Reparations As Solution to the Racial Wealth Gap

  • August 26, 2021

The pandemic has further exposed and worsened the extreme wealth inequality in the U.S., not just between the top 1 percent and everyone else, but also between black and white households. At the same time U.S. billionaires increased their wealth by $1.8 trillion during the pandemic, black people faced greater financial emergencies, bore a disproportionate number of COVID-19 deaths and infections, and reported higher rates of income loss.

Many billionaires stepped up to donate large amounts during the pandemic, but those amounts were a very small percentage of their net worth. Amazon's founder Jeff Bezos might be the highest-donating American philanthropist in 2020, but his philanthropy doesn't compensate for the fact that he profited off the pandemic while preventing unions. His wealth is only possible due to the labor of thousands of workers who are rewarded with low wages and poor working conditions. Despite the company's denial, reports show that Amazon workers were pressured to skip bathroom breaks and instead urinate in bottles.

This dynamic of worker exploitation increasing income inequality parallels how America as a nation was built on and has profited off slave labor, with black people paying the price while white Americans received a massive head start in accumulating wealth. In his 2019 Congressional testimony, renowned writer Ta-Nehisi Coates stated, "it's impossible to imagine America without the inheritance of slavery." Wealth is generational, and so is the inequality: even today, the average white family has about ten times the amount of wealth as the average black family.

Bootstrapping or individual effort alone can't address such a deep-rooted divide, and neither can billionaire philanthropy. Reparations are needed to atone for past injustices and close the racial wealth gap.

What are reparations?

The concept of reparations can sound complicated and impractical, but it offers a real and practical solution to income inequality.

While the topic of reparations has been more prominent in the news recently, it's not something novel. Groups like victims of the Holocaust and of Japanese internment during World War II have received reparations. With the publication of his article, The Case for Reparations, Ta-Nehisi Coates inspired a greater dialogue about the possibility of reparations. As Coates says, "Reparations—by which I mean the full acceptance of our collective biography and its consequences—is the price we must pay to see ourselves squarely."

While it might be hard to conceive how exactly to implement such a solution, it's quite feasible for people and organizations to carry out reparative actions, even in the absence of governmental policy. Our author Edgar Villanueva, an internationally recognized expert on social justice philanthropy and author of Decolonizing Wealth, talks about how reparations are a tangible solution. He says, "The first step toward reparations doesn't need to be complicated. Any sincere action offered through a restorative lens and intent is better than nothing."

Villanueva discusses how public and private institutions can play a role in carrying out reparations. One such example is that of The Bush Foundation committing $100 million to seed two community trust funds that will benefit Black and Native American communities.

Reparations and Decolonization

Decolonizing Wealth looks at colonization as a major cause of wealth inequality. Alongside reparations, the concept of decolonization, or the process of undoing colonization, is taking root. The ongoing trends in police violence, gaining national attention after the murder of George Floyd last year, also made the need for decolonization and racial justice more urgent.

According to Villanueva, decolonization, when taken literally, would mean that the stolen land is returned, and sovereignty over not only the land and its resources but also over social structures and traditions is granted back to those from whom it was all stolen.

Villanueva acknowledges that an absolutist definition of decolonization wouldn't be practical. Given how intertwined Indigenous and settler lives are, a more tangible solution would be mindful of the pragmatic reality of today's society. Instead, as Villanueva states, "What we can focus on with decolonization is stopping the cycles of abuse and healing ourselves from trauma."
He encourages us to heal by taking responsibility for our part in perpetuating what he calls "the colonizer virus," a metaphor for an infection of colonial ideas that make society less healthy. We can reject the colonized aspects of our culture and embrace a new paradigm of connecting and belonging.

Money as Medicine

Villanueva demonstrates that many things can be used for medicinal purposes, money being one of them. There are numerous ways that corporations, museums, libraries, and people can use their resources for healing. Villanueva mentions LUSH Cosmetics in particular as an example of a company that is actively working towards healing and shows how it models three kinds of medicine: "One, their corporate philanthropy is prioritizing Indigenous folks and people of color. Two, they're using their platform to amplify marginalized voices. And three, they're working on modeling their values internally."

Money is also not the only thing that can be used as medicine. It doesn't just have to be an institution giving away billions of dollars for it to count. Even a one-on-one conversation can be a start.

Individual and Institutional Healing

Central to our book Decolonizing Wealth is a seven-step method for healing from the trauma of colonization. Villanueva explores the tension between goals that are pragmatic and realistic—and those that are idealistic and unfeasible. The solution he offers is radical in the way it questions the story of white supremacy and offers new possibilities. Given the entrenched, complex nature of colonization, the approach to healing from it has to be one that is comprehensive and multi-faceted.

The seven steps—Grieve, Apologize, Listen, Relate, Represent, Invest, Repair—ultimately help heal and address the layers of trauma and exploitation caused by colonization. This is not necessarily a linear process or a quick fix. It is instead a process that is circular and long, one that requires patience, grit, and softness but is ultimately implementable for both individuals and institutions.

The legacy of slavery and colonization is one of racial disparity and collective trauma, but reparative action can help restore balance and make room for a new future.

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