Economy Inequality

From Affirmative Action To Reparations: Bridging Racial Economic Inequality

While our federal government backtracks, state and local lawmakers are increasingly taking action to repair racial divides through policies designed to address racial inequality.
Image courtesy of Victoria Pickering on Flickr.

By Dedrick Asante-Muhammad / National Community Reinvestment Coalition

The Supreme Court’s latest attempt to mandate colorblindness amidst the reality of deep and widespread racial inequality has dealt another strong blow against affirmative action in higher education. Yet at the same time communities across the country are recognizing that racial inequality will only be addressed if policies are specifically designed to repair these divisions.

As I often state, the foundation of racial inequality is racial economic inequality and the foundation of racial economic inequality is the racial wealth divide. It is in these areas of economics and wealth that we clearly can see the depth of contemporary racial inequality. In 2019, the median Black wealth stood at $9,000, Latino wealth at $14,000 and white wealth at $160,000. Significant disparities also exist in median income, with African Americans at $41,000, Native Americans at $42,000, Latinos at $51,000, whites at $71,000 and Asian Americans at $87,000. Homeownership rates reveal a stark contrast as well, with Black and Latinx homeownership rates at 42% and 47.5% respectively, while white homeownership rates now reach a record high of nearly 73%.

Despite being well into the 21st century, racial inequality is deep and requires more direct intervention – not stepping away from affirmative action, a mild reform that was initiated 60 years ago. Affirmative action is defined as the practice or policy of favoring individuals belonging to groups regarded as disadvantaged or subject to discrimination. Affirmative action traces its origins back to President John F. Kennedy’s Executive Order 10925, issued in 1961 to ensure greater employment opportunities for African Americans in government contracting. Affirmative action policies have since aimed to increase representation and opportunities for historically marginalized groups, including African Americans, Latinos, Native Americans and women. These types of Affirmative Action programs have been successful in government – particularly as it relates to African Americans – but have yet to deliver similar gains in the private sector. In the banking industry, for example, Blacks and Latinos are still concentrated in entry level positions with only 3% and 4% representation at the executive level.

Legal challenges from conservatives have impeded the full implementation of affirmative action programs ever since they began. And those same conservatives have simultaneously firmed up structural inequalities by steering our economy in a regressive direction over the decades since Kennedy’s executive order. By the 1980s the political economy of the US turned away from its formerly progressive direction – where lower- and middle-income Americans saw the strongest economic growth – to an economy where the wealthy hoarded economic advancement, exacerbating racial economic inequality. 


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Over the past decade, progress has been made in acknowledging the reality of racial inequality and its economic roots. Focusing on racial economic inequality and the racial wealth divide has shifted the conversation away from merely combatting individual prejudice and discrimination, directing our attention towards dismantling the policies that perpetuate racial economic inequality and advancing investments in low-wealth communities of color.

In the aftermath of the police murder of George Floyd, corporate America made billions of dollars of pledges to address racial inequality within their corporations and to invest in bridging inequality in their communities. Some small steps forward appear to be occurring in terms of employment diversity and providing loans to lower wealth people of color but bridging the racial wealth divide requires far more. There has been a widespread acknowledgement that policy measures to address the roots of American inequality need to be overtly conscious of race and class and take affirmative steps to address the country’s original sin, a white supremacist political economy. 

While our federal government backtracks, state and local lawmakers are increasingly taking action to repair racial divides through policies designed to address racial inequality.

In Maryland, the Appraisal Gap from Historic Redlining Financial Assistance Program Alterations bill was passed. This legislation identifies the appraisal gap in formerly redlined areas that is such a problem for so many African American homeowners and invests in bridging this gap.

Connecticut just launched a state-wide baby bond program aimed at babies in poverty that will have a disproportionate impact on Blacks and Latinos. In adulthood each of these youth will have an estimated $10,000 to $24,000 to invest in economic opportunities like higher education, business development and homeownership. 

There are also cities and states developing local reparations programs to explicitly address the racial economic inequality and injustice historically faced by African Americans that is still having its impact today. 

Despite the regressive moves of the Supreme Court to hinder affirmative action in addressing racial inequality, communities across the country are providing a path forward to finally repair the racial inequality that has plagued the nation for so long. 


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Dedrick Asante-Muhammad

Dedrick Asante-Muhammad is an Associate Fellow at the Institute for Policy Studies and NCRC’s Chief of Organizing, Policy and Equity. You can follow him on Twitter @DedrickM.

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