Research Projects

The Plunder of Black America:
The Making of the Racial Wealth Gap

In over 400 years, there’s been startlingly little progress in overcoming the history of economic inequality for Black Americans. In 1865, Black Americans owned one-half of 1 percent of national wealth. Today it’s hardly budged—African Americans have just above 1.5 percent for roughly the same percentage of the overall population. The typical white family has thirteen times the wealth of the typical Black family. That gap has risen over the last fifty years and is widening. It’s a story that’s largely been invisible, hidden by the assumption of progress after the end of slavery and the achievements of Civil Rights. Yet it’s a reality that can be seen in a history of chained structural disadvantages.

The racial wealth gap’s tragedy is that as Black people overcame one disadvantage or constraint on income or wealth—breaking a link in the chain—those in power forged another in its place.

It’s a common misperception that Black wealth inequality is an unfortunate legacy of a bygone era. Slavery and Jim Crow bred Black poverty. In the twentieth century, millions of Black families moved out of the South chasing high wages in urban industry. But after a few decades the factories closed, inner cities decayed, and a “complex tangle of pathology” emerged in single-parent households and soaring incarceration rates. Lower incomes and correspondingly low savings rates prevented Black wealth transfer versus whites in cities and suburbs. Instead of wealth transfer to the next generation, most Black families bear the costs of elder care. One-fifth have a net worth of $0 or below; 75 percent have less than $10,000 for retirement. The seeming solution? End job, housing, and school discrimination, enforce civil rights, and sprinkle the market with affirmative action. In that scenario, the main thing missing is follow-through. If Black people would just stand up and fly straight, move to the suburbs, marry, finish school, train up, and play by the rules, the gap would vanish.

But that’s a myth, perpetuated by 400 years of institutional momentum. It stands outside of history. As Ta-Nehisi Coates argued, “The plunder of black life was drilled into this country in its infancy and reinforced across its history, so that plunder has become an heirloom, an intelligence, a sentience, a default setting to which, likely to the end of our days, we must invariably return.” Plunder is the plan not an incident. In the case of white theft of Black value, the plunder is structural, part of the American economy. It transformed over time but remains in the hardpan of American economic development.

In the colonial era, enslavers enforced disadvantages that emerged as a chain, forged in the making of America’s economic linkages beginning in the seventeenth century. After a brief period of Black upward mobility in the 1650s, enslavers made black skin a marker of disinheritance. African-descended children became inheritable property.

Slavery was one set of links in that chain in which enslavers disinherited children, forced the labor of Black people for no pay, and enforced geographic immobility. Enslaved people became the basis of credit—collateral enslavers borrowed against—and those disadvantages became a leading structural feature of the colonial economy. Before the American Revolution, property in Black people was foundational to white wealth creation and transfer in a society that was otherwise exceptionally equal.

The early United States became a modern economy in large measure through the stolen labor of African-descended people. Colonial disinheritance led to wholesale dispossession. Enslaved people were essentially born in debt to enslavers, and that debt grew as individual workers produced more cotton, built more houses, or tended more children. Enslavers wrecked their health and stole their children, not to mention their intellectual property. To owners, slaves were both labor and capital, borrowed against to finance cotton plantations and forced to work to make America’s top export commodity.

Geographic boundaries reinforced social ones as enslavers relocated over 1 million Black Americans to cotton and sugar frontiers and confined them in slave labor camps. Slave owners became the richest class of Americans, seizing the reins of institutional power as the largest single political interest.  The boots that came down on the necks of African-descended people fixed dispossession in place, wedding enslavers to perpetual violence and rape in the anxious pursuit of returns while creating staggering economic inequality in the United States generally.

Many structural features of Black dispossession survived Emancipation in 1865. Confederates lost their property in slaves in the Civil War but not their land or system of credit allocation. The freedom of some 4 million African-descended people came with no back wages, no 40 acres and a mule. Black citizens fought for civil and political rights, but economic disadvantages were quickly recast as formerly enslaved people returned to work for former enslavers.

Those who stole twelve generations of Black labor fought to give nothing back to the thirteenth, instead stacking the market against freedpeople, insisting that only a system that mimicked slavery could salvage production and lead an economic recovery. In time, national leaders agreed. Some Black families turned the tables and bought their own land, but white neighbors preyed on the vulnerable. Across wide areas of the South, slavery was replaced by debt peonage called sharecropping.

Boundaries to geographic mobility reemerged in a complex of laws and violent coercion punishing those who crossed social or political borders. Convict leasing, sharecropping, lynching, and property forfeiture were cornerstones of Jim Crow—the new links in a chain of disadvantages. Black codes punished unemployment, forbade certain kinds of property ownership and mobility. Each year, trumped up and petty convictions ensnared thousands of Black men, women, and children, stripping them of freedom and income potential. When industry moved south, employers hired white factory workers and leased Black ones from jails and prisons. Conservatives treated African American labor organizing like slave uprisings, responding with deadly force. Northern employers spurned Black job seekers, and 92 percent of African Americans still lived in the South in 1900.

The nation industrialized between the 1870s and the 1910s, but instead of vanishing, policymakers, landlords, and employers reconfigured Black disadvantages. Dispossession gave way to decapitalization in terms of surcharges on opportunities—high rents, for instance—and new forms of prejudice. When African-descended people began to trickle and then flood into northern cities during and after World War I they competed with whites for opportunities designed for whites. “The Negro is up against the white man’s standard, without the white man’s opportunity,” argued Black sociologist Kelly Miller in 1930. African American migrants who fled the South crammed into marginal neighborhoods. In Isabella Wilkerson’s words, migrants to Chicago “were living in virtual slave cabins stacked on top of one another.”

As the Great Migration took shape, escalators into the middle class began moving for Black families, but they moved slowly. Black workers joined unions, trained up, doubled up in housing, scrimped and saved, and played by the rules. But Jim Crow followed Black people out of the South, reemerging in federal housing and social policies. Southern Democrats were gatekeepers of New Deal legislation. And when the federal government created economic entitlements, it built in white privilege.

New Deal policies designed to manage seemingly anarchic capitalism again refastened Black disadvantages. African Americans seeking home loans found themselves redlined—ineligible for credit—as a matter of federal home loan guarantees. Housing costs rose without giving Black residents a stake in the value of their homes while Black (and Jewish, Asian, Latin, and immigrant) neighborhoods decayed from lack of investment. Real estate professionals and developers acted hand-in-glove with racist lending policies, hemming Black families into neighborhoods where disadvantages compounded one another. Schools and services in poor neighborhoods were a drag on upward mobility. Since housing equity makes up about two-thirds of median household wealth, excluding Black Americans from establishing equity during a time of unprecedented rises in home values locked in and exacerbated wealth disparities.

Social Security was unavailable to farm and domestic workers, including most Black workers. And after fighting for a double victory against fascism abroad and racism at home, Black World War II veterans returned to find their G.I. benefits were a sham. As one historian argues, “the GI Bill did create a more middle-class society, but almost exclusively for whites . . . . [it] was deliberately designed to accommodate Jim Crow.” Veterans who attended college tended to have children and grandchildren who attended college, creating a pipeline to white-collar careers. And the disadvantages of missing out on G.I. benefits was like negative interest compounding in each generation.

Regarded as slums needing revitalization, Black neighborhoods unsuitable for home lending in the 1930s and ‘40s were subjects of urban renewal and Interstate highways in the 1950s and ‘60s, displacing residents without benefitting them. Public housing and transportation took on the stigma of welfare to an undeserving poor.

Black disadvantages versus whites in terms of housing, credit, schooling, healthcare, and transportation were accented by the “great compression” of wages and the economic entitlements of managed capitalism. Economic inequality took a nosedive at midcentury, thanks in part to a constellation of policies and circumstances. Never before (or since) did wage earners capture such a high proportion of national income. That became wealth for a new middle class of homeowners whose investments rose and became a lever on opportunity for the next generation.

White advantages reinforced one another in suburban enclaves as rising home values, good schools, and abundant credit boosted the next generation into white-collar work and unimagined prosperity. White kids prepared for the frontiers of science, business, and professional careers, inheriting wealth and advantages that became entitlements.

Black Americans heroically insisted on sharing in the white wealth bonanza, beginning with a good job. Yet the signal victories of the Civil Rights movement came just as economic structures were disadvantaging those who had missed out on the great compression. Civil Rights arrived as the lights were dimming on “the great exception” or leveling, after the seeds of future disadvantage were sown. School and public desegregation, voting rights, and prohibitions on housing discrimination arrived at precisely the time that wages of non-managerial workers were stagnating. Black Americans pried open the door to an income escalator that was breaking down.

For urban Black Americans, the legacy of housing and job discrimination seeded disadvantages for the post-Civil Rights generation for whom opportunities in new technology and business fields were largely out of reach. Despite the 1968 Fair Housing Act, residential segregation persisted. Enforcement bred evasions, and patterns of post-1968 housing development reflected the prejudices of white homebuyers and real estate professionals who linked whiteness to property values. Black disadvantages were rebundled in urban areas while disproportionately unionized African American workers were disproportionately vulnerable to deindustrialization.

Slamming the door on Black entry to the middle class, a white backlash to Civil Rights took the form of open shops, privatization, and prison cells. When southern white conservatives bolted the Democratic Party over Civil Rights, the party of Richard Nixon led new efforts to disadvantage Black people. Policy responses to economic challenges of the 1970s weakened unions, promoting income inequality. White backlash against housing desegregation and school integration culminated in the War on Drugs.

The politics of white entitlement and resentment led to the mass incarceration of Black men on a scale not seen since Jim Crow convict leasing of the nineteenth century. Incarceration is often an economic life sentence for families of those convicted. Missing from school, family, voting polls, and work, the economic toll rebundled Black geographic and social disadvantages at a critical time of structural change.

Late to enter portals to upward mobility, high bars to entry became part of the bundle of African American disadvantages. Opportunities in the new economy of tech, healthcare, and finance had higher opportunity costs than industrial work in terms of education and training. Affirmative action has largely benefitted white women while the costs of credit for education and housing are higher for Black Americans than for any other group. Onramps to success in the new economy are steep and precarious, as mass incarceration continues to affect one in three Black men while racism is endemic in job markets.

Rural Black Americans—still the largest rural minority—fared no better. Those who remained in the locales in which their ancestors were enslaved live in precisely those places with the least intergenerational upward mobility in the twenty-first century. Since the 1940s, African American farmers have been dispossessed of their land with the help of government agencies. Rural African Americans have among the worst health outcomes in the nation.

And the tragedy of the last fifty years is that at precisely the moment that some Black Americans were able to cross borders into the suburbs, join the 9.9 percent of wealthy Americans near the top in poverty-blind super zips, gains for most have evaporated. Over the past 35 years, the wealth gap has grown substantially. Typical Black household incomes halved between 1983 and 2016 while median white household incomes have risen by a third.

The 2008 housing crisis wiped out about half of African Americans’ wealth. Since Black borrowers were steered to subprime loans regardless of income, they were more vulnerable to foreclosure, taking a higher proportion of family wealth despite lower home values relative to white borrowers. And lower wage gains than any other group over the last decade have further disadvantaged African American earners.

Inequality in the United States has become a yawning chasm. Civil Rights are being rolled back. Predatory rent-to-own housing schemes targeting Black residents are making a comeback, while would-be homebuyers face lending and real estate discrimination. African-descended people face a high bar to education in terms of debt burden, which scholars call “predatory inclusion” in higher education. Escalators into the middle class have slowed and stalled, and the rung of the economic ladder one starts on is most likely where one will end up.

Reparations for slavery has gained renewed interest, but current policy momentum—reviving the War on Drugs, scaling up private prisons, cutting social programs, dismantling Civil Rights protections, and slashing taxes on wealthy earners and corporations—are exacerbating the racial wealth gap, which is on track to widen. By the 175th anniversary of Emancipation in 2040, the typical Black American family will be poorer—much poorer—than in 1980. And that is no accident.

Plunder is still the plan as Black Americans face enduring “structural barriers” to upward mobility. The historical momentum of structural disadvantages play as variations on a theme of the last 350 years. The persistence in the wealth gap even suggests structural slavery will persist.

 


The Slaves We Eat is book and exhibit project exploring a 350-year history of slavery and coerced labor in sugar, cotton, and shrimp focusing on the making of global supply chains, how slavery is hidden at their base, and how they reveal slavery’s continuities. By SlavesWeEatlinking the pedestrian acts of buying a bag of sugar, cotton blouse, or tray of shrimp to the chains that create value while forcing down labor costs, we can see how slavery survived emancipation.

Nearly three centuries ago a Philadelphia abolitionist condemned those who ate “the flesh and blood of slaves instead of Christ.” It was a potent contention linking slaves’ distant toil and the substance of what we consume.  This book takes that metaphor as a starting point to examine three and a half centuries of slavery through the supply chains of sugar, cotton, and shrimp. It argues that slavery survived its legal termination and that slave-made goods and services are present in much of what we consume.
            The Slaves We Eat is a human history of managers and forced laborers focusing on the developments linking consumers’ pedestrian acts of buying a bag of sugar, a cotton blouse, or a tray of shrimp to the violence that make those commodities affordable for so many. It links regimes of slave labor over time using supply chain management, historicizing a central focus of business studies today and pinpointing how slavery was baked into early modern supply chains and why those linkages persisted through eras of emancipation. The central historical claim is that the 25 million people enslaved today are legatees of a process responsible for 12 million captives embarked in the transatlantic slave trade and millions more forced toil in slave labor camps in the Americas and beyond. More here: www.theslavesweeat.com


Writing Slavery:  Race, Bondage, and Narrative in Nineteenth-Century America (Baltimore: Johns Hopkins University Press, under contract) contends that literature, including novels, autobiographies, and other stories shaped a narrative of slavery that emerged before the American Civil War. Within that narrative were conflicting scripts. Pro-slavery plantation romancers contributed a portrait of happy slaves in an idylic setting. African-descended Americans disputed that paternalist account, writing vehement denunciations of slavery as a landscape of terror and violence. Anti-slavery novelists drew from both scripts, accepting some of the plantation romance’s racism while using its aesthetics to argue that slavery took unfair advantage of African-descended people. That narrative came to life again after the Civil War as Americans argued about what the war meant and whether black Americans deserved anything but freedom. Writing Slavery traces the strands of those narratives through time, from plantation romances of the 1820s to racial realism of the 1890s.