Creating Wealth — A Critical Step for Black America

by Lamell McMorris, Washington Informer:

The COVID-19 pandemic, as well as the recent attack on the U.S. Capitol in which domestic terrorists with Confederate flags and white nationalist symbols, has shaken America to its core. This is the moment to confront America’s racist past and present. Though we are not denying America’s achievement as the first constitutional democracy, we must also acknowledge that centuries of slavery and racist policies have not yet been resolved. Last year, after the tragic and publicized killings of George Floyd, Breonna Taylor, Ahmadu Arbery and countless more, Americans began to reckon not only with police brutality but the glaring racial inequities in economic prosperity, interactions with the criminal justice system and access to the voting booth. Now, with COVID-19 disproportionately devastating the Black community, the systemic inequities are clear and people are motivated for change. We need to build on this momentum and pass sweeping legislative policies that uproot the deeply embedded racism in our country.

First, the racial wealth and homeownership gap needs to be deliberately corrected. The median net worth of Black households in 2016 was just $17,150, compared to $171,000 for White households. Homeownership, a key step in creating generational wealth, is still skewed, as the racial homeownership gap is today wider than it was in the 1940s. The devastation of the COVID-19 pandemic has only accelerated this economic inequality. In addition to the disparate health impacts, COVID has also had much worse effects on Black businesses. A recent report by the National Bureau of Economic Research found that 41 percent of Black-owned businesses—about 440,000 enterprises—have been shuttered by COVID-19, compared to just 17 percent of white-owned businesses. It is critical to focus on growing and supporting Black-owned businesses through providing access to business loans, promoting widespread financial literacy (including stock market and real estate investment education) and financing entrepreneurial incubators that develop community businesses.

It is also critical to provide financial support to historically Black colleges and universities that are educating future Black leaders. Indeed, rather than investing in education, states spend exorbitant amounts of money on our mass incarceration system – some states have spent as much on prisons as on universities. Far too many people are incarcerated (we have less than five percent of the world’s population but nearly 25 percent of its prisoners), many for non-violent crimes and resulting in unnecessary costs to the state. This money needs to be redistributed, particularly due to the fact that African Americans continue to be disproportionately targeted by the prison system – African Americans are incarcerated at more than five times the rate of whites. This also exacerbates the racial wealth gap. Our broken criminal justice system is more likely to imprison poor people who then are passed over for jobs once they are released due to their past criminal history so they remain unable to achieve financial stability, continuing the cycle of poverty.

Of course, an important way to exert legislative change is through voting. However, the criminal justice system connects to the disenfranchisement of Black Americans. Millions of Americans are barred from voting due to past criminal convictions, an injustice that is a relic of our Jim Crow past as Black Americans are disproportionately targeted by the criminal justice system. Racial inequity in voting doesn’t stop there – after the Supreme Court gutted the Voting Rights Act in 2013, laws have sprung up across the country that suppress turnout of Black Americans and other racial minority groups. The federal government needs to pass a comprehensive voting rights bill that addresses racially targeted voter suppression. These problems are all intertwined and difficult to parse through, yet the only way to progress towards solving them is through dramatic legislative action that confronts systemic racism in its many forms.

We are at an inflection point when it comes to racial justice. After a traumatizing year, we have the opportunity now to recognize the deeper work that needs to happen to confront systemic racism. We are at a point where we need to realize that, despite the various accomplishments of America, we are a deeply flawed nation stained by centuries of slavery, Jim Crow laws, banking discrimination, red-lining segregation and mass incarceration which have yet to be resolved. To be clear, we can certainly celebrate America’s history of achievements, but we must also honestly assess our past and confront, through legislative action, the lingering obstacles placed on Black Americans.

Lamell McMorris is the founding principal of Greenlining Realty USA, a real estate redevelopment firm aimed at redressing the effects of redlining. McMorris is a lifelong advocate of civil, economic and social rights, currently serving on the national boards of the National Action Network, the National Urban League and the Rainbow PUSH Coalition. He previously served on the national board of the NAACP and as the Executive Director and COO of the Southern Christian Leadership Conference. He is founder and CEO of the Washington, DC-based strategic advisory firm Phase 2 Consulting.

This post originally appeared in the Washinton Informer.

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