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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning, again, everyone. We'll have a Black History Month conversation now about a fundamental fact of persistent inequality that should probably be central to all public policy. It's the racial, wealth and income gap. Here are some stats from the Federal Reserve Board. You can find these easily online at various websites associated with the Fed. I'm going to use pre-pandemic stats. Let's say the pandemic has made things even worse, but if we assume some of the effects of the pandemic are temporary and will fade, here are some stats from the Federal Reserve Board from 2019.

The median annual income for white families $70,000 a year and I'm rounding. The average income for Black families, median income, $40,000 a year. This many decades after the Maine Civil Rights Act were passed, that's not okay. Something's not working that was supposed to work better. If you think a $70,000 to $40,000 a year ratio for income is bad, don't drive off the road, here come the stats for wealth. The overall number is nine to one, the ratio of family wealth.

Around $20,000 in assets for Black families, close to $180,000 for white families. Nine to one. Obviously not okay, and something that public policy should address. Concerningly, if you look by generation, it's getting worse, not better. Among Americans born during World War II or before, the wealth gap ratio is about four to one, for Baby Boomers, it's around seven to one and for Millennials, white families, median wealth is 19 times higher than for Black families. Again, these are all stats being cited by the Federal Reserve Board.

The Fed cites four main historical reasons as underpinnings that run back to slavery days, of course, but also since then, unequal ownership of land, access to housing, access to education, and access to credit. What's a country that supposedly prides itself on progress toward equality all the time to do? Let's talk about some options with Kyle Moore. He's an economist with the progressive think tank, the Economic Policy Institute. He's specifically with the institute's program on race, ethnicity, and the economy. Kyle, thanks a lot for coming on. We really appreciate it. Welcome to WNYC.

Kyle Moore: Glad to be here. Thanks for having me on, Brian.

Brian Lehrer: Black listeners, with an eye on the roots of your income and your assets, you'll get first dibs for questions and family stories, but anyone may call 212-433-WNYC. Anyone wants to do some oral history from your own family story of what might have held you back economically or discuss policy options for actually achieving wealth and income inequality by race in the United States? 212-433-WNYC.

Be part of the conversation, 212-433-9692, or tweet @BrianLehrer. Kyle, can I ask you first if you basically agree with the Federal Reserve Board's four big historical underpinnings contributing to wealth inequality? I know we could do a whole show on each, obviously, but ownership of land, access to housing, access to education, and access to credit.

Kyle Moore: I think that's right. I think those four domains are really places where, throughout our history, Black folks have been denied access to opportunity to participate. I think housing really sticks out in my mind as something that was a huge area of growth of wealth for white families throughout the 20th century. We basically, through policy, built a white middle class of homeowners and wealth holders, and that just hasn't been done for Black folks in the United States in the same way.

Since slavery, folks have not only been used as capital, that was slavery, Black folks were being used exclusively as capital to build wealth, but after that were just denied access to many of the avenues by which wealth would be grown in the first place. That's never really been addressed, so it's not a surprise that Black folks are lacking in these areas and are currently wealth poor in comparison to their white counterparts.

Brian Lehrer: Can you talk a little bit more of the history of housing exclusion in this respect? We've talked about this on the show before and some people in our audience know it very well, but a lot of people don't. What are some of those government policies that you refer to that helped white families in the United States build wealth through homeownership that didn't help Black families?

Kyle Moore: Sure. It was really access to mortgages. The Federal Housing Authority in the 30s and 40s created these programs that really allowed white families to get access to mortgages in particular neighborhoods that have appreciated in value over time, and Black folks were not allowed to take advantages through programs or policies that folks know about these days called redlining.

Even when those policies were not racially explicit as they had been, there were, of course, things like racial covenants that have explicitly said that folks couldn't sell homes to Black homeowners, but even when it wasn't racially explicit, redlining was carried out in such ways that denied mortgages being issued to folks living in certain neighborhoods, and those neighborhoods were, of course, majority Black neighborhoods.

You had instances like Levittown where white folks were granted access to homes in those neighborhoods that were middle-class homes that have appreciated in value quite a bit since the time that were issued. I think Richard Rothstein's work has really covered that well, and just showed how we, again, as I said, just built a white middle class of homeowners and wealth holders. That is the way that we build wealth in the United States, through policy in these ways.

I think the other area where Black folks haven't been able to really build wealth in the same ways is through consistent employment because there's employment with benefits and access to retirement benefits. All these areas are lacking for Black folks. It's a shame because wealth is extremely important. I'm sure we'll talk about this [unintelligible 00:07:14] as well, but it's a problem that there's a racial wealth gap.

The reason it matters isn't just out of a concern for wanting things to be equitable or just equal. We live in a country where wealth is necessary for a lot of flourishing in ways they may not be in other places. We don't have free access to health care. We don't have free access to education. It is such that without wealth, you really don't have the agency, you don't have the protection that we might have had we had a strong social safety net in this country. It really matters.

Brian Lehrer: Are the stats that I gave there by generation in the intro consistent with your understanding? Is the racial wealth gap actually getting worse from the pre-Boomers to the Boomers to the Millennials?

Kyle Moore: I can see that. It's consistent with what I've seen, just thinking about the fact that Millennials-- The housing market is increasingly difficult to get into, and we've seen phenomenon where corporations are purchasing homes at a large rate. Folks will remember during the pandemic how difficult it was. You have to think this is the time in which the Millennial generation would be moving into homes, but we saw there's very obviously a housing shortage.

The housing shortage is impacting the extent to which folks can get access to homes. Of course, the families who are going to be least able to do that are those without accumulated generational wealth such that a parent can help with the down payment in purchasing a home, especially when it was getting to a point where folks were coming with large cash offers to be able to get in.

Black families are just not in the position. Again, we talked about that nine-to-one wealth gap at the beginning. Black folks are just not in the position to be able to draw on their some accumulated amount of wealth to pass on to the next generation to allow them to get a down payment to continue to build wealth. That's why wealth is cumulative across generations. It makes sense that the racial wealth gap would continue to increase without some direct policy intervention to do something about it. If we just allow this to continue, wealth builds on wealth, and if you don't have it, you won't be able to build it.

Brian Lehrer: We'll get into some of your specific policy recommendations as we go. Listeners, if you're just joining us, this is Black History Month segment on the persistence and really the increase over generations now of the ratio wealth gap in the United States and what to do about it with Kyle Moore, an economist with a progressive think tank The Economic Policy Institute. Our lines are full with people who want to either tell some family stories or ask you some questions. Let's take a phone call right now. Jason in Beacon, you're on WNYC. Hi, Jason. Thanks a lot for calling in.

Jason: Hi there. Thanks for having me. I'll try to be brief. I grew up in a place where I was as one Black family with lots of white people. I went to college. I was one of the few people. I'm 47 years old. I was one of the few people who, the second person, my entire family, who went to college. I've grown up watching and I've told the screener pivotal moments in life. When you get ready to go to college, when you're finished with college, when you get married, when you want to buy a first house.

All of my friends who I know from college, all of my, well to do and I hate to say it, but my white friends, they faced these moments without any stress or far less. Basically, someone was there to help them to put a down payment on a house to pay for getting married to go to college. I finished my student loans two years ago and graduated in 2000.

I guess all I do and I want to say in short is that if you really look and see all of the Black people don't have that much to look forward to and you see it on people's faces when they're in the subway, when they're at their retail jobs. They don't pay enough money just to get by. I think that something like a tax credit or something about home ownership is the only way that it's going to ever be equal. Thanks.

Brian Lehrer: Jason, thank you very much. I'm going to go right onto another caller. Here's Anthony in the Bronx. Anthony, you're on WNYC. Hi there.

Anthony: Hi, Brian. Thanks for taking my call. I want to mention that during the Civil Rights Movement and when affirmative action finally kicked in after Johnson signed all the bills during the '70s, Blacks were going to school in record numbers. Afterwards we started getting both the unionized blue-collar jobs, the white-collar jobs.

We started opening up a lot of doors and closing that particular gap that we're talking about. Now afterwards, early thereafter, during the '80s, all of a sudden, we have a crack pandemic. Drugs are flooded in through our neighborhoods. Somehow or another, we started drinking the Kool-Aid and we started losing our legacies, our general aspirational wealth what potential generational wealth, and our communities.

Brian Lehrer: That was 40 years ago. Crack as an epidemic is pretty long gone, right, Anthony?

Anthony: It's still here, actually. You see what's going on right now in our communities and spilling over other communities, young kids, who were born crack babies and they're no longer taking their medication and it's affecting society and the home. That's a whole another story. The civil fact is that we were gaining ground at one particular point and a lot of us couldn't get the loans and if you look at certain communities like Mount Vernon and Upper North and Bronx, there are a lot of Black homeowners up there, a lot of them. Think circumstances happened.

Brian Lehrer: Anthony, thank you very much. We appreciate your call. Well, Kyle, any thoughts on those first two calls?

Kyle Moore: I do have some thoughts. I guess I'll start with Anthony's comment just since you mentioned the '80s. I think we really don't pay attention to, this is a period where I think it's really important to think about Fed policy. I think when folks talk about the '80s, they talk about the crack epidemic. I think people don't often think about the fact that at the beginning of the '80s, we were experiencing inflation.

Paul Volker, who's the head of the Fed at that time, decided he was going to slay the inflation dragon by raising interest rates to 20%. What that did was immediately cause a severe recession where Black unemployment rates rose to something like 21%. When Black unemployment rates rise to that extent, they fall slowly. You're in a situation where one out of five Black job seekers are out of a job that has severe. Unemployment has severe impacts on mental health, on family stability, on all these things.

I think it's just very interesting when the opioid epidemic happened many years later. The folks who are most effective were white folks. People were very quick to understand that there are going to be implications or that there were perhaps economic roots to that psychosocial epidemic where people are abusing these substances. I think you can't separate what happened with the crack epidemic and what happened economically for Black folks throughout the '80s. That's that halting of progress with that severe recession that happened at the beginning of the '80s.

Brian Lehrer: Are you worried about the raising of interest rates again right now in terms of increasing racial economic disparities?

Kyle Moore: I think that J Powell, at least in the years prior to Inflation Rising, had been very good about listening to the communities that would possibly be affected by fed action and trying to incorporate those concerns into their policy choices. I hope that they continue to do that. They haven't raised interest rates severely in a way that Volcker did, but I think they're monitoring it and should continue to do so. Just to make sure that-- Because again, if a recession is caused, Black folks are going to suffer disproportionately from that. I think they should continue to monitor that and not be too hasty in raising interest rates to simply--

Brian Lehrer: One other thing relevant to Anthony's call before we go to a break and then turn the page and really hear about some of your proposed solutions to racial economic disparities. I read an article by you preparing for this in which you wrote, we must disabuse ourselves of the idea that the way to fix racial economic disparities in this country is to fix Black people, as you put it, to train them more, to get more of them into college, things like that.

Let me ask you to elaborate on that because a lot of people might think, well, those don't equate to racism. It's not saying Black people are inferior in any way to say, helping more people get college degrees at equal rates to whites and otherwise trained for prosperous careers. Those might be ways of correcting for structural inequality. What's missing from the way that I just described that, that you phrase it as we shouldn't focus on fixing Black people?

Kyle Moore: Again, I am all for education. I think education is great. It improves folks' lives at an individual level, for sure. I think what's important is to understand just how racial disparities emerge. Of course, everyone's lives can be improved by more education, more access to training, things like that. It's just not going to solve this particular problem because this particular problem comes from a lack of access to opportunity to build wealth, for example, if you're talking about the racial wealth gap, it comes from experiences of discrimination in the labor market.

It's not as if Black folks have not even somewhat argue over-indexed on education. Black folks do pursue education and even when they do do so, we can see that Black folks and white folks with equal education still have disparate outcomes in terms of wealth, in terms of income, in terms of access to high-prestige jobs. It's simply that the evidence has shown us that pursuing these individualistic approaches to closing these group gaps just hasn't done so over time.

Brian Lehrer: Not by itself. You would want an equal, let's say, college degree rate across racial lines, wouldn't you as a core goal?

Kyle Moore: Sure, I would love for everyone to have equal access to education at a high quality. I think that's a great thing to do. It's just not going to close the racial wealth gap. That's where I try to draw distinctions, like what's going to close racial, like things that are good for everyone are also going to be good for Black folks and vice versa.

Actually things that are good for Black folks are probably going to be good for the entire economy. That's a separate question for whether or not we're going to close gaps if we want equity versus just improving conditions for folks. They're playing things we can do to improve conditions and we should do those things. If our goal is equity, we need to take a more proactive approach.

Brian Lehrer: All right, so we're going to do that right after a break. We're going to hear what economists, Kyle Moore from the Economic Policy Institute proposes to really close the racial economic gap in this country. We'll take more of your calls, stay with us.

[music] Brian Lehrer on WNYC. We are in a Black History Month segment on the persistence of the racial wealth gap in the United States Income Gap two, but it's about 70,000 a year Median income for whites to 40,000 a year Median income for Black households, according to the Federal Reserve Board pre-pandemic stats, the wealth gap is nine to one, 10 to one according to the Fed. This is almost 60 years after the main Civil Rights Acts were passed.

Something's not working. Something different has to be done. We're talking to Kyle Moore, economist from the Economic Policy Institute think tank, and taking some of your phone calls with some of your family stories and proposed solutions. Let's take another call. [unintelligible 00:20:56] in the Bronx.

Caller: Hi. I am so happy to hear you guys because I've been struggling with my daughter. I'm one of the New Yorkers. I'm from New York, born and raised. I came up in the golden era of the public school system and I've had to put my daughter in three different elementary schools because the education was not onto par. She, 30 kids fell behind in her last class because all the teachers quit and my daughter and 30 other students fell behind.

Then COVID hits and she's behind again. We sacrificed then two days before school started in September, decided to get her out like our friends have been doing in New York City. We got her out. I travel eight hours one way and back. She's outside of Buffalo and she is thriving. One semester they got her caught up as opposed to the budget cuts. They cut all of the services to catch kids up in her present school.

She has a double block of math, a double block of ELA, and a study hall after school where the kids have access to their environment and they have all the kids who never opened a computer their entire two years of COVID altogether in a classroom and have a program for them to catch up in one semester, she got caught up. Meanwhile, in New York City, there is presently no plan for the children.

I've been in education for 20 years. I know deputy superintendents, I've spoken to my council member to get her in a good school and every time, three times it didn't work. This was her starting junior high school. She's 12 because she got left back and she's in sixth grade and she started junior high school this year. I could not, as a parent, my husband and I could not take another chance to continue to negotiate and fight for our kid with a system that's completely broken.

Brian Lehrer: Is that a public school that she's in up around Buffalo?

Caller: It's a public school that she's in outside of Buffalo and Orchard Park where--

Brian Lehrer: What's the moral of the story for you, [unintelligible 00:22:50], on a policy level?

Caller: On a policy level, the moral of the story is on a policy level for equity to be trickling down, they have to put their money where their mouth is. There is no funding. My daughter's public school in East Harlem got cut $400,000 and this is Central Park East's two elementary school and she was in Central Park, East's one elementary school. They had an exodus of teachers. They had budget cuts.

The principal didn't even have a secretary, which you can't even run a school without a secretary. They had no infrastructure and nothing to catch any of the kids up. I had to do what I had to do. The moralist story is there's no plan for our children. We need policies that are actually equitable. They talk about equity, but if you don't back it with money, it doesn't mean anything.

Brian Lehrer: [unintelligible 00:23:44], thank you so much for your calling. Good luck to you and your daughter. Marty in Greenwich, you're on WNYC. Hi, Marty.

Marty: Thank you for taking my call, Brian. First-time caller, longtime listener. I'm calling to provide somewhat of a different perspective as a Black male who worked in the '90s and early 2000s in the financial arena. I have a master's degree in finance. I'm licensed in real estate. I'm licensed in securities. However, I reached the level in corporate America where I looked around and I was the only one there. Unlike others who may have been able to persist. I didn't feel I was tired. It seemed like a drain or a weight. I left corporate America and I'm in a small business. I make substantially less money, but I'm not-

Brian Lehrer: Happier

Marty: -confronted. I'm happier. I don't have--

Brian Lehrer: Oh, you're not confronted with racism that makes you tired as you put it in the workplace every day.

Marty: Well, what I would like to say is not always racism, but ignorance of, you don't have to be an expert in Black history. I was born in the '50s in Florida. I went to segregated schools. A discussion came up some way about issues when I was on a job and the people couldn't believe that I actually went to a legally segregated school. They had no belief in that or, they couldn't believe it. I've watched as my children have gone on, I was fortunate enough to get one. My children went to Ivy League schools and got great education and I see the difference.

Their kids, they're more aware, they are more accepting. I do business over the phone all across the country. Quite frankly, I would lose probably a third of my clients if they knew I were Black. I based out on the conversations that may pop up, if I ask someone how things are going I have clients stilled in the South, Southwest. I get all sorts of things. Oh, I was even told by someone in Michigan that they didn't understand how I continue to live in the New York area because of all of the crazy riots from Black Lives Matter. I was like, I didn't even know what they were referring to.

Brian Lehrer: Yes.

Marty: In terms of what.

Brian Lehrer: You're a focus group of one. Of course, it's all been demonstrated empirically so many times. Do you have ideas about policy that would really close the racial wealth and income gap?

Marty: I believe it's a function of information. I really honestly believe part of the problem we're having nationally, we need to push back with facts. I'm not looking for anything from anyone. However, there is story or stories of perspectives. If you respect other people's perspectives, I think we're going to be in a better place. I see a lot of that with the next generation.

Brian Lehrer: Marty, I'm going to leave it there for time. Thank you so much. Please call us again. Kyle, interesting calls there, but I want to run right ahead to the kinds of solutions that you discuss in your writing that might be more effective than what's been done in the past for closing the racial wealth and income gap. You mentioned, for example, labor union rights, a $15 minimum wage at least nationally guaranteed healthcare for all of Federal jobs guarantee.

Asset building programs like baby bonds and you write that a direct reparations program may be necessary to even out assets more. Let's go through some of those. On labor union rights, your article mentions one piece of legislation by name that President Biden also mentioned in his State of the Union address this week, the Pro act. Want to talk briefly about how much you think that would matter?

Kyle Moore: Yes, I think the Pro act is something that makes sense for all workers. It's going to make it make it easier for workers to come unionized at their jobs. I think being able to have representation in the workplace is extremely important on a number of fronts. Not only just financially speaking in terms of being able to get access to the benefits you need and a decent wage, a decent salary, decent pay trajectories, things like that but also just having a voice in the workplace to talk about the conditions of your work.

That's the thing that, I've seen in my research that Black folks on the job, particularly older Black folks, often aren't in position to be able to say, the conditions of this work are becoming onerous for me. I need to downshift, I need to do a little bit less. These movements are hurting my body. Things like that. I think having access to representation in the workplace through union gives you that access, gives you that latitude to be able to speak out and talk about the conditions of your work. That's going to improve a lot of things for a lot of workers, Black workers in particular because they're exposed to worse working conditions.

Brian Lehrer: How about a federal jobs guarantee? That's a Green New Deal item, right?

Kyle Moore: I think it is a part of the Green New Deal. Federal job guarantee will eliminate the problem of unemployment. I think Black folks have continuing to experience unemployment at a higher rate than white folks. It's almost consistently two to one Black unemployment rate or white unemployment rate whether you're in a recession or not in a recession. I think it's important for folks to understand this, that how people hear that and they think, oh, Black folks just don't want to work. They're lazy.

That just relies on a misunderstanding of what the unemployment rate is. Everyone who's under the unemployment rate is indeed looking for work. It's the fact that when Black folks are looking for work, they are just simply much less likely to be hired for that work due to experiences with discrimination. If you have a federal job guarantee that eliminates that problem.

It eliminates the mental health stress that goes along with unemployment. It allows folks to have access to jobs, again, if it's a federal job, guarantee those jobs come with certain standards. It improves the labor conditions at the floor of the labor market, which will put pressure on other firms to improve their conditions as well. It make things, again, these are all policies that are universally good but would disproportionately benefit Black folks

Brian Lehrer: Baby bonds. That tends to be associated with Senator Cory Booker who's been on the show talking about that. In theory, every child given a certain amount of a bond at birth in the United States. When they get to age 18, there's a pot of money there to go to college with or otherwise start your adult life. How about direct reparations which you mentioned, those have been in the news most recently because Ron DeSantis seemed to have bullied even discussion of reparations out of the AP African American studies curriculum. Do you, as an economist, have a take on what reparations program would be doable and effective?

Kyle Moore: I do. First, I just want to say on baby bonds. This is a policy that's put forward a lot by one of my mentors, Derek Hamilton. This is a policy that I think can do a lot of good in terms of improving the wealth position of Black folks in this country because it does, as long as it's wealth targeted towards folks who are wealth poor. That's a policy that can again, improve conditions of wealth for Americans. Generally speaking, it's something we should do, but it is something that is will disproportionate benefit Black folks. Direct reparations, I think, are the set of policies that are necessary to actually close the racial wealth gap. [unintelligible 00:32:32]

The question is like, what sorts of particular reparations plans are going to be necessary or useful? I think as William Darity and Kirsten Mullen talk about in their book From Here to Equality: Reparations for Black Americans in the 20th Century, the plan that is going to close the racial wealth gap on a national level has to come from the federal government.

This has to be a federal reparations plan for a number of reasons. One, the federal government is the institution that has the capacity to close the racial wealth gap. Again, it's going to be through direct transfers of wealth. Also, they are the culpable party for the experiences for which reparations will be paid. That's to slavery. In most configurations of reparations plans.

Brian Lehrer: They being the federal government, right?

Kyle Moore: Yes. They being the federal government. Exactly. They are the party that allowed and supported the institution of shadow slavery. The failed effort of reconstruction after slavery, Jim Crow. Also, some folks consider mass incarceration to be something there should be reparation efforts for. It would be a federal program of transfers of wealth towards the descendants of those who had experienced those things.

I think it's important to consider. It's not only that they were denied or they were exploited, they were used as wealth and they were denied access to wealth. What they've also been denied is the accumulated wealth from the wealth they would've had appreciating over time. All of that is what is captured in what the racial wealth gap is.

Brian Lehrer: Yes. We have a tweet from a listener tweeting under the name, let Every Citizen Vote who writes, "If the former slaves had actually received 40 acres in a mule, imagine what that land would be worth today."

Kyle Moore: Right, exactly. They were denied that access. All that is captured in what the racial wealth gap is today, that nine to one number you're talking about that's captured there.

Brian Lehrer: In our last minute, Kyle, do you see any political possibility for doing any of the things we've just been discussing in this last stretch of the show to really meaningfully closed the racial wealth and income gap? We don't even hear Democrats talk about these things all that much although some.

Kyle Moore: I think the strength that we have right now is that the facts are there the plans exist and at least post-2020, there was a lot of energy and interest in exploring what those are. I'm encouraged by what we're seeing in California where they have a reparations task force and they're seriously considering what it would take, seriously investigating what a reparations plan would look like for that state.

Their cities, Evanston, Illinois, St. Paul, Minnesota, Providence, Rhode Island, that are all working on creating and implementing programs that are under the auspices of reparations. These are not federal plans. I think if we're going to close the racial wealth gap, it has to be a federal plan. That being said, there are things happening at the sub-federal level that are interesting and encouraging to me.

As long as those plans follow some guidelines that make sense, as long as they continue to acknowledge and include an apology and acknowledgment of the harm done, as long as they are about material redress and not simply symbolic actions, as long as they're specific, as long as they don't try to subvert the federal government and or try to absolve the federal government of responsibility. As long as they commit to the structural change and have a commitment to ongoing work, I think those plans can be useful that are happening at a federal level. That's a useful thing, and I'm excited about.

Brian Lehrer: We're going to follow up on this show and look at what California is doing in that respect and other localities. I want to thank our guest for this conversation. Kyle Moore, an economist with the Think Tank Economic Policy Institute. Kyle, it's been really informative. We could have gone on all afternoon with calls. There were so many people wanting to tell their personal stories and talk about policy. Let's follow up sometime in addition to the other segments that we're planning on this. Thanks very much for coming on today.

Kyle Moore: Thanks for having me. I would love to be back.

 

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