Since the 2020 “racial reckoning,” there has been increased political momentum behind reparations for slavery. Debates about reparations have moved from the halls of academia to legislatures in California and a number of cities. Americans and their leaders are increasingly asking: Are reparations justified at all? And, if so, who should get how much?
This report concerns itself with a different question: Who pays for reparations? Reparations are a form of compensation for historical injustice. But many Americans did not have any ancestors present in the country at the time that injustice was committed. It is hard to argue that Americans whose ancestors arrived after 1860 should be on the hook for the costs of reparations.
What fraction of nonblack Americans have ancestors who arrived after the end of the Civil War? Using demographic modeling techniques, this report pegs the figure as high as 70%, including more than half the non-Hispanic white population. These Americans are the descendants of immigrants who came to the U.S. either in the first great wave of immigration in the late nineteenth and early twentieth centuries, or in the second great wave, begun in 1965 and still ongoing today.
Many of these more recent arrivals are at the top of America’s economic distribution. Indeed, the recent-arrival share of top wealth earners is likely only to grow in coming years, given the prevalence of immigrants and children of immigrants at the head of top businesses. This means that the base of people and wealth that could plausibly be taxed for reparations is shrinking and will continue to shrink for the foreseeable future.
This dynamic plays out in other areas of social policy. Any transfer or subsidy proposal that is justified by historical injustice—e.g., affirmative action—will lose legitimacy as the population changes. This is an important, and often overlooked, feature not only of the reparations debate but of debates about such proposals in general.
Introduction: The Reparations Moment
Reparations for slavery are having a moment. Since the summer of 2020’s “racial reckoning,”[1] the idea of paying black Americans some form of recompense for historical injustice has gained new political currency. Support for reparations was a hallmark of Democratic campaign platforms in 2020.[2] The state of California empaneled a dedicated reparations task force, which in June, 2023 recommended that eligible black residents receive payments totaling $1.2 million each.[3] The city of Boston has a similar task force, while the Chicago suburb of Evanston has committed to paying out $10 million to its roughly 12,000 black residents in reparations for discriminatory housing policy.[4]
The idea of reparations for slavery is not new. Proponents trace it to General William Tecumseh Sherman’s Field Order 15, which reserved 400,000 acres of land to the formerly enslaved people freed by the Civil War—the origin of “forty acres and a mule.”[5] The modern history of reparations advocacy, though, originates in the Black Power movement of the 1960s and 1970s. As early as 1960, Malcolm X called on the U.S. government to “compensate us for the labor stolen from us.” In 1966, the Black Panther Party’s 10-Point Program demanded “the overdue debt of forty acres and two mules.” In the decades since, there have been several scholarly cases for reparations, including Boris Bittker’s The Case for Black Reparations (1973), Randall Robinson’s The Debt: What America Owes to Blacks (2000), and Ta-Nehisi Coates’s “The Case for Reparations” (The Atlantic, 2014).[6]
Arguments for reparations are first and foremost arguments about justice: some people (black Americans descended from enslaved people) are owed something (usually money, although sometimes land) as recompense for some wrong (their ancestors’ enslavement and its attendant horrors). Treatments of the topic tend to devote much attention to detailing the extent of slavery’s evil and arguing that those harms still hold black citizens back today. Some advocates and scholars have made efforts to estimate the exact size of the amount due (as detailed in the next section).
Opponents of reparations also make arguments grounded in justice. They contend that it is unfair to impose on people today the costs of crimes committed by their ancestors, or (relatedly) that it is unreasonable that today’s black Americans should receive recompense for harms done to their ancestors. A 2021 UMass Amherst poll demonstrates that the public has additional concerns about reparations, including that the price tag is too high; that reparations would be difficult to administer; and that black Americans already receive equal treatment, such that reparations are unnecessary.[7] (A variation of the last argument is that black Americans have already received substantial “reparations” by virtue of being net beneficiaries of transfer spending.)
This report addresses a different, albeit related, challenge to the reparations project: Who pays for it? Even most advocates for reparations agree that nongovernmental institutions (like businesses and universities) could not plausibly pay for reparations; the funds would come from the U.S. government. But the same advocates tend to ignore the fact that U.S. government spending is ultimately funded by taxpayers. This means that “who pays” is a question of justice, too: granting, for the sake of argument, the legitimacy of the reparations idea, which Americans deserve to foot the bill? On whom should the burden of paying for reparations fall?
A substantial proportion of the nonblack population—as much as 70%, as estimated below—is descended from people who arrived after the end of slavery. These include descendants of the European arrivals in the first great period of American immigration, from the late nineteenth century to 1924, and those who have arrived or are descendants of arrivals during the second great period, beginning in 1965 and extending to the present. This second group, furthermore, is represented among the wealthiest Americans and American households, challenging the feasibility of a “soak the rich” approach to reparations.
Even if we otherwise grant the arguments for reparations, this basic demographic fact—that a majority of nonblack Americans are attributable to post–Civil War immigration—throws a wrench into the reparations project. Publicly funded reparations for slavery will entail taking money from tens of millions of people who are not—even under assumptions of inherited guilt that are already wildly at odds with the American tradition—plausibly responsible for slavery. To ask the question “Who pays?” produces uncomfortable answers for those who would like to see reparations paid.
How Much, for Whom, and from Where?
It is worth exploring some of the hard questions about reparations for slavery: How much? Who gets it? And where, in general, do advocates think the money comes from?
How much will reparations for slavery cost? In From Here to Equality: Reparations for Black Americans in the Twenty-First Century, economist William Darity and folklorist A. Kirsten Mullen identify a range of estimates, a subset of which are depicted in Figure 1.[8] These estimates use a variety of methods: the value of work done by slaves; the value of promised 40 acres not delivered on; even the total value of the stock of slaves claimed by Confederate Secretary of State Judah P. Benjamin on the eve of the Civil War.[9] In each case, Darity and Mullen take the original estimate of the value and add compounding interest in the amount of 4%, 5%, and 6% annually, an exercise I extend to 2023.[10]
The result is a wide range of estimates: the value of 40 acres in 1865, compounded at 4%, would yield a reparations bill of $196 billion; the estimated value of all slaves in 1860, compounded at 6% annually, puts the figure at $53.3 trillion, more than twice the U.S. gross domestic product. The mean across all estimates is $12.9 trillion, including a mean of $6.6 trillion if we use a 4% interest rate, $10.2 trillion for 5%, and $22 trillion for 6%. By way of comparison, it has been estimated that closing the black–white wealth gap would cost $15 trillion.[11]
To whom would this money go? On this topic, there seems to be a fair amount of consensus: black Americans who are descendants of slavery.[12] Darity and Mullen, for example, specify three criteria: that the person be a U.S. citizen; that the person “had at least one ancestor who was enslaved in the United States after the formation of the Republic”; and that the person publicly identified—e.g., on the census—as black or an equivalent category at least 12 years before enactment of the reparations program.[13] Similarly, Brookings Institution senior fellows Rashawn Ray and Andre Perry, in a 2020 report, say that reparations should go to “a Black person who can trace their heritage to people enslaved in U.S. states and territories,” adding: “Black people who can show how they were excluded from various policies after emancipation should seek separate damages.”[14] California’s reparations task force, the nation’s first statewide effort to produce a plan for reparations, also proposed that eligibility be restricted to “only those individuals who are able to demonstrate that they are the descendant of either an enslaved African American in the United States, or a free African American living in the United States prior to 1900.”[15]
How many people qualify under these conditions? As of the 2021 American Community Survey (ACS), roughly 40 million Americans self-identified as black.[16] Although identifying what fraction have enslaved ancestors requires more detailed genealogical work than is within the scope of this report, some ballpark estimates can be made. For example: 57% of black Americans believe that their ancestors were enslaved, while just 8% are certain that they were not.[17] Among those who reported an ancestry on the 2021 ACS, 78% of black people said that they were “Afro-American,” “African-American,” or from the United States, which may indicate sufficiently deep roots to be slave-descended. A similar share, 78.7%, reported that both their parents were native-born in the 2022 Annual Social and Economic Supplement to the Bureau of Labor Statistics’ Current Population Survey (CPS-ASEC).[18]
To a first approximation, then, it is plausible that 75%–90% of black Americans are eligible for reparations for slavery, or 30–36 million. For the estimate of the value of reparations above, $12.9 trillion, that works out to $360,000–$430,000 per person. The highest estimate, $53.3 trillion, is proportionally higher: $1.48–$1.78 million per person.
These large sums raise an important question: Where, exactly, does all this money come from? In a 2022 Pew survey on reparations, large majorities of those who favored them said that the money should come from “the U.S. federal government,” and majorities supported payments by businesses and banks “that profited from slavery.” A bare majority, and a minority of white and Asian respondents, supported charging colleges that had benefited. Less than half favored charging “descendants of families who engaged in the slave trade,” although even this position was supported by 60 percent of black respondents.[19]
As far as paying for reparations, colleges and businesses are nonstarters. Although they may make token gestures at reparations,[20] colleges do not have anything approaching the wealth or cash flow required. The cumulative endowment value of the colleges surveyed each year by the National Association of College and University Business Officers—the only colleges with endowments worth speaking of—added up to $838 billion in 2021, about 6% of a $12.9 trillion reparations bill.[21] Corporations are bigger earners, but total annual U.S. corporate profits—not just those of companies that were around circa 1860[22]—total about $2.8 trillion.[23] If every corporation were soaked of all its profits for 4.5 years, it could pay the cost of reparations—under the unlikely assumption that all those companies would still exist and pay taxes in the U.S., of course.[24]
The U.S. government is the only entity with sufficient capital, or access thereto, to make a six-figure payment to almost every black American. This option is far more popular, in the Pew poll, than charging the individual descendants of slaveholders. Yet on its face, this popularity makes little sense. After all, government revenues—whether raised by the income tax, duties and excise taxes, or even a (dubiously constitutional) wealth tax[25]—must eventually come from the taxpayer. If those taxpayers are not the long-term beneficiaries of slavery—the descendants of slaveholders—the tax burden will unfairly fall on people who owe no ostensible debt. If the purpose of reparations is to undo the damage of slavery, and if the benefits of reparations accrue to those ostensibly disadvantaged by the legacy of slavery, it is only fair that those who benefited from that legacy should pay the price, and manifestly unfair if those who did not benefit pay.
One common objection to this argument posits, first, that contemporary nonblack Americans are still indirect beneficiaries of slavery; and second, that reparations should be paid not only as recompense for slavery but also for post–Civil War institutional discrimination against blacks (e.g., Jim Crow). Therefore, on this view, all contemporary nonblack Americans should contribute to reparations, even if their ancestors arrived well after emancipation. Even if we grant the validity of this argument, however, there is still a question of who pays how much. It would be absurd, for example, to tax the new arrival from Ecuador and the sixth-generation descendant of slaveholders the same amount to cover the cost of reparations. Estimating how much each person has benefited—either from slavery itself or from post-slavery segregation—still yields a distribution of debt owed that is not uniform across the population but a function of the recency of the arrival of his or her first American ancestors.
Another objection is that the government could pay for reparations not out of tax revenue but by printing money (e.g., by issuing debt that would then be purchased by the Federal Reserve with printed money). Darity and Mullen, citing Vox’s Matt Yglesias, suggest that even this process could be end-run, with the Fed simply being directed to fund reparations directly.[26] But there are no free reparations: printing $13 trillion—when the current money supply is approximately $20 trillion[27]—would guarantee substantial inflation, the costs of which would still be borne by all Americans. Indeed, that inflation would fall regressively on those whom reparations are meant to benefit, meaning that it is possible that reparations-by-inflation may leave black Americans no better off in real terms than they were before.
We cannot, in short, avoid the distributional question: Who owes what for reparations? Which people should be on the hook for the taxes that pay for reparations? As the next several sections discuss, this question is far more complicated than it may first seem.
Who Pays? Some Considerations
At first blush, the problem of who pays for reparations seems a straightforward one. As previously discussed, perhaps 33 million black Americans would receive reparations paid for, in some way or another, by the other 300 million Americans. But are all those people plausibly beneficiaries of slavery? Or, alternately, should they all be equally on the hook?
Most obviously, it is hard to argue that most Asian and Hispanic Americans benefited, at least to the same degree as the average white person. Asian American immigration to the U.S. did not meaningfully begin until after the Civil War. As of the 1860 census, there were just 30,000 Asians in the country, mostly Chinese-origin residents of California. Similarly, there were just 186,000 Hispanics in the U.S. in 1860. These were overwhelmingly Mexican nationals, who, as of 2021, made up less than 60% of the 62-million-strong Hispanic population.
One could pare down the paying population to all non-Hispanic whites, or even all non-Hispanic white residents of the old Confederacy.[28] But here, too, immigration poses a problem.
On the eve of the Civil War, there were approximately 27 million nonblack people in the U.S., the overwhelming majority of whom were white. This population was largely the product of natural increase. As Figure 2 shows, there was relatively little immigration to the U.S. in the antebellum period. The 1860-vintage nonblack population also resembled the Founding nonblack population in ethnic origin. The latter group was mostly British (86% from the United Kingdom nations), with the remainder being German, Dutch, French, and a small fraction Swedish.[29] Between 1820 and 1859, 91% of new arrivals were from Ireland, Germany, the United Kingdom, France, or Canada.[30]
The antebellum levels of infrequent, ethnically homogenous, immigration did not persist. Following the end of the Civil War, the U.S. entered its first great age of migration, powered by advances in technology and the promise of prosperity. Between 1866 and 1924—the year the Johnson-Reed Act effectively ended immigration for a generation—more than 30 million people arrived in the United States. This represented a substantial addition, compared with the 38 million already here as of 1870. As before 1860, the vast majority of these new immigrants—90% from 1860 to 1919—were European; a further 5% were Canadian. But they came from many more countries, including Italy (12% of arrivals); Austria-Hungary (12%); Germany (12%); Russia (9%); the United Kingdom (9%); Ireland (7%); and the joint kingdom of Norway-Sweden (5%).[31] A large number of Jews also arrived from across Eastern Europe.
In other words, by the time of the mid-twentieth-century immigration pause, the white population of the U.S. had a substantial component whose arrival to the country could be dated to the years following the Civil War. In 1900, the Pew Research Center has estimated, 49% of the U.S. population was foreign-born or the children of the foreign-born.[32] And white immigration continued following the liberalization of the system through the 1965 Hart-Celler Act. As of 2021, there were about 9 million foreign-born non-Hispanic white people in the U.S., about 5% of the non-Hispanic white population.
Today’s U.S. white population, then, is made up, to a substantial extent, of people whose earliest American ancestors arrived after the end of slavery—and who therefore are as little obliged to pay reparations as are their Hispanic and Asian peers in a similar situation. How many people, exactly, does that cover? What fraction of the U.S. population might be said to be on the hook for slavery? The next section turns to modeling tools to provide an estimate of the answer.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.