Over the past years, there has been a growing movement of advocacy surrounding the social injustices and oppression faced by African Americans. While many are very vocal about the social injustices of our world, some are often much more hesitant to discuss the economic disparities faced by African Americans and, more specifically, the government’s role in absolving them. The federal government not only played a large role in the creation of the racial wealth gap, but also its upholding over the last several centuries. Following 246 years of slavery, the fight for economic equality for African Americans has been combatted by a shameful system of oppression, including Congress’s poor handling of the Freedman’s Savings Bank, the destruction of Tulsa’s Greenwood District, Jim Crow Laws, the disclusion of African American veterans from the GI Bill, redlining, and many others racist skeletons that America hides in its historical closet. Reparations were never made for freed slaves—in fact, they were only made for the nation’s slave owners. Gen. Sherman’s famous promise of “40 acres and a mule” that would have redistributed nearly 400,000 acres of land to freed slaves was overturned by President Johnson (Merida). Under President Lincoln, slave owners were paid $300 per freed slave as compensation for their loss of income (National Archives). Martin Luther King calculated that, if America had kept its promise of 40 acres and a mule, it would have been worth $800 billion in the 1960s (Conover). Today, estimates of this promise’s worth range from $6.4 to upwards of $59 trillion (Rancourt). This amount, of course, is unrealistic to demand of the federal government, but it illustrates a greater point; because of their involvement in the creation of this wealth gap, it undoubtedly falls upon the shoulders of the federal government to help alleviate it, and the best way to combat this widespread issue is through a guaranteed minimum income of $1000/month, whose recipients are determined by the cost of living in their respective locations.
A guaranteed minimum income, or G.I., is similar to a universal basic income, which has been gaining traction among voters in recent years. Though the two programs are closely related, they are not identical. While a UBI provides federal payments to all, G.I. targets people who are living below the poverty line and who have inconsistent or no income. It provides cash payments to specific, targeted communities with the express goal of diminishing income inequality. Compared with UBI, funds are more effectively and deliberately invested into poorer, disproportionately Black communities in order to fight the racial income gap that has remained stagnant for many years.
One of the main concerns surrounding a G.I. is that, if a person’s income increases, they may suddenly make too much to qualify for the welfare benefits on which they rely. At a certain point, there is no incentive to increase your income out of fear of losing your benefits. To combat this, a set income amount will not be set at the federal level. Deciding who qualifies for G.I. is dependent upon the cost of living in the recipient’s county. If a person’s income is below the cost of living in their specific area, they qualify for the full $1000/month. However, instead of cutting receivers off if they make anything above that amount, there would be a phase-out rate of 60%. For every additional $1000 that a person makes above the annual cost of living, their monthly check would decrease by $50, or $600 annually. This way, people who are experiencing an increase in income can gradually wean off of their federal dependency rather than losing it all at once. There is still incentive to earn more as there will never be a drastic loss of welfare benefits.
Establishing a G.I. would do tremendous things for the racial wealth gap, as it strives to lift those in poverty, a demographic that is disproportionately Black. In 2019, while the poverty rate for white Americans was only 7.3%, the rate for Black Americans was a staggering 18.8%. According to the 2019 U.S. Census, “the share of Blacks in poverty is 1.8 times greater than their share among the general population,” representing 23.8% of the poverty population but only 13.2% of the general population (Creamer). Some economists predict that providing $1000/month to impoverished Americans would reduce the poverty rate of Black Americans from 23.8% to roughly 1% (Ghenis). The benefits of government payments to Americans have become apparent during the COVID-19 pandemic in the form of stimulus checks. In a recent interview with 60 Minutes, Federal Reserve Chairman Jerome Powell recalled his aggressive advocacy for a stimulus bill, saying that, if it hadn’t been for the checks, “[the pandemic] would have been so much worse,” (CBS). The COVID relief bill put money in the hands of the people who desperately needed it and, as a result, spent it all, stimulating the economy.
Though establishing a G.I. may initially seem like a colossal expense to the U.S. government, this would not be the case. A G.I. could take the place of many anti-poverty programs, including food stamps ($76 billion), housing assistance ($49 billion), and the Earned Income Tax Credit ($82 billion), that annually cost around $1 trillion, far exceeding the cost of establishing such a program (Lant). It could also be funded by implementing a value-added tax of 10% on the goods and services that a company produces, likely generating between $700 and $800 billion in annual revenue (Gale). A value-added tax would be limited to firms whose gross receipts amount to over $200,000, exempting a large majority of America’s small businesses.
The federal government has long abandoned the economic needs of African Americans, and the reparations made to this historically abused, dehumanized, and exploited population have been both minimal and ineffective. After centuries of this massive, stagnant disparity, it is time that the U.S. takes responsibility for the consequences of its long, oppressive history. A guaranteed minimum income puts money directly into the hands of the people who need it most, fighting not only against the racial wealth disparity but poverty as a whole.
Works Cited
Conover, Ted. “The Strike That Brought MLK to Memphis.” Smithsonian Magazine, Smithsonian Institution, 2018, http://www.smithsonianmag.com/history/revisiting-sanitation-workers-strike-180967512/.
Creamer, John. “Poverty Rates for Blacks and Hispanics Reached Historic Lows in 2019.” The United States Census Bureau, 15 Sept. 2020, http://www.census.gov/library/stories/2020/09/poverty-rates-for-blacks-and-hispanics-reached-historic-lows-in-2019.html.
“The District of Columbia Emancipation Act.” National Archives, National Archives and Records Administration, 5 Apr. 2019, http://www.archives.gov/exhibits/featured-documents/dc-emancipation-act.
“Fed Chairman Jerome Powell: The 2021 60 Minutes Interview.” CBS News, CBS Interactive, 11 Apr. 2021, http://www.cbsnews.com/video/jerome-powell-federal-reserve-economy-update-60-minutes-2021-04-11/.
Gale, William G. “How a VAT Could Tax the Rich and Pay for Universal Basic Income.” Brookings, Brookings Institution, 30 Jan. 2020, http://www.brookings.edu/blog/up-front/2020/01/30/how-a-vat-could-tax-the-rich-and-pay-for-universal-basic-income/.
Ghenis, Max. “How Universal Basic Income Would Affect the Black-White Poverty and Wealth Gaps.” The UBI Center, A Medium Corporation, 19 June 2020, medium.com/ubicenter/how-universal-basic-income-would-affect-the-black-white-poverty-and-wealth-gaps-452e2af1497b.
Lant, Karla. “Here’s How We Could Fund a UBI Program in the United States.” Futurism, 3 May 2017, futurism.com/heres-how-we-could-fund-a-ubi-program-in-the-united-states.
Merida, Kevin. “Did Freedom Alone Pay a Nation’s Debt?” The Washington Post, WP Company, 23 Nov. 1999, http://www.washingtonpost.com/wp-srv/WPcap/1999-11/23/047r-112399-idx.html.Rancourt, Denis. “Calculated MINIMUM Reparation Due to Slave Descendants: $1.5 Million to Each Black Citizen of the USA.” Activist Teacher, 18 Jan. 2013, activistteacher.blogspot.com/2013/01/calculated-minimum-reparation-due-to.html.
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