The Anti-Racism of Baby Bonds
February 19, 2021
By Matt Hughes
Honor Black History Month by closing the racial wealth gap.
The Roosevelt Rundown is an email series featuring the Roosevelt Institute’s top stories of the week.
Baby Bonds, Reparations, and the Racial Wealth Gap.
That’s the racial wealth gap between the median white household and median Black household, per the 2019 Survey of Consumer Finances.
It’s also a potent reminder that “the ways we’ve tried to solve the problem in the past, which is better access and more opportunity to the current system—like building wealth through housing or through education—just aren’t working,” as Roosevelt President & CEO Felicia Wong told Vox.
Racial wealth inequality has long been a focus of policy development and scholarship. Now, as the pandemic continues to ravage Black communities and businesses, and as a new president and Congress more intentionally address race in rhetorical and personnel choices, bolder policies are gaining momentum.
H.R. 40, which would establish a Commission to Study and Develop Reparation Proposals for African Americans, has been introduced in every session of Congress for the last three decades. With a record 173 cosponsors, the bill—reintroduced by Rep. Sheila Jackson Lee (D-TX) last month—is now closer than ever to formally acknowledging and financially redressing slavery’s enduring harm to Black people.
This month, a bill reintroduced by Sen. Cory Booker (D-NJ) and Rep. Ayanna Pressley (D-MA) is also drawing new attention and support. The American Opportunity Accounts Act, which builds on the work of Roosevelt Fellow Darrick Hamilton and Roosevelt Senior Fellow William “Sandy” Darity Jr., would provide every newborn child in the US with a baby bonds savings account, the size of which would depend on family income. Upon turning 18, the child could then access those funds—as much as $46,000 for someone in a low-income household—for academic, entrepreneurial, or asset-building purposes.
A baby bonds program of this type would be a significant anti-racist complement to reparations. As Hamilton tells Vox, “The criteria for inclusion, as well as the intended outcome, are associated with a domain of economics that is so racially disparate.”
And the reduction in racial wealth inequality among young people could be drastic, per findings from Roosevelt Fellow Naomi Zewde. As she wrote in 2018, the median net worth for white adults ages 18–25 in 2015 could have been $79,159 rather than $46,000 had a baby bonds policy been in effect. The median net worth for Black adults ages 18–25, meanwhile, could have been $57,845 rather than $2,900.
Take note: Everyone would benefit from baby bonds, and it would reduce the racial wealth gap in life-changing and society-shifting ways.
To honor Black History Month in word and in deed, we can start there.
On Monday, March 22, 2021, at 7:00 PM ET, join Roosevelt’s virtual Distinguished Public Service Awards, which honor individuals whose careers exemplify FDR’s extraordinary dedication to public service. This year’s recipients: Rep. Frank Pallone (D-NJ)—Chairman of the House Energy and Commerce Committee—and AFL-CIO Secretary-Treasurer Elizabeth Shuler. Register now.
And if you missed last week’s Roosevelt webinar, you can still catch up:
What Makes for a Strong Presidential Transition?
- Featuring Edward E. “Ted” Kaufman (Former US Senator from Delaware & Co-Chair of the Biden-Harris Transition Team) and Felicia Wong (Roosevelt President & CEO)
- Moderated by Christie George (Senior Advisor at New Media Ventures)
What We’re Reading
Biden and the Fed Leave 1970s Inflation Fears Behind – New York Times
How Biden Learned to Go Big [feat. Roosevelt’s Felicia Wong, Darrick Hamilton, and Mehrsa Baradaran] – Vox
Texans in the Midst of Another Avoidable Catastrophe – The New Yorker
The Battle over Climate Change’s Most Important Number [feat. Roosevelt’s Joseph Stiglitz] – Axios