California, New York reparations efforts are counterproductive - a federal program is best, expert says

By Greg Robb

The cost of a nationwide reparations program now approaches $16 trillion, William 'Sandy' Darity says

Efforts at the state and local levels to compensate descendants of enslaved people with reparations are counterproductive, a leading reparations scholar said - because they fall short of what a federal program could accomplish.

Meanwhile, the total cost of such a federal program continues to rise, said William "Sandy" Darity, an economist and professor of public policy at Duke University. A nationwide plan to close the racial wealth gap will now cost somewhere in the range of $16 trillion, up from an estimate last year of $14 trillion, Darity said.

"The longer we wait, the larger the bill will get," Darity told MarketWatch in an interview on the sidelines of the American Economics Association's annual conference, held in San Antonio.

About 30% of U.S. adults support reparations for descendants of enslaved people, according to a Pew Research Center poll.

Proponents of reparations say the descendants of enslaved people are owed compensation for the legacy of slavery, Jim Crow-era racial segregation, Black property loss and discriminatory public policy that systematically prevented Black Americans from creating wealth. There's considerable debate on the scope, size, eligibility criteria and forms of compensation involved, and proposals have spanned a wide range of approaches, including housing grants, direct payments, business loans and a national apology.

The median wealth of a typical white family was $285,000 in 2022, according to the latest Federal Reserve data, released last fall. By comparison, the median wealth among Black families was $44,900.

A handful of states are considering reparations for eligible residents, and reparations efforts have also gained traction in several cities.

After two years of work, California's first-in-the-nation task force last summer issued a more than 1,000-page report recommending monetary compensation for descendants of enslaved people for health harms, housing discrimination and discriminatory policing, among other policy proposals. State lawmakers are now expected to debate legislation informed by the recommendations.

Darity was among several economists and policy experts who served as consultants for California's task force.

From the archives (June 2023): California reparations enter a new 'battle': getting lawmakers and public on board

New York Gov. Kathy Hochul also signed legislation last month to create a commission to study potential reparations, while Illinois formed a commission earlier in 2023 to research reparations and present best practices to lawmakers.

Darity, however, said he thinks of state and local governments' efforts as piecemeal. Each program will have different eligibility standards, he said, and "what gets paid out will give wildly different outcomes to recipients based only upon where they live."

If reparations programs are left up to states and localities, there will be communities that do nothing at all, he added - and opponents will use such efforts to argue against a nationwide program.

What's more, states cannot afford to finance the elimination of the racial wealth gap on their own, Darity said. He estimated that the combined budgets of all state and local governments total less than $5 trillion.

"I feel very strongly that this is necessarily a federal project," Darity said.

The economist said he would support a local effort only in Washington, D.C., because the federal district can make an appeal for restitution directly to the federal government. This could establish a precedent on a nationwide basis, he said.

About 30% of U.S. adults support reparations for descendants of enslaved people, according to a Pew Research Center poll conducted in October 2021, including 77% of Black respondents and 18% of white respondents. A separate University of Massachusetts Amherst poll conducted in early 2023 found 36% overall support for reparations, including from 74% of Black respondents and 28% of white respondents.

For such a program to have a realistic chance of becoming law, Darity added, "there would have to be a very different Congress."

More from the archives (July 2023): An affirmative-action ban has devastated many Black Californians - including this councilwoman fighting for reparations

-Greg Robb

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