The Racial Wealth Gap Is A Legacy Of Slavery — But We Have The Power To Build a Better Future
- Essential Common Future
We honor Juneteenth by fighting for economic justice each and every day
Today, we celebrate Juneteenth. Marking the day in 1865 when enslaved African-Americans in Galveston, Texas were told they were free, this day was not federally recognized until 2021. Much has been written regarding who Juneteenth is for and the sudden commercialization of it, but we wanted to spend time going back to the origins of this day, and explore how the legacy of slavery fuels the very work we do at Common Future.
Prior to the Emancipation Proclamation of 1863, white people in the United States had profited off of their ownership of other human beings for centuries. As David W. Blight explains in The Civil War and Reconstruction Era, “by 1860, there were more millionaires (slaveholders all) living in the lower Mississippi Valley than anywhere else in the United States. In the same year, the nearly 4 million American slaves were worth some $3.5 billion — equivalent to $42 trillion today — making them the largest single financial asset in the entire U.S. economy, worth more than all manufacturing and railroads combined.” As Netflix and Vox puts it, “Just over 150 years ago, this was money for almost half of America. On multiple bills were people picking cotton. Enslaved people. These slaves didn’t just represent wealth in America, they were wealth.”
When slavery ended, General William T. Sherman promised to redistribute a huge tracts of land along the Atlantic coastline to Black Americans recently freed from slavery. President Lincoln and Congress signed on, and soon 40,000 freedmen in the South had started to plant and build. But this legacy was not to be. Shortly following the assassination of President Lincoln, President Johnson rescinded the order. The freedmen were evicted, and the land was returned to its former owners, keeping that generational wealth with the former slavers and leaving those recently freed with nothing.
The wealth accumulated by slave owners didn’t vanish when the institution of slavery was abolished. Even if Black Americans had not spent the last 160 years fighting off the the many-headed Hydra that is systemic racism — redlining, the inability to access loans from banks or the Federal government, racist hiring practices, pay gaps, predatory mortgages, and over-incarceration due to laws and policing practices rooted in racism — we would still be looking at a significant racial wealth gap. This is the ultimate crux of the argument for reparations, which is a proposal to pay back Black Americans for unpaid wages under slavery, and eliminate a piece of the racial wealth gap. But with systemic racism, and the absence of those reparations, the racial wealth chasm has only deepened: Black Americans, per capita, hold just one sixth of wealth as compared to their white counterparts. The effects of this gap can be seen and felt in multiple ways — from homeownership, to accumulated savings, to opportunities for investment, to education, to small business ownership.
A Better Future: Building Economic Power
At Common Future, we’re actively fighting against the racial wealth gap by imagining and creating a future where people, no matter their race or ethnicity have power, choice, and ownership over the economy. Since 2001 we’ve elevated the solutions of more than 200 community wealth building institutions across the country, and in doing so, we’ve shifted over $280 million to BIPOC communities. Our framework — incubate, co-create, fund, and influence — represents our approach to backing and building ventures that restore community wealth while equipping people across sectors with the knowledge and connections they need to do the same. We work with people who hold enough imagination and courage to rethink our economy — all while building the power and influence to bring to life initiatives that build power and ownership in BIPOC, rural, immigrant and working class communities. We then influence key sectors — across philanthropy, impact investing, government and corporations. Here are a few examples of what that looks like in action:
- Character-Based Lending—In 2020, we launched an $800,000 fund designed from the ground up by, with and for BIPOC businesses and ecosystems often ignored by traditional financial institutions. We reached out to community groups who drove the process of how terms would be set for loans and who would be referred — that would not require collateral or credit checks; range from 0–3% interest and be around $30,000; and be repaid within 3–6 years. Check out Yes! Magazine’s in-depth feature.
- The Common Future Policy Incubator—Reacting to the need for new leadership to bring us forward, we launched our 2022 Pilot Incubator to work with leaders who are action-oriented, community-minded and equity-centered. Instead of more traditional validators, we prioritize grounded experiences and a passion for systems-change solutions. Learn how we’re building a different kind of think and do tank.
- Revenue-Based Financing—We’re incubating a National Revenue-Based Financing pilot program, with on-the-ground partners in St Louis, MO and Tucson, AZ. This pilot seeks to provide capital with flexible and non-extractive repayment rates, without the use of credit scores or fixed terms. Stay tuned for more.
- The Common Future Action Lab—Common Future and the WES Mariam Assefa Fund are thrilled to be partnering to launch our first Action Lab focused on participatory investing. The Action Lab is a 12-month learning and action initiative in which funders will learn about, experiment with, and co-create new models and strategies for participatory investing within their own institutions and through a collaborative fund. Learn more about this exciting pilot.
- Radical Pragmatism—This guiding framework by Common Future and Liberation in a Generation names how we can move from an oppression economy to an equitable, power-full one. Radical Pragmatism aims to transform and upend systems of oppression and harm while acknowledging current realities and opportunities to shift power toward that vision. Learn more at radicalpragmatism.org.
- T.E.A.M. — Tools For Equitable Acquisitions in Manufacturing—Launching in the next month, this partnership between Concerned Capital, Urban Manufacturing Alliance and Common Future to build deeper technical expertise around ownership transitions, and to create more opportunities for local business preservation and high-wage job retention while moving more existing businesses to BIPOC ownership. We have exciting studies and plans for how this project will evolve over the next three years.
And through our work to transform the economy, we have spent a good deal of time and effort on what equitable work practices look like internally. We’ve launched pilot projects like our four-day work week, which has since become our official policy. We’ve also taken a hard look at how we compensate our employees, offer parental leave, and address cost of living increases. In doing this internal work, we actively hold the burdens overwhelmingly felt by our BIPOC staff, so that they are better equipped to participate in our economy, and dedicate their energies toward fighting the racial wealth gap.
At the end of the day, we have much to do. We’re up against an economic system that has been fundamentally unjust since its inception 250 years ago and did not end 160 years ago when slavery was abolished. We honor Juneteenth, and the celebration of emancipation by building an economy where everyone has power, choice, and ownership. We know these challenges are huge. Some would say impossible. But this is why we do what we do.