Chattel slavery of African-Americans lasted for 246 years, from when the first slaves were brought to Virginia in 1619 to when it was finally abolished in 1865. Another 99 years passed until the 1964 Civil Rights Act ended Jim Crow laws that had systematically denied equal opportunity to African-Americans. Even after the end of Jim Crow, discrimination against African-Americans has continued in numerous well-documented ways, and all people of color in the United States continue to lag well behind whites when it comes to income and wealth.
The impact of this history is very much with us today. As a recent report from the Corporation for Enterprise Development (CFED) points out, if the wealth of average Black families continues to grow at the same pace as it is growing today, it will take 228 years to reach the wealth of average White families today — nearly as long as the 246-year span of slavery. And that’s just to reach the current wealth levels of White families, not to catch up with White family wealth that is still growing at three times the rate of the Black population. For the average Latino family, it would take 84 years to reach the amount of wealth that White families have today.
That means without major changes, the legacy of slavery, discrimination, and the racial wealth gap will be with us for centuries to come. This racial wealth gap is a national problem that will require nationwide efforts to fully address it. However, Oklahoma policymakers can take some steps to bring economic justice to people of color in our state.
One of the keys to shrinking the racial wealth gap is access to sufficient employment. Communities of color are more likely to be unemployed, underemployed, or have jobs without employee sponsored health insurance — all of which hinder a family’s ability to build wealth. With better employment comes predictable work schedules, smaller chances of wage theft, and a living wage.
A living wage provides workers with enough money to move out of poverty and become more self-sufficient. In Oklahoma the minimum wage is currently $7.25/hr. That’s barely half the amount needed for a living wage that could provide food, clothing, and shelter for 2 adults and 2 children ($13.85/hr). While the low minimum wage affects all Oklahomans, African Americans and Latinos are more likely to have these jobs. Nationwide, people of color represent 42 percent of minimum wage workers, though they are just 32 percent of the total workforce. Increasing the minimum wage would be a step in the right direction to give these workers a path out of poverty.
Of course, a higher wage by itself does not build wealth unless the worker has opportunities to save or invest those wages. Unfortunately, many Oklahomans don’t have those opportunities. Oklahoma currently has the one of the highest rates of unbanked and underbanked people in the nation. While the unbanked and underbanked state average is 10.9 percent, African Americans’ and Native Americans’ unbanked rates are 20.9 and 15.7 percent, respectively. Including those who are underbanked, the rate for African-Americans in Oklahoma is as high as 67.2 percent. That means two out of three African-American households in our state sometimes use expensive “alternative financial services” like payday loans. Not having full access to or awareness of traditional banking pushes families into asset- draining products like predatory loans.
Payday loans and other predatory loan products strip wealth from Oklahomans who have the least. To counteract these problems facing people of color in Oklahoma and across the country, the federal government could move towards a banking alternative through a federal institution such as our postal service. In partnership with banks, the post office would offer low risk products to those traditionally shut out of the banks and forced into predatory lending practices. In the interim, state legislators could strengthen consumer protections by capping payday loan interest at the reasonable rate of 36 percent.
Closing the racial wealth gap may seem an impossibly large task for Oklahoma policymakers. Numerous decisions and trends have contributed to the problem, and it’s too big to solve on our own. However, Oklahoma does have opportunities to be part of the solution and to improve the lives of people of color in our state. It has taken almost four centuries for us to get here. With the right steps, it will not take as long to repair the injustices of our past and open up the wealth of our society to all of its members.