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How does systemic racism affect Black Americans’ access to capital?

As part of Stateside's ongoing summer series on what systemic racism looks like in American society, we spoke with scholars about the historical and contemporary barriers that prevent many Black Americans from accumulating wealth.

A white Minneapolis police officer’s killing of George Floyd on May 25 sparked protests across the country and world, as well as conversations about how different sectors of American society uphold racial discrimination and inequity. This summer, Stateside is conducting a series of conversations on what systemic racism looks like. This week we hear from scholars on how systemic racism blocks Black Americans from opportunities to accumulate wealth.

Listen to individual conversations below.

Black Americans face major barriers to building intergenerational wealth

Though landmark civil rights legislation like the Fair Housing Act and the Equal Employment Opportunity Act was supposed to give Black Americans, after centuries of enslavement and economic exploitation, a fair shot at the American Dream, the promise never really paid off. Stateside spoke with geography professor Joe Darden and economics professor Charles Ballard, both of Michigan State University, about some of the obstacles that have prevented Black Americans from acquiring and increasing wealth, both historically and today.

“The federal government always helped the white population access home ownership. They guaranteed the mortgage if the white person did not pay--the federal government would come in and pay it, so that relieved the banks, the risk they had to worry about. So they would make these mortgage loans to whites, and that allowed them to move into houses in the suburbs, and that allowed them to accumulate, again, the wealth, and they could pass it on to their offspring. Blacks were denied that same opportunity, even though they may have qualified as whites did. Some were veterans who had come back from the war. They still could not get a loan to move to the suburbs,” Darden said.

“In terms of generating earnings, there are a few things that really set Black workers back relative to white workers. One is education, and the importance of education to your career has really increased dramatically in the last 40 years. And Black Americans have increased their educational attainment, but they’ve never fully caught up with white Americans, and that’s especially true here in Michigan. And as a result, if you’ve got an education gap, and if education makes more of a difference than it used to, then that has exacerbated the Black-white earnings differences. Also, even if you have two people with the same amount of education, Black workers tend to end up in lower paying occupations,” Ballard said.

Scholar and author Herb Boyd on the systemic barriers in attaining wealth for Black Detroiters

Stateside’s conversation with Herb Boyd

While some white people might associate the 1940s and ‘50s with increased economic prosperity in the U.S., both the government and society denied Black Americans the resources and opportunities that could have provided a path to the middle class. These barriers are particularly entwined with the economic and social history of Detroit. Author, educator, and activist Herb Boyd spoke with Stateside about some of the patterns of inequity that have historically prevented Black Detroiters from accessing and accumulating wealth.

“You had a white population that was not that receptive in many parts of the city. You could not just choose to live where we wanted to live. You had neighborhood organizations that blocked that. You had a government that was predisposed to do little or nothing. So we’ve had these conditions over the years in which the African American community is met with all kinds of opposition. Can you get the loan, were the banks receptive, how was your credit rating? What’s your background and history? So accumulating wealth--of course, home ownership is just absolutely critical in that process. We were denied those opportunities and possibilities,” Boyd said.

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