We Need to Fight the Racial Wealth Gap Like We Fight Climate Change
- Essential Common Future
If corporations and Congress can invest in stopping one major catastrophic trend, they can invest in stopping another
By 2042, the United States will be a majority-minority country — meaning that the sum of the those who identify as Black, Indigenous, Latin American, and Asian-Pacific Islander will make up the majority of the country’s population. These demographic shifts should be celebrated as the U.S. becomes an even more diverse and multicultural society. However, the country is also charging downward to another, less desirable inevitability: by 2053, forecasts predict that median household wealth for Black Americans will fall to zero, with those who identify as Latin American not far behind.
What’s At Stake?
A state in which the majority of the population has no wealth is an existential calamity for any society. No wealth means lives are cut short, preventable diseases are not treated, basic and fundamental goods we consume for survival, like food and clothing, are thoroughly commodified and popularized based on low prices, not because individuals want the best deals, but because they need the best deals to put any food at all on the table. Things like a trip to the ER are devastating events that can lead to poverty, homelessness, substance abuse and even suicidal ideation because there is no financial cushion to cover for these events, leading down a path of mounting debt. This cycle is self perpetuating — intergenerational wealth transfer does not exist and children start from scratch, homeownership evaporates, cementing an era of renting that is accompanied by looming fears of displacement.
Yet despite this, we often approach closing the racial wealth gap — or achieving racial wealth equality — with relatively small, intermittent interventions. Actions and pledges that are too often self-imposed and self-regulated, accountable to no one, except perhaps the next news cycle. Take investment screens that conflate a racially diverse workforce with racial justice or tax breaks advertised to spur economic opportunity in BIPOC communities, which may actually just accelerate gentrification. When we do see so-called new and bold pledges to invest in lower income BIPOC communities or local acts to try and right historical harms of structural racism, those efforts are often too small, too race-neutral, or too liberally labeling themselves reparations, to succeed at the scale society needs. It’s not that these things cannot help some, it’s that for the magnitude of the crisis, they are insufficient. With these efforts, our society’s race to zero wealth can feel inevitable. Until we decide it’s not.
If we believe that the racial wealth gap is, without intervention, an inevitable, existential threat to society, why don’t we approach it with the same urgency and collective intention that we approach climate change?
As we just saw in Glasgow, targets and collaboration around saving the planet, though falling short and lacking rigor, are still being approached at a global scale. The criticism of those efforts is easily summarized as: you don’t get points for trying. So then we must ask, why is it that we don’t look at the economic calamity that zero wealth posits the same way? If our society reaches a point in which we reach zero wealth for the majority, what society is even left? Decimated not only from wildfires and flooding, but food deserts and droughts of disinvestment. We should not be resoundingly praised for making racial wealth inequality a little less bad. Rallying around a fairly tangible goal — don’t let global temperatures rise above 1.5 C, reach an economy where there is no racial wealth gap — provides something to charge towards, rather than an inevitability we are scrambling to avoid. To avoid catastrophe, scientists know there cannot be a compromise on climate targets. What if there was no compromise on wealth inequality?
The Opportunity Ahead of Us
If, as with climate change, we dedicate ourselves to tackling this within our lifetimes, we have a chance to stave off the impending zero wealth precipice. What if we priced in the negative impacts on BIPOC individuals and communities for projects and investments the way we incorporate the cost of carbon? We think about projects and investments in terms of costs and benefits. Take the increasing integration of the cost of carbon: if a project is a heavy emitter of carbon, it will be considered more expensive. By that very logic, the racial wealth gap in America absolutely has a cost to society with a clear price tag: since 2000, U.S. gross domestic product has lost $16 trillion as a result of discriminatory practices in a range of areas, including in education and access to business loans, according to a study by Citigroup.
Instead of focusing mostly on private investments into BIPOC businesses, why not think about public spending on a new financial infrastructure? That is, if President Biden’s infrastructure bill is going to rebuild the grid for renewable energy, why are impact investors not working in concert with the federal government to build a new grid for how capital flows can generate wealth for those without it?
Rather than approach the racial wealth gap simply as something that is bad and far off, we must demand that society eliminate racial wealth inequality. Instead of requests to study the harms of structural racism by Congress or at corporations, we must demand that we reach a certain figure in pursuit of equal wealth, and when people reply with “let’s reduce the wealth gap by 30% in 30 years”, we refuse.
Better yet, what if we collectively agreed that racial wealth equality was non-negotiable? That this is a defining pillar of our society, for us and for our children. The global finance industry says it has $130 trillion to invest in efforts to fight climate change. What if we demanded those very investments for fighting the racial wealth gap? Not just untrackable, vaguely worded commitments, made in the wake of a tragic death. What if we refuse to accept anything less? — because this is what we believe in and it is the society we want to live in. If our audacity and actions continue to be governed by what we have already done, we will always be married to our past; inequality in perpetuity. The only way forward, is indeed, forward.