Reparations for Racism: A Social Goods Approach

Recent and ongoing incidents of blatant racism and police brutality against African Americans has reignited the discussion of reparations for the US history of slavery and racism. After 250 years of legal slavery and another 150+ years of discrimination, what could reparations even look like? Here’s a design experiment for reparations, based on topics covered to date in this blog.

The Case for Reparations

First off, I’m not an expert in this area. I can’t pretend to make the case for reparations better than Ta-Nehisi Coates.

But a core premise of this blog is that fairness is innate in social animals like us humans. Our social nature and fairness is the basis of social goods.

The history of the US is full of examples of unfairness towards African Americans. That unfairness runs counter to the brand of the US as the land of opportunity where all people are create equal.

One statistic that captures the unfairness: Black household wealth is just 10 percent of white households.

A Possible Program for Reparations

Money can never overcome the tragic history of slavery and racism in the US. But, we can look for ways to restore equity and rebuild communities.

I’ll go through some math to show that a reparations program is within the realm of possibility and affordability for the US. I’ve slightly rounded some numbers rounded here for simplicity of argument.

According to the U.S. Census Bureau, the country’s population is 330 million people. Of that, 13.4% or 44 million are African American. I’ll assume for the sake of simplicity that all African Americans are eligible for reparations.

Using the Census numbers, I’m going to break the African American population into three age groups:

  • 60% are 25 years or older
  • 25% are 10 – 24 years old
  • 15% are nine years old or less

Reparations: Housing

For those 25 years and old, reparations could be the equivalent of a 20 percent down payment on a $200,000 house, or $40,000. That’s close to the value of an average house in the US.

This would acknowledge the history of housing discrimination but also promote investment in our communities. Recipients wouldn’t be required to use the money for housing, of course. And, of course, there would also need to be an immediate end to all forms of housing discrimination.

Reparations: Education

For those 10-24 years old, reparations could be the equivalent of the average student loan debt after finishing college, or $30,000. That would acknowledge the history of unequal and discriminatory education but also invest in our workforce for the economy of today and tomorrow. Recipients wouldn’t be required to use the money for education. And, of course, there would also need to be an immediate end to all forms of education discrimination.

Reparations: Child welfare

For those ages 0 to 9, reparations could take the form of a Baby Bonds program of $15,000. That would acknowledge the history that African American children have been given an unfair start in life. The money would be invested and become available when recipients turn 18. Depending on the rate of interest and compounding, this could be significant money to help young African Americans with future education and careers. And, of course, there would also need to be an immediate end to all forms of child welfare discrimination.

Reparations: Initial cost

If you’ve read this far, you’re probably aching to know what this would cost. Here’s the breakdown.

  • Housing-based reparations for 25+: $1.06 trillion
  • Education-based reparations for 10-24: $332 billion
  • Initial round of Baby Bonds for 0-9: $100 billion

Total: $1.49 trillion

Can we afford this? The short answer is yes, we can afford this if we choose to.

Coincidentally, the initial cost of this reparations program is equivalent to the Trump administration tax cut package. The majority of that tax cut went to corporations and wealthy individuals. Congress this year passed more than $2 trillion in economic stimulus related to the coronavirus’s impact on the economy.

Generational Change

To ensure generational change, reparations could continue with the Baby Bonds program for 30 years. This would help build the generational wealth that the African American community has missed out on due to racism and discrimination.

According to Census numbers, approximately 560,000 African American children are born each year. To provide the ongoing Baby Bonds programs for these cohorts would cost $8.4 billion per year. Over 30 years, that comes to $252 billion.

The annual cost for the ongoing Baby Bonds program is far less than the $25 billion wasted by the U.S. Department of Defense every year. 

Reparations is More Than Money

Spending money on these reparations will be wasted if we don’t also instill fairness and equity in our government and society. It will mean little to provide housing money if housing discrimination continues. It will mean little to support education that remains segregated and unequal. It will mean little to fund childhoods that remain filled with toxic stress.

The good part is that operating without racism and discrimination shouldn’t add anything to budgets going forward.

(Image courtesy of Pikist)

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