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How a basic income could deliver reparations for people of color

As the idea of basic income goes mainstream, can it be designed as a targeted program to remedy decades of economic disadvantages endured by people of color and women in the U.S.?

How a basic income could deliver reparations for people of color
[Photo: Frankie Cordoba/Unsplash]

In June, The Atlantic writer Ta-Nehisi Coates testified before Congress in support of H.R. 40, a bill that would establish a commission to study reparations: repayment for the wrongs inflicted on people of color in the U.S. through slavery and decades of racial bias and segregation. This was five years after Coates published his blockbuster article, “The Case for Reparations,” which cracked open the dialogue around the need to thoughtfully and deliberately compensate for the ways in which black people in America have been systemically disadvantaged.

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At the same time this conversation was evolving, another idea—basic income—was gaining momentum. The concept of a basic income revolves around giving Americans living below a certain income threshold a flat payment to supplement their earnings and lift them out of poverty. Because more than one in five black people live in poverty (2.5 times the rate of white people who do), politicians who are now advocating for basic income-like policies say that what they’re proposing is a step toward racial justice.

But could it go further? Could a basic income, designed deliberately, be a way to deliver reparations to people who have faced historic disadvantages in the U.S. economy?

In a new paper for the progressive think tank Roosevelt Institute, Jhumpa Bhattacharya proposes that a basic income program could be rolled out in a way that both boosts the incomes of people living in poverty, while also intentionally closing wealth gaps that have resulted from discrimination. Bhattacharya is the vice president of programs and strategy at the Insight Center for Community Economic Development, a research organization dedicated to advancing economic security. In her work, she focuses on understanding why wealth disparities exist in the U.S., and how to close them.

The racial wealth divide in the U.S. is profound. Today, the 400 richest white families in the U.S own more wealth than all black families and a quarter of Latino families combined. Since the 1980s, black wealth in the U.S. has actually declined by half.

Gender is the site of another extreme wealth divide. Women, in general, take home fewer earnings than men, but beyond that, they’re often shouldered with caretaking responsibilities like childcare that are not supported by the economy and consequently are a source of financial strain. Looked at through the lens of wealth—the assets one owns over what one owes—women are particularly disadvantaged compared to men. On average, women own just 32 cents to every dollar owned by men. In this system, women of color are especially disadvantaged.

As the idea of basic income gains popularity, Bhattacharya tells Fast Company it’s a sign that people in the U.S. are willing to confront the fact that many people are struggling to reach financial stability in the economy. But “any new idea like this has to have a reckoning in it around racial and gender inequality,” she says. “We have to be accounting for the way government-sponsored policies have led to the inequities we see today.”

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That might look like enacting a basic income policy with a tiered structure that corresponds to wealth status and historic disadvantage. Bhattacharya cites an idea conceived by Community Change president Dorian Warren (who’s also one of the cofounders of the Economic Security Project, which advocates for and enacts poverty-alleviating programs), called universal + basic income. The model calls for an additional payment to be given to black families on top of a standard stipend distributed to all families that qualify for the program. “The ‘plus model’ acknowledges that the wealth created in the U.S. is inextricably linked to black labor, sweat, and tears, and this community has never received the benefits created from that labor,” Bhattacharya writes. The additional payment could be determined by looking at the gap between white and black wealth and applying a proportional extra stipend to the lump sum. A similar approach could be taken to address gender wealth inequities, Bhattacharya says.

Reparations are often discussed as a one-and-done project: a single payment dispersed to black families to account for the cascading disadvantages of slavery. “But there’s no silver bullet for reparations,” Bhattacharya says. “Money is important, but if every black person gets a million-dollar check, at the end of the day that’s not going to transform our economy.” Building a racial justice element into a program like a basic income would force a sustained engagement with inequality in the U.S., and allow for the way we address it to evolve over time. It’s also important, she adds, that programs like this be designed with the communities they’re designed to reach. How the money is distributed, whether it be an annual lump sum or monthly payments, should be a choice, Bhattacharya says.

The idea behind a “plus model” of a basic income is to equip women and people of color with enough money to lift them out of poverty—that’s covered in the basic stipend that would go to all families struggling economically. But the additional payment on top of the basic income would enable people long disadvantaged in the economy to start building up wealth through savings and assets like homeownership. “Wealth is always the north star,” Bhattacharya says. “We have to get folks to the same space so they have wealth, so they have agency, they have choice and self-determination—that’s the exciting conversation.”

But, she adds, if a program like a targeted basic income is to be successful in the U.S., the country has to dramatically reform the systems that keep people of color and women disadvantaged today. Giving single mothers additional cash resources, Bhattacharya says, won’t go too far if paid leave and supported childcare remain so lacking in the U.S. And if the criminal justice system continues incarcerating black and brown people at the rate it does today—which poses a significant barrier to wealth accumulation—the additional money to those communities will not make the intended difference. “Putting money into people’s pockets through government interventions won’t mean anything if that money is taken by the government with the other hand,” Bhattacharya says.

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About the author

Eillie Anzilotti is an assistant editor for Fast Company's Ideas section, covering sustainability, social good, and alternative economies. Previously, she wrote for CityLab.

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