Reparations Scholar Explains Why State Reparations Efforts are a Drop in the Bucket Compared to a Federal Program

The economist and public policy professor at Duke University argues that a federal program could achieve much more.

For example, in 2021, the Financial Industry Regulatory Authority performed a research study on financial literacy in the United States. They discovered that Asian Americans and Whites scored higher on the test they provided than did Black and Hispanic participants.

Some believe that closing the wealth gap will require attempting to repair damage caused to certain communities by redlining in real estate and mortgage programs. Solutions might include down payment assistance and mortgage assistance, among other possibilities.

Darity stresses the urgency of action He says that “The longer we wait, the larger the bill will get.” He shared these insights during an interview at the American Economics Association’s annual conference in San Antonio.

Data shows that the proposition led to people of color and women losing out on approximately $1 billion per year, and also significantly impacted the ability of Black and Hispanic people to attend college.

Another poll by the University of Massachusetts Amherst in early 2023 showed 36% overall support for reparations. Despite this relatively large number, the debate on the scope, size, eligibility criteria, and forms of compensation remains intense. 

These include slavery, racial segregation during the Jim Crow era, Black property loss, and discriminatory public policies that have hindered Black Americans from building wealth.

Each of these forms of reparations have specific facets. For instance, direct payments have been broken down specifically by Darity. He based a calculation for restorative payments based on a broken promise General Sherman made at the close of the Civil War, that freed Blacks were owed “40 acres and a mule.” Darity calculates the value of this at $80,000 per person, which would total around $1.2 trillion.

He emphasizes the inherent flaws, noting that different eligibility standards and varied outcomes based on geographic location will result from decentralized programs. Darity predicts that if left to states and localities, some communities may do nothing at all, providing opponents with ammunition against a nationwide program.

He suggests that Washington, D.C., could be an exception as the federal district has the unique ability to directly appeal to the federal government for restitution. This could be a starting place, as it might potentially set a precedent for a nationwide approach.

The task force in California was established in 2020 and spent about 3 years studying and developing reparations proposals for African Americans in the state. They issued their final report in June 2023, which provides an exhaustive plan for reparations of slavery and its lingering effects on American society. However, Darity believes that these efforts are insufficient. He underscores the need for a federal project to address the issue comprehensively.

The path to a nationwide reparations program is steeped in challenges. As the debate continues, the urgency to address historical injustices and systemic disparities remains a focal point. As Darity has noted, the longer we wait, the more expensive the program will be.