and the gap in high school completion by race has almost disappeared, black students are still much less likely than their white peers to both enroll in and complete college. Our criminal justice system, including policing practices, disproportionately oppresses black Americans: Despite being no more likely than people of other races to use or sell drugs, for example, black Americans are arrested for marijuana possession at almost four times the rates of white Americans. Less than 15 percent of the American population is black, but in American prisons, black people comprise just under 40 percent of the population.
A black child born into the bottom two-fifths of the income scale is more likely than not to end up in the bottom 20 percent as an adult; similarly, 56 percent of black children born into the middle quintile end up in the bottom 40 percent when they’re older, compared with only 34 percent of middle-quintile white children.
Policies that explicitly target some of these obstacles facing black Americans, like criminal justice reforms and the restoration of voting rights, are a key part of the racial justice agenda. Proposals to help low- and middle-income people across the board are also an important way to push back on these inequalities; since black Americans suffer disproportionate economic hardship, they are disproportionately helped by policies that improve economic security. We’ve written about many such proposals on these pages. Raising the minimum wage to $15 by 2024, for instance, would be expected to give 40 percent of black workers a raise. Expansions of safety net programs like SNAP (food stamps), Medicaid, and the Earned Income Tax Credit, which carry long-term benefits for children in the families that receive them, would help millions of black Americans as well. Bold ideas like a federal job guarantee and Medicare for All would, if enacted and realized, substantially reduce disparities in unemployment and health outcomes by guaranteeing that every American had access to a job and health care.
Maintaining full employment conditions in the labor market is also essential for working-age black families. New research from the Federal Reserve underscores both that periods of high unemployment are particularly damaging for black employment and that persistently tight labor markets disproportionately raise black wages, employment, and incomes. In a forthcoming paper with Keith Bentele, we show that the real annual earnings of low-income, working-age black households doubled between 1994 and 2000, from about $4,600 in 1994 to about $9,600 in 2000 (2015 dollars). We estimate that two-thirds of that total earnings growth can be attributed to the tight labor market, which helped connect previously jobless or underemployed people with more work opportunities.
These findings suggest that the Federal Reserve plays a key role in shaping the condition of black lives when it decides whether to maintain full employment. Yes, the central bank must manage its dual mandate: full employment at stable prices. But especially given the low correlation between inflation and unemployment in recent decades, the Fed would do well to consider the racial impacts of its decision-making.
Still, the fact that black Americans would benefit substantially and disproportionately from the policy reforms listed above does not make them sufficient. In a widely read article from a few years ago, Ta-Nehisi Coates made a forceful case for considering reparations—that is, some form of direct compensation to black Americans for past injustices that reverberate across centuries and remain embedded in the many institutions noted above. Both the Black Youth Project (BYP) and Movement for Black Lives have outlined reparations proposals more recently. Recognizing that more details need to be worked out and that a reparations program may well include some of the ideas mentioned above—as the BYP argues, “reparations can take many forms, including but not limited to cash payments, land, and economic development, scholarship funds, and textbooks/other educational materials”—they all recommend the passage of H.R. 40, the Commission to Study Reparation Proposals for African-Americans Act, which would set up a commission to determine the most appropriate course of action. The questions before such a commission would be complicated: How exactly does one make restitution for several hundred years of injustice? What is the appropriate scope of the injustices addressed? Don’t Native Americans have a strong claim to reparations as well? But they would also surely be answerable.
Though full democracy remains an elusive goal in America, the persistence of social movements striving to make the country better is also one of America’s enduring attributes. The best way to celebrate our nation’s birthday is to work together to bring our reality closer to the rhetoric upon which it was founded.
Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.