Earlier this year, Americans for Financial Reform and Take on Wall Street hosted a fireside chat with Jeremy Bearer-Friend, a professor at George Washington University Law School, and Alvin Velazquez, Associate General Counsel at SEIU. During the chat, Bearer-Friend explained his recently developed proposal for how to capitalize a multi-trillion dollar reparations fund in less than a year. The proposal would have publicly traded firms, many of which have been responsible for exploiting and/or continuing to exploit Black labor, pay a tax by issuing stock. Contributions in equity rather than cash would result in only charging the wealthiest individuals for reparations. Alvin Velazquez with SEIU explained how lessons learned from the labor fight with pension funds can be applied to keep the beneficiaries in the driver’s seat. Not only does this plan address the systemic racism perpetrated against Black communities, but it also helps prevent an all-out Wall Street takeover that would continue to exploit Black labor. If you only have a few minutes, check out our highlight reel here.
If you have a few more minutes, our Ericka Taylor breaks down the concept of reparations and why their time has come:
Let’s start off with what we mean by reparations. Now, in this context we’re talking about efforts to repair the harm caused by slavery and its continuing legacy. Those reparations could be in the form of money, as it was for the Japanese American victims of internment camps, as well as in the form of land, scholarships, health care, housing subsidies, and more. Reparations efforts recognize that the US became the wealthiest nation in the world as a direct consequence of using enslaved labor to dominate the textile industry, and, we must acknowledge, by dispossessing Native Americans of 1.5 billion acres of land, which isn’t part of the reparations struggle, but the land back movement. Focusing squarely on reparations now, consider that— and here I’m quoting YES magazine— “at the outbreak of the Civil War, the market value of slaves in the US exceeded that of banks, factories, and railroads combined.”
Representative Cori Bush’s reparations resolution, which I’ll elaborate on in a moment, estimates that enslaved Africans produced 222 million hours of forced labor for the United States from 1619 to 1865. That’s the rough equivalent of 97 trillion dollars worth of work. So as a consequence that uncompensated, forced labor, and systemic and subsequent systemic racism, the 0.5% of national wealth held by Black people in 1865 had not risen above 2% by 2019, according to the Brookings institution. That same year the median wealth of white families stood at $188,200 while the median wealth of Black families was a mere $24,100. What’s worse is this chasm has continued to grow. Between 1983 and 2016, adjusting for inflation, median white wealth increased by 33%, according to the Institute for Policy Studies. The median Black family in contrast saw their wealth decrease by more than half during that same period.
Now, if that data doesn’t make the need for reparations clear, consider this—the official end of slavery, except as punishment for a crime, was not the end of policies that kept Black people from accumulating wealth, or ones that extracted the wealth they managed to gain. After the Civil War, thousands of Black men were rounded up as criminals so states could lease them to farmers and private businesses to perform unpaid manual labor. Their crimes were violations of the “Black Codes”—laws passed to maintain racial hierarchy. In rural Alabama, for example, changing employers without permission, false pretense, and “selling cotton after Sunset” were all arrestable offenses by 1890.
This leasing of human beings, a form of slavery by another means, continued through the mid-20th century. It is not a stretch to think of today’s incarcerated individuals as a contemporary extension of this history, since more than half of the 1.5 million people being held in federal prisons work for a few cents per hour, often for private corporations. Freed people who were able to avoid imprisonment were often consigned to a different type of wealth extraction—sharecropping—what Ta-Nehisi Coates has described as a system of debt peonage that was implemented by “cotton kings who once their landlords, their employers, and Merchants,” and who drove Black farmers deep into debt. By 1890, 75% of Black farmers were sharecroppers.
By the early 20th century, U.S. laws hindered opportunities for Black people to create wealth on multiple fronts. Jim Crow Laws allowed for legal discrimination against Black people, including restrictions on the kind of jobs they could hold, and incomes they could make. The newly established Social Security program didn’t initially apply to agricultural and domestic workers, positions disproportionately held by Black people. So, in 1935, 65% of all Black Americans and 70-80% of Black Southerners were ineligible to receive Social Security checks. State-sponsored redlining kept Black people ineligible for home loans, and racial covenants prevented Black people from moving into white neighborhoods. Today’s Black home ownership rate of 43.4% is not only substantially lower than the white home ownership rate of 72.1%, but it’s also lower than it was 10 years ago. And these are just a few of the policies and practices that build the case for reparations.
Three years ago, Take on Wall Street developed an interactive website, IsOurEconomyFair.org, which details such wealth extraction and exclusion from colonization to the present day. It reminds us of the vast scale of the problem, and underscores that the solutions must also be expansive, thus, reparations. In 1989 Representative John Connor introduced H.R. 40—the Commission to Study and Develop Reparation Proposals for African-Americans Act. It wasn’t until April 2021, 32 years later, however, that the House Judiciary Committee finally voted to send the bill to the House floor for a vote, with 215 Congress members committing to vote in his favor. That vote, as you might imagine, never took place. Now, given that this bill has languished for decades, it’s easy to imagine that it was a wildly ambitious effort to immediately disperse sizable checks to Black Americans. In fact, H.R. 40 as its title implies, has the very modest aim of establishing a federal commission to study the impact of slavery, and recommend proposals for repairing its lingering harms.
More recently, in May of last year, Congressmember Cori Bush introduced the “Reparations Now” resolution which builds the case for why reparations are owed to Black Americans, lists various forms reparations could take, and pushes for the advancement of existing reparations bills like H.R. 40. It also identifies $14 trillion as the minimum amount required to bridge the Black/white racial wealth divide, which as I mentioned earlier, is a direct product of economic systems designed to extract wealth from Black people and redirect it to the wealthy, almost uniformly white, elite.
There has been an upside to the H.R. 40 slow progress and that’s that states and municipalities around the country have been moving forward with their own reparations efforts. The most advanced of these cases is in California, where state legislators introduced a package of 14 reparation bills in January of this year. These include a proposal to restore property taken by race-based applications of imminent domain, civil rights and education proposals, and more. Repair studies or task forces are also in development in Colorado, Massachusetts, and New York. On the municipal level, Tullahassee, Oklahoma, one of the state’s oldest Black towns, is fighting for reparations to revitalize the once booming community, which has been harmed by decades of banking discrimination, disinvestment, and the enduring legacies of slavery. Nearly a dozen mayors from Kansas City, Missouri to Asheville, North Carolina, and Providence, Rhode Island to Austin, Texas came together a few years ago to form Mayors Organized for Reparations and Equity. They hope that their progress will help demonstrate to the federal government how reparations could be set up on a national level.
The $14 trillion price tag that Representative Bush referenced is one of many figures activists have calculated, but virtually all would require an investment of trillions of dollars. That’s where Jeremy Bearer-Friend comes in. The question of how to fund reparations comes up again and again, and Professor Bearer-Friend has a novel idea to address just that issue. His proposal includes using the quick capitalization of a massive reparations fund, one that—and I’m quoting the paper now— “could successfully capitalize a multi-trillion reparations fund in less than a year.” This proposal raises questions about the governance of the fund and how the fund’s capital would be invested. Alvin Velazquez from SEIU shares how lessons from labor’s experience with pension funds can teach us about how to best set up a reparations fund so that its intended beneficiaries are in the driver’s seat, not Wall Street.
If you’re curious to watch the whole video, check it out here.
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