The impossible economic race of black families

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As we commemorate June 16 this month, it is important to note that this is more than a one-day celebration. It is an appreciation of African American history and culture. It is recognizing that the black past is intertwined with the larger American story that includes the racism and economic injustice that stem from the legacy of slavery.

Imagine a race between two people from New York to California. One person gets a bike and the other a plane. The first to get to California is the winner, even though it’s an unfair race with rules against the rider.

This is what the wealth gap looks like for black families in America: an impossible race. Not only do their white counterparts have a 400-year edge in wealth, power, and economic mobility, but they aren’t held back by unfair prejudice and denied opportunity.

And it’s worth saying: the system isn’t broken – it was rigged like this by design. Pervasive generational inequality is systemic and structural. This type of racism creates disparities such as wealth, the criminal justice system, employment, housing, health care, education and more. In other words, this inequality is so entrenched in our daily lives that it becomes “just the way things are”.

As a small business owner, entrepreneur, and financial educator, I am reminded daily that we cannot achieve economic justice without simultaneously fighting for racial justice. In fact, I won a lawsuit that proves this point. Before starting my business in 2014, I had to go to several institutions to get even some of the start-up capital I needed, despite having sterling credit, numerous guarantees and other qualifications. Even after starting the business, licensees who, like me, were African American had difficulty obtaining financing; however, the first white licensee was able to quickly borrow more than double what I originally received.

Most of us see physical abuse and recognize it. But, when it comes to economic injustices rooted in racism – redlining, discriminatory lending practices, housing discrimination, the ever-widening wealth gap – how many of us recognize them as violence?

One of the reasons for the wealth gap in America is that white people had a 400 year lead in wealth creation. The system is rigged in favor of the richest, the gap between the rich and the poor continues to widen and blacks are falling further and further behind since they are rarely among the richest. Of the country’s 742 billionaires, only seven are black.

When you add a 400 year lead with the power of compound interest, it’s nearly impossible for blacks to catch up without massive structural changes in our rigged systems. A good start would be to tax the billionaires and the wealthy to generate the revenue we need to finally give everyone a fair chance to progress.

Economic violence leaves scars we cannot see on the outside but feel deeply inside for generations, even as we apply for small loans and rental leases. It cannot be rooted out without also dismantling the systemic racism that underlies it. My hometown of Waterloo consistently ranks among the worst cities in the country for black residents.

As we celebrate June 16, we must remember that it is not just another holiday or a day off. Our country has an increasingly important job to do to dismantle this racist economy and build one where those who have been left behind and expelled are finally set up to succeed. If we ever expect racial injustice to end, it must be at the heart of our struggle.

ReShonda Young is co-founder of Waterloo-based Bank of Jabez.

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