Financial Aspects of Juneteenth

The Financial Aspects of Juneteenth

Happy Juneteenth Day 2022. Let freedom ring! It commemorates the day (June 19, 1865), more than two months after the end of the Civil War, when enslaved Black Americans in Galveston, Texas, were informed of their freedom. But those freedoms didn’t begin to apply to Black Americans for many years after the nation was founded. More than a century after June 19th, 1865, there is still a significant racial wealth gap between Black and White Americans.

This article provides an in-depth assessment as to how the racial wealth gap has existing so long in America.

I. Slavery

For more than 400 years, the U.S. economy and developed and thrived significantly via unpaid labor of the black people that were enslaved. Agriculture in the south boomed due to the blood, sweat, and tears from slaves.

The Emancipation Proclamation signed in 1863 during the American Civil War, ordered the release of enslaved people in the Confederate South; however, the timeline and path were slow and brutal for the four million enslaved people to whom freedom was promised.

Unfortunately, not all slave owners followed the new proclamation. It wouldn’t be until June 19, 1865, two and half years after the proclamation was issued, when Union troops arrived in Galveston, Texas, to take control of the state and finally announce the freedom of the slaves. We celebrate that monumental day as Juneteenth.  Both houses of Congress passed the 13 Amendment to the U.S. Constitution in 1865, officially abolishing slavery.

Although black people were legally free in the U.S., their release didn’t immediately come with other rights, protections, and financial resources to ensure their ability to live as free men and women. It was extremely difficult for the newly free black people to take care of themselves in a country that was very hostile and bitter regarding the 13th Amendment.

II. First Hardships – The Black Codes & Jim Crow Laws

During the Reconstruction Era (1865 – 1877), the period following the Civil War, Southern states enacted “Black Codes” that restricted the kind of work black people could do and unfairly required them to sign labor contracts with landowners. The penalty for refusing to sign or complete a contract was beating, arrest, and unpaid labor. Those who were arrested were often sent to labor camps where they were basically treated as slaves.

By the 1880s, segregation laws, known as Jim Crow Laws, unfairly limited where Black people could go, where they could live, and their access to financial services and economic resources. White water fountains, restrooms, building entrances and waiting areas were off limits to black people. Black people also couldn’t live in white neighborhoods or attend white schools.

Meanwhile, white farmers and landowners continued to amass their wealth and pass it on to their heirs while black people struggled just to survive.

III. Struggle After Struggle

In addition to oppressive laws and policies, scare tactics and violence was used to halt Black progress in America.

In the summer of 1919, following the end of World War I, racist attacks broke out against black people in Washington, D.C., and spread across the country in what is known as “The Red Summer”. Fearing that Black people would no longer tolerate and abide by segregation any longer, white people became aggressive and lashed out.

Consequently, the “Great Migration” was also occurring during this time. Approximately 1 million black people were fleeing segregation in the South and pursuing greater economic and job opportunities in the North. Fears that Black people were taking over the jobs and housing to which many white people felt entitled sparked deadly violence.

“Between April and November of 1919, there would be approximately 25 riots and instances of mob violence, 97 recorded lynchings, and a three-day-long massacre in Elaine, Arkansas, during which over 200 Black men, women, and children were killed after Black sharecroppers tried to organize for better working conditions,” wrote Abigail Higgins in this article.

The Tulsa Race Massacre of 1921 is another example of a direct attack on Black wealth and progress. An angry white mob attacked Greenwood, Oklahoma, near Tulsa, an area that had become a thriving, bustling center of Black prosperity. Known as Black Wall Street, Greenwood included law offices, medical practices, luxury shops, restaurants, movie theaters, barbershops and salons. It had its own school system, post office, bank and bus service. Against all odds, black people were finally reaching some level of success in America; however, it was short-lived and ultimately destroyed by anger and racism.

The attack on May 31, 1921, is still considered one of the worst acts of racial violence in U.S. history. Hundreds of Black residents were killed, and 1,000 houses were destroyed in just 18 hours.

IV. Struggle With Property Ownership

Land ownership is one of the most common, tried-and-true ways to build wealth in America, but opportunities for black people to own property and build wealth from equity have been limited, and in most cases blocked, for much of U.S. history.

Consequently, when the Civil War ended, the federal government confiscated land from Confederate landowners and, by Special Field Order No. 15, granted 40 acres and a mule to thousands of formerly enslaved Black people. This was intended to be a way that Black people could provide for themselves and start working toward financial independence. But President Andrew Johnson reversed the order on April 14, 1865, just three months after it had been issued, and the land was returned to Confederate landowners.

The practice of sharecropping became prominent in America. Black people rented small plots of land that they would work themselves and give a portion of their harvest to the landowner. editors wrote in an article about sharecropping: “Some Blacks managed to acquire enough money to move from sharecropping to renting or owning land by the end of the 1860s, but many more went into debt or were forced by poverty or the threat of violence to sign unfair and exploitative sharecropping or labor contracts that left them little hope of improving their situation.”

In the 1930s, redlining policy was invoked in the U.S. The redlining policy was the federal government sought to address the housing shortage at that time by providing suburban housing to white families and pushing Black families into urban housing projects. The Federal Housing Administration refused to insure mortgages in and near Black neighborhoods while subsidizing developments for whites only. The government created a grading system, largely based on race, to evaluate neighborhoods’ mortgage lending risk. Neighborhoods where people of color lived were marked in red on maps to indicate the highest risk.

Richard Rothstein, author of “The Color of Law,” said in an interview about redlining on WHYY’s Fresh Air that by the time the Fair Housing Act was passed in 1968, suburban homes were no longer affordable for Black families because white families had already driven up the prices and gained equity and wealth as a result.

Rothstein explained the effects of redlining: “Today African American incomes on average are about 60% of average white incomes. But African American wealth is about 5% of white wealth. Most middle-class families in this country gain their wealth from the equity they have in their homes. So, this enormous difference between a 60% income ratio and a 5% wealth ratio is almost entirely attributable to federal housing policy implemented through the 20th century.”

The U.S. tax structure magnifies the racial wealth gap, according to the Center on Budget and Policy Priorities. That’s because wealth (money and property already owned and earning interest) isn’t taxed as heavily as income from work (wages, salaries and employer-provided benefits).

V. The Right to Vote

The 15th Amendment to the U.S. Constitution granted Black men voting rights in 1870, but, with the end of Reconstruction in the late 1870s, many Southern states enacted laws that effectively reversed the rights the 15th Amendment granted, along with citizenship rights granted by the 14th Amendment.

For decades, segregation, poll taxes, literacy tests, intimidation tactics and violence were used to dissuade or stop Black people from voting. Not being able to participate in the democratic process meant their needs weren’t represented. Lawmakers continued to enact laws that singled out black people and kept power and wealth concentrated among white men.

The Voting Rights Act, signed into law in 1965, 95 years after the adoption of the 15th Amendment, was intended to remove barriers and blocks to black voting, but it wasn’t well enforced, and, in most cases, it was ignored.

VI. Achieve Wealth Equity

Needless to say, there are a lot of barriers to Black wealth throughout U.S. history that has had many impacts even to this present day and age in 2022. Today, Black families in the U.S. have one-tenth the wealth of white families a racial wealth gap that the Institute for Policy Studies says would take an estimated nearly 230 years to close if the wealth of the average Black family continues growing at the current pace. The median wealth for a White family was $188,200 in 2019, compared to $24,100 for Black families and $36,100 for Hispanic families according to the Federal Reserve’s 2019 Survey of Consumer Finances released in September 2020. One forecast for the median Black family sees it falling to $0 if current trends continue.

This racial wealth gap issue needs to be resolved. America spends millions and billions on helping the Ukrainian people; but will not solve the current racial wealth gap. Black people have to hold politicians accountable – both Democrats and Republicans.

Black Americans need to focus on being Economically Intelligent and purchasing land and property. Also, focus on amassing wealth. Stay away from credit card debt. Yes, the struggle is real, but there are a lot less barriers in place now in 2022 than in 1865 or 1965 for that matter. Ultimately, nothing can hold you back but yourself; that is not to say that path to success will not be harder for you than your white counterpart, but success in America can be attained. So, work hard, be E.I., and achieve the American Dream.

Be blessed, be E.I., and be Financially Free!

Best Regards,

Jeremy G. Preston, CEO

E.I. Enterprise LLC

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