A Feminist Economist On Baby Bonds, the Racial Wealth Gap, and the Mainstreaming of Radical Progressive Policy
The racial wealth “gap” in the United States is much more like a canyon, a chasm created over centuries through chattel slavery, the legacy of redlining, exclusionary immigration and labor policy, and a criminal justice system that is predatory toward black and Latinx Americans.
According to the Census Bureau’s Current Population Survey, for every $100 earned by the average white family, black families earn $57.30. The Institute for Policy Studies reports that black and Latinx households are projected to lose more wealth by 2020, by 18 and 12 percent respectively. As Forbes paraphrased, “After those declines, the median white household will own 86 times more wealth than its black counterpart, and 68 times more wealth than its Latino one.” And according to the Institute On Assets and Social Policy at Brandeis, white Americans with college degrees are three times wealthier than than black Americans with the same credentials.
Despite select success stories of black wealth (whether in the form of a celebrity like Oprah Winfrey or a former president like Barack Obama) and false claims by Donald Trump about gains in black employment under his administration, the overall economic outlook for the average black American is bleak. And the data is similar for Latinx Americans, most of whom cannot afford to pay for a $400 emergency expense on their own.
Closing the racial wealth gap is a gargantuan task centuries in the making, and it can’t be fixed with a single revolutionary bill passing congress. But some politicians are starting to embrace economic platforms that progressive economists and left organizers have embraced for decades. Policies like California senator and potential 2020 presidential contender Kamala Harris’s rather meager cash assistance plan for low income families, however short it may fall in its current iteration, would have been politically unthinkable even three years ago for a mainstream Democrat.
The same could be said of Cory Booker’s recently introduced baby bond proposal.
As Vox reported earlier this week, Booker’s American Opportunity Accounts Program would give each child born in the United States a savings account of $1,000. The government then deposits up to $2,000 into the account every year until the child turns 18. The deposits depend on family income, with lower income children receiving larger deposits and high income families receiving very little. By 18, a child from a low-income family could end up with nearly $50,000 to spend toward “wealth-building purchases”—like college tuition or a down-payment on a home. (Booker has yet to provide a full list of eligible uses for the savings.) This nest egg—referred to as a baby bond—is a stark contrast to current conservative policies such as the child tax credit.
I spoke with Yana Rodgers, the director of the Center for Women and Work at Rutgers University and professor of labor studies and feminist economics, about Booker’s proposal, what it could mean for the racial wealth gap, and creeping acceptance of universal basic income-style programs in the United States. Our conversation has been condensed and edited for clarity.
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