White Supremacy is the Preexisting Condition:

Introduction:

For months now, a deadly pandemic and deep recession have pummeled the U.S. economy. Yet even as tens of millions of Americans lost their jobs, U.S. billionaires saw their collective wealth increase by leaps and bounds. 

At the same time, the Movement for Black Lives has drawn attention not just to police brutality against Black Americans, but to systemic racism more broadly. A huge cause and consequence of that systemic injustice is the underlying racial wealth divide — the financial legacy of centuries of white supremacy.

Even before the pandemic, we found that median white families had literally dozens of times the net worth of median Black and Latino families. The pandemic is supercharging that inequality, with the skyrocketing wealth of the largely white billionaire class putting most Americans, especially people of color, further and further behind.

White supremacy is the pre-existing condition that’s made this pandemic deadlier for people of color and held back our economic recovery. We have to learn the lessons of our failed responses to the 2008 recession, and bring an intentional commitment to racial equity in the design of economic stimulus and recovery measures.

It demands a robust policy response, which we detail in this report.

Key Findings

• The U.S. spends an estimated $729 billion a year to assist with individual wealth building, mostly on the already wealthy. For example, 90 percent of $90 billion in tax-related housing assistance goes to households with incomes over $100,000. Those earning $50,000 get roughly 1 percent.
• In the 12 weeks between March 18 and June 11, the combined wealth of all U.S. billionaires increased by more than $637 billion, the equivalent of more than 13 percent of all Black wealth.
• U.S. billionaires together have $3.581 trillion in wealth, more than all Latino wealth combined, which is $3.49 trillion. In other words, 640 billionaires have as much wealth as 59 million Latinos.
• Total U.S. billionaire wealth is equal to three-quarters of all Black wealth combined, which is $4.68 trillion.
• The top 12 U.S. billionaires have a combined wealth of $921 billion, which is equivalent to all the home equity wealth of the entire Black population, over 17 million households.
• The top 70 U.S. billionaires together hold $1.9 trillion, the equivalent to the home equity wealth of all Black and Latino households combined.

The racial wealth divide is a pre-existing condition that has worsened the severe health and economic impacts of the Covid-19 crisis on communities of color. Nationally, Black Americans have Covid-19 mortality rates that are more than twice as high as other races.

Black and brown workers are significantly more likely to be exposed at work. About 37.7 percent of Black workers are employed in essential industries, compared to 26.9 percent of whites. Black workers are 40 percent more likely than whites to work in hospitals, and are significantly less likely to have the option to telework.

Although many people of color are doing essential work, overall they have suffered greater job and income losses. Sixty-one percent of Latino households and 44 percent of Black households have had a job or wage loss due to the pandemic, compared to 38 percent of white households.

Although it will be many months until we have a full national picture of the pandemic, the crisis is clearly taking its heaviest toll on people of color.

Phase One: Emergency Measures

1. Improve Racial Data Collection as Part of Emergency Investments. Congress should mandate dramatically increased federal, state, and regional data collection of racial and ethnic data, both in terms of health impacts as well as the application of stimulus and other economic programs.
2. Audit Crisis Relief and Recovery Policies for Racial Equity. Congress should conduct a “Racial Wealth Audit” of each stimulus bill and economic recovery proposal to answer the question: Did this policy reduce the racial wealth divide or make it more pronounced?
3. Implement Income Supports that Expand to Guaranteed Income. A guaranteed income set above the poverty line would provide households with income security, especially in times of crisis. It could also provide the minimum decency floor for low-wage workers.
4. Institute Postal Banking. Congress should expand the Postal Service’s mandate to provide financial services to the millions of U.S. households that are unbanked or underbanked — including 47 percent of Black and 42 percent of Latino households — and reduce exposure to predatory lenders.

Phase Two: Emerging from Recession

1. Delink Health Care from Employment. The racial disparities in Covid-19 mortality dramatize the moral necessity to have a Medicare for All system that boosts overall health equity and wellness.
2. Expand Inclusive Housing and Ownership. Congress should reverse four decades of federal policy retreat to expand the supply of decent affordable rental housing and reverse the slide in homeownership, a critical component of wealth-building.
3. Create a Federal Jobs Guarantee with a Living Wage. Like the Works Project Administration (WPA) during the Great Depression, a Federal Jobs Guarantee gives people the opportunity to access a job. An emergency guaranteed job could be deployed during local and regional disasters as a means of mobilizing much-needed labor to assist with reconstruction, public health infrastructure, and a transition to a green economy.
4. Institute Baby Bonds. Every newborn should be provided with an account endowed and managed by the federal government with funds that can be accessed in adulthood for wealth-building investments such as homeownership, enterprise start-ups, and higher education without debt.

Phase Three: Interrupting Inequality

Tax policy reforms would reduce the destructive concentrations of wealth and power that supercharge the racial economic divide — and raise revenue for investments to reduce racial and economic inequalities. They include…

• Reverse upside-down tax subsidies that benefit the already wealthy.
• Levy an emergency 10 percent millionaire income surtax.
• Institute a financial transaction tax.
• Make the federal estate tax more progressive and institute a wealth tax.
• Shut down the global hidden wealth system.

Download our Press Release [PDF]

Media Contacts:

Bob Keener
bobknr@ips-dc.org
617-610-6766

Chuck Collins
chuck@ips-dc.org