Racial wealth gap is vast: 2020 Democrats have plans to close it

Monday, May 20, 2019
NBC News

If you’ve been to an event with a Democrat running for president this year, there's a good chance you’ve heard about it: the racial wealth gap.

Candidates are regularly bringing up the fact that the typical black family has only one-tenth the assets of the typical white family — a divide that has grown larger than it was 35 years ago.

Far from a niche concern, candidates have incorporated it into their signature proposals. They've addressed it in speeches not just to black churches in South Carolina, but also to mostly white town hall crowds in Iowa and New Hampshire.

In many ways, it's a defining issue of the 2020 cycle so far, one that brings together multiple trends that are transforming the party: the rising clout of nonwhite voters, a rush to embrace more ambitious policy, and heightened concerns about both racism and inequality under President Donald Trump.

 

Sen. Cory Booker on promoting cross-racial unity

MARCH 24, 201913:08

In Iowa, Sen. Elizabeth Warren of Massachusetts gives detailed history lessons on how discriminatory policies created the wealth gap while predatory lending and mass incarceration exacerbated it. Beto O’Rourke, the former Texas congressman, condemns the “imperfect, unfair, unjust and racist capitalist economy."

Sen. Cory Booker of New Jersey doesn’t just bring up the disparity in places like New Hampshire, he brings state-specific data along with him.

“We’ve got to find ways to balance the economic scales and have true equality of opportunity in our country,” Booker told NBC News in an interview. “If we aren't willing to talk about the problem, then it’s very hard to think that we’ll come up with real solutions to that problem.”

Politicians, academics and activists who’ve worked on these issues say this cycle is unique both in the emphasis White House hopefuls have put on the racial wealth gap, but also the type of detailed agendas they've proposed to address it.

"I think black voters are waking up to the fact that in exchange for our votes, we are demanding accountability for the issues that really matter for our community," said Akunna Cook, executive director of the Black Economic Alliance, which is hosting a forum with 2020 candidates next month in South Carolina.

What Democrats say they'll do

The highest-profile discussion on race in 2020 has been about reparations for descendants of enslaved African Americans. Many candidates endorse studying the idea — further than Democrats have gone in the past — but have disappointed some activists by mostly avoiding calls for direct restitution.

"We need simultaneously a reparations program and a set of transformative policies that apply to everyone, but we need both,” William A. Darity Jr., a Duke professor who has advocated for the concept, said. “The latter cannot substitute for the former.”

But that debate, while significant, can obscure how much the campaigns have embraced the pro-reparations movement's arguments and its leading advocates in crafting their plans.

When Warren set out to design a proposal to cancel up to $50,000 in student loans, for example, she sought out academics who specialize in the ways debt perpetuates racial divides, and her campaign stressed its impact on closing them.

In April, the Kirwan Institute for the Study of Race and Ethnicity — whose executive director, Darrick Hamilton, has become a hot commodity among Democratic candidates this cycle — put out a list of 10 policy ideas to help close the racial wealth gap. Sen. Kirsten Gillibrand of New York quickly announced her support for all 10, which included a bill she authored to create a postal banking service.

“The wealth gap is deep and it is pervasive and it’s very hard to tackle it with one solution,” Gillibrand told NBC News. "You need to tackle it across the board."

For the most part, candidates have pledged to address the wealth gap and related issues with policies that benefit Americans regardless of their ethnic background.

Sen. Kamala Harris of California, for example, has argued that her LIFT Act, which would offer tax credits to families making under $100,000 per year, "will directly benefit black children, black families, black homeowners because the disparities are so significant."

Booker has run on giving a “baby bond” to every newborn, an idea popularized by Hamilton and Darity, that would grow based on how much their family earns, with poorer households getting a larger contribution. As adults, they would use it to help buy a home or go to school.

While Democrats have long decried racism, Hamilton says they've changed how they discuss it. Past presidential contenders may have emphasized education and "reductionist narratives of personal responsibility" to overcome lingering divides, the 2020 candidates are focusing more on direct economic assistance and confronting institutional racism.

"I think now they’re recognizing the legacies of the past as having ongoing effects," he said.

It's now common for Democratic candidates to catch voters up on the history of "redlining," a federal policy banned in 1968 that prevented black neighborhoods from receiving the benefits and subsidies that white families used to buy homes. That practice has contributed to today's chasm in homeownership rates and Warren's housing plan includes a proposal to aid places that were affected by its use.

“The way I see this, is we can't write a housing bill that simply says we’re going to be race-neutral,” Warren told voters in Iowa this month. “Race neutral doesn’t cut it here.”

Risks and rewards

The political upside to the shift is clear. As the country grows more diverse, Democrats have become increasingly reliant on black voters to win primary contests and general elections alike.

In 2016, Hillary Clinton defeated Sen. Bernie Sanders, I-Vt., in the primaries by appealing to older black voters, but faltered in the general election in part due to a collapse in support among younger black voters, many of whom were suspicious of her record on criminal justice.

Candidates are acutely aware of both losses. This time around, Sanders has revamped his outreach efforts.

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The racial wealth gap exists because slavery, segregation, Jim Crow and predatory lending stole wealth from African Americans. That racial wealth gap must be repaired, and institutional racism must be rooted out wherever it exists.

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But there are also risks. Progressives have long argued that their opponents scuttle social spending with racially coded terms like "welfare queens" that portray it as a giveaway to undeserving minorities. To them, Trump's frequent attacks on immigrants embody this approach.

Progressive groups commissioned extensive polling last year on how to discuss racial inequality without turning off swing voters. The findings were nuanced: 59 percent of voters were "persuadable" and reported being both concerned about discrimination and open to appeals to fix it. But this group was also uneasy with the topic's prominence and suspicious of “reverse racism."

By running on proposals that would benefit lower- and middle-income voters of all races, Democrats hope they can build a multiracial alliance on kitchen table issues.

“Candidates will be well served to provide specific examples of people who will be helped,” Jeff Horwitt, a Democratic pollster, said, adding that the examples "may be different when talking to Democratic primary voters than general election voters.”

Some 2020 candidates have backed a “10-20-30” approach pioneered by House Majority Whip James Clyburn, D-S.C., that allocates at least 10 percent of federal funding to areas where 20 percent of the population has lived below the poverty line for 30 years. 

Clyburn noted in an interview that his formula directs more resources to conservative rural counties as well, a feature he says has helped win support from GOP leaders in some areas.

"I've learned how to make these things work and get around — sometimes through — these racial objections,” Clyburn told NBC News.

So far, Democrats have shown few signs of concern about a backlash to addressing inequality. But activists know they need to prove candidates can win on their ideas or risk seeing another approach take hold. Some recall watching the party respond to repeated losses in the 1980s with President Bill Clinton's pledge to "end welfare as we know it."

"It's an exciting time to be in demand," said Mehrsa Baradaran, a law professor at the University of Georgia and the author of "The Color of Money: Black Banks and the Racial Wealth Gap," who has advised Warren. "I don’t for one second think the tide couldn’t turn tomorrow."

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