One of the most critical indicators of your economic well-being is wealth. That’s the difference between your assets and what you owe. Once you have it, you’ve got a resource even more precious than a steady paycheck. You have something to turn to when hard times come, like a job loss or health crisis. Wealth helps you get an education, purchase a home, and start a business. It enables you to take risks and maximize life’s wonderful possibilities.
Wealth, whether in the form of a home, a retirement account, an emergency fund, or a stock portfolio, pays forward into the future, generating security and opportunity along the way for you and your children, and your children’s children.
After decades of rising inequality, most everyone below the 1% has problems accumulating wealth. But a mountain of evidence continues to demonstrate in America, people who aren’t born White face especially daunting obstacles. Economist Darrick Hamilton, director of the New School’s Institute on Race and Political Economy, studies how economic injustice reflects the forces of capitalism and systemic racism. His research poses challenging questions: Why do Black people accumulate so extraordinarily less compared to other groups? When they get it, why is it so hard for them to keep it?
Recently, Hamilton and his colleagues looked at wealth and income across various racial and ethnic groups in Tulsa, Oklahoma. Tulsa, as you’ve been hearing in the news, is the site of the horrific event in 1921 that left as many as 300 people dead and a prosperous Black community in ashes. At the time, Oklahoma's Greenwood District was a place where Black people were managing to flourish even under the harsh conditions of Jim Crow segregation. Greenwood had made amazing economic strides – growing so affluent it got the nickname “Black Wall Street.” At the time of the massacre, six Black families in the area owned their own planes.
But none of this protected them from bombs, beatings, seizure of property, arrest without due process, squalid detention camps, and murder. None of it protected them from terrorism.
A century later, Tulsa offered the researchers a chance to trace the impact of the destruction on generational wealth and look at how losses continue to haunt the present.
The forthcoming report, timed for the 100-year anniversary of the Tulsa Race Massacre, also investigates the wealth experience of other racial and ethnic groups living in Tulsa, such as Native Americans, also the targets of systemic violence and oppression. The researchers were able to break down groups into more refined categories than usual, like individual Native tribes and immigrant and non-immigrant Mexican households, giving them a better picture of how people accumulate wealth according to their circumstances.
Let’s take a tour of some staggering items revealed in the report.
The researchers show that as of 2014, Black households in the metropolitan area of Tulsa had a median household wealth of only $8,000. White households, in contrast, boasted a median total of $145,000.
When it came to homeownership, Black Americans came out last of all the groups studied. Only 40% of Black households owned their homes compared to 85% of White households. And even though Black households showed the lowest rate of homeownership, they had the highest amount of debt -- 75% carried a mortgage.
As for liquid assets, the kind that can get you through emergencies, Black households in Tulsa had a median number of exactly zero -- less than any other group. White households, on the other hand, had a median liquid asset number of $12,000. Cherokee households were not far behind at $10,000.
What about stocks, another key component of wealth? Again Black households were far behind. Just 5% owned this type of wealth, compared to 37% of White households. The only group with a lower rate of stock ownership than Black households was Mexican households, at 3%.
Black households also had the highest rate of student loans and the second-highest rate of payday loans – the type of debt most poisonous to economic wellbeing.
The numbers add up to an undeniable – and indefensible -- picture of White economic advantage. “This racialized nature of wealth in Tulsa is not surprising,” state the researchers, “given the country’s racist and violent past.”
Hamilton and his colleagues also found that the wealth gap between White households and non-White households was bigger than the gap in income. That finding suggests that even when the incomes of people of color were closer to that of White people, they still had a harder time accumulating wealth.
Remember, these appalling statistics come from a city that once had one of the most prosperous Black communities in the nation.
The Massacre was fomented by tales that a Black man had raped a White woman. The violence was eerily similar to what had occurred two decades earlier in Wilmington, North Carolina, where another prosperous Black community was devastated by White violence and a multi-race municipal government overthrown. There, too, the excuse for the bloody rampage was the defense of White female virtue.
But the underlying motivation, says Hamilton, was actually envy. Just as it happened in Wilmington, White envy of Black success caused hell to break loose. The resentment of poor White people could be leveraged by the more affluent White capitalists to seize Black wealth when the ashes settled. These capitalists weren’t about to let their economic dominance was become threatened. The bone they threw to the poor White people was the reward of becoming at least better off than Black Tulsans. Fake news fanned the flames of White envy, just like in Wilmington. The result was carnage and pain that echoes through generations.
Hamilton argues that calling Tulsa’s Greenwood District “Black Wall Street” is not quite accurate. “Greenwood was about more than finance -- its prosperity was grounded in diverse businesses, in relationships in the community,” he explains. “Focusing on Wall Street centers on capitalism as the image and mechanism of success at the exclusion of the other organizations and work that make for a thriving, self-sufficient community.”
In fact, as Hamilton explains, it was the financiers who descended like capitalism’s vultures to pick the bones of Greenwood after the destruction, scheming – with the help of the state -- to deny insurance claims filed by Black people by classifying the Massacre as a riot.
Of all the urban areas Hamilton has studied, Tulsa provides a unique case to examine wealth not just because of its racial history, but its geographical location and the fact that outside of Alaska, it has the largest urban U.S. population of Native Americans (it was Indian Territory until 1907). It also has a substantial Mexican population.
The story of Tulsa and wealth, Hamilton explains, is about more than just government policy. It’s about what he calls “political codification” -- the ways in which the state fails to protect the property rights of people in communities like Greenwood. “And it’s not just about protecting them from vigilantes,” he adds. “It’s about protecting them from what can only accurately be called terrorism – the taking of property through terrorist acts.”
Hamilton points out that over and over in America, the state has interpreted and enforced laws in ways that preserved economic White advantage. “Black people have always been vulnerable to state-sanctioned terror,” he says. “Not just their property, but their personhood. That has been the American story. There are laws to protect property rights, laws against fraud, but not only have these laws not been enforced to protect Black people, they’ve been used against them.”
Hamilton describes what happens in places like Tulsa and Wilmington as the opposite of the Homestead Acts of the 19th century. “In that case, government policy gives you a nest egg of property so that you can accumulate assets,” he says. “Well, Black people were denied access to that and many other similar policies. Even when they did manage to accumulate capital in various pockets of communities that were poised for growth and had some viability, they would be exposed to forces of terror to property and person. And the state itself was involved in the plunder.”
So why does it still remain so hard, even after Jim Crow has ended, even after the Civil Rights Movement, for people who aren’t White to amass and hold onto wealth? Why is it that Hamilton’s research shows again and again that in American cities – and not just Tulsa -- White people are always either at the top or close to it in terms of wealth?
Hamilton explains that history, geography, and circumstances all play a role for specific groups. Immigrant Mexican households in Tulsa, for example, are impacted by the need to send remittances home. Certain Native American groups in Tulsa appear to be relatively better off than other groups, but their rural counterparts may have a totally different experience.
“Wealth is grounded in capital, but it’s also grounded in politics,” says Hamilton. “In certain cases of Native American tribal membership, such as the Cherokee, political infrastructure can pave the way to some wealth and capital accumulation. Tribal sovereignty brings communal mechanisms and structures for individual accumulation. But it’s important to emphasize that all Native American cases are by no means the same.”
For Black people in Tulsa, the legacy of the Massacre plays a detrimental role in trying to secure wealth. Hamilton explains that part of this is because acts of terrorism like Tulsa destroy vital infrastructure. As he and his colleagues state in their report, Black Tulsans today face “shocking disparities” in everything from employment and educational opportunities to safe and affordable housing to a healthy environment and access to primary healthcare. “These disparities are fueled by racist underfunding of public structures and deliberate and ongoing structural violence enacted by government entities whose choices impoverish the chances of Greenwood’s descendants into 2021,” they note.
An example of this structural oppression is mass incarceration. Oklahoma, the researchers point out, has the highest rate of incarceration in the U.S. – perhaps in the world. And Black people are disproportionately sent to prison.
Hamilton observes that the state never repaired the damage done in 1921, leaving the decedents of the Massacre with diminished possibilities. To hear the testimony of survivors like Viola Fletcher, a 107-year-old whose family was driven out of the city, is to feel hardships of lack of education and job opportunities come alive.
But it’s not just a problem Tulsa, Hamilton observes. “Black people are consistently at the bottom in terms of wealth in cities across the country, and not only in places with an especially violent racial past. They have been vulnerable in terms of policy and the protection of their wealth throughout the country.”
So how can the damage be repaired? Both in Tulsa and in the rest of America?
Hamilton sees two parts to this question. One is a psychic reckoning: “People need to know that it will never happen again, that the state will not turn a blind eye or worse, that it won’t be complicit in terror against them.” The second is a material reckoning: “There’s a material trauma that gets passed down from one generation to the next,” says Hamilton. “It’s not just about wealth generation, it’s wealth stability.”
The economist says that in Tulsa there is an urgent need for restitution “in the sense of a full-throated acknowledgment” of what happened. In addition, he calls for “compensatory measures” to redress the harm that was done. If those two things happened, he says, Tulsa could become a model for the rest of America.
“The ultimate national redress,” says Hamilton, “is reparations, which would be an act of the federal government to acknowledge that these scenarios of Tulsa, Wilmington, and elsewhere were not isolated spatially or in time. That beginning with slavery, the original sin, and well beyond slavery, elements of these failures to protect the rights of Black people manifest. Even today, we see the ways in which the state and the court system interact with Black people as it relates to their property.”
Finally, Hamilton argues that in the broadest sense, we need an “economically just perspective” in America – a vision that ensures that people will always have access to capital and one in which the state ensures that there are “no material consequences associated with something as cursory as ones race of gender identity.”
Only then, he says, will America truly be on a path of justice.
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