Abstract
Excerpted From: Brandon Mickelsen, Combating the Racial Wealth Gap: A Government and Corporate-centric Approach, 19 University of Saint Thomas Law Journal 180 (2023) (118 Footnotes) (Full Document)
This paper calls attention to the ever-present racial wealth gap in America and illuminates how capitalism, despite its ardent proponents, continues to exacerbate that gap. On its face, the supposed free market that drives America's capitalistic society is race-neutral. An ever-changing shift of supply and demand drives the market. Although slow-moving corrections and the guiding hand of an over-burdensome government create inefficiencies, free-market proponents argue that if these impositions are removed or mitigated, all will benefit, regardless of the color of their skin. But hiding under the arguments of government-imposed inefficiencies lies an economy where most wealth gains attributed to economic growth remain with those already deeply entrenched in the upper echelon of the wealthy elite. And those comfortably reaping the benefits are hardly apt to give back to others, choosing instead to shape the economy as they wish.
The flawed execution of the free market, while somewhat attributable to inefficiency creating externalities (i.e., government regulation), can largely be attributed to one primary contributor: the wealth-holders who drive both private and public policy for their own gain. To effect change and alleviate these gross racial disparities, we should focus on achieving a moral goal often left by the wayside--dignity. An economic approach that focuses on strengthening the dignity of all can upend the purely capitalistic focus that has permeated over the past one-hundred years. The capitalistic status quo only threatens to widen the racial divide. A dignity-oriented approach may do just the opposite.
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In recent years, America's economic success has seen many measurable gains go to the top wage earners, creating a widening gulf in an already unequal country. Yet, when the data is broken down further, an even broader void is seen between White and Black America. How did we get here? And how can we lessen this gap? While many public policy decisions, global events, and corporate decisions form the story, this paper will discuss two: first, the so called “Golden Age of Capitalism,” an era following the end of World War II that saw large swaths of America fulfill what has become known as the “American Dream”; and second, the mortgage-lending habits, primarily concocted by large corporate banks, that led to the great recession. Both topics highlight the divide between White and Black America. The Golden Age of Capitalism showcases how hidden agendas underlying government programs can have decades-long repercussions for Black Americans. And the lending leading up to the great recession showcases how even corporate America, in all its free-market glory, makes decisions that have vast racial ramifications.
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Gene Sperling premises his idea of economic dignity on a three-pillar model. It includes the following:
1) The economic capacity to care for family while not being deprived of fully experiencing the moments, joys, and roles that humans most value;
2) Being able to pursue purpose and potential--to have true first and second chances in your economic life to contribute and find meaning and to never feel given up on; and
3) To be able to work and participate in the economy--to work, care for family, and pursue potential--with respect and not with abuse, domination, or humiliation.
These “integral and irreplaceable” pillars should define future economic policy versus the outdated and ill-suited focus on GDP. While Sperling advocates these pillars for all Americans, Black Americans especially have been deprived of economic dignity. From ill-conceived and racially driven government policies to corporate decision-making that seeks to suppress Black progress and cement wealth in the hands of the few, Black Americans continue to be stripped of equal opportunity in the United States. Now is a time for change. A legislative focus on empowering workers through WOEs and public ownership models will break down barriers for Black Americans. And a concerted effort to reapportion tax dollars to the Black population can push individuals into business ownership and give them opportunities to build wealth, all with the end goal of narrowing, and eventually eliminating, the racial wealth gap. One thing is for certain, the two entities that drove the wealth gap--government and corporations--hold the keys to affect change; now is their chance to change the narrative and secure a dignity-filled future for all.
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Brandon Mickelsen is a 2022 graduate from the University of St. Thomas School of Law.
