'What was robbed must be repaired': 5 Black business leaders talk reparations and corporate America's role in closing the wealth gap
As we honor Juneteenth as an official federal holiday for the first time, many are calling attention to conversations about reparations and the need to close the racial wealth gap for Black Americans.
Prior to the Covid-19 crisis and its disproportionate impact on communities of color, the median white household in America held nearly eight times the wealth of the median Black household in 2019, reports Brookings Institution.
While President Biden and his administration have unveiled plans to help close this gap, which has only been exacerbated by the pandemic, many people have also called on corporate America and its leaders to take a stand in speaking out against racial inequality and economic injustice.
Some leaders, like BET and RLJ Companies founder Robert Johnson, have openly talked about the need for reparations to help compensate Black Americans for years of slavery and unpaid labor. Other leaders, like The ActONE Group founder and CEO Janice Bryant Howroyd, have spoken about alternative solutions to reparations that still ensure Black communities are getting the proper resources and economic support needed to build wealth.
CNBC Make It reached out to Johnson, Bryant Howroyd and three other Black business leaders to get their insight on reparations, economic justice and the role corporate America plays in closing the racial wealth gap.
You can scroll down or jump directly to the following sections by clicking on their names:
Robert Johnson: Founder of BET and RLJ Companies
John Hope Bryant: Chairman and CEO of Operation HOPE
Janice Bryant Howroyd: Founder and CEO of The ActONE Group
Kevin Cohee: Chairman and CEO of OneUnited Bank
Michael Hyter: President and CEO of The Executive Leadership Council
Founder of BET and RLJ Companies
Why he believes $14 trillion in reparations is needed
I called for a $14 trillion reparations payment for two specific reasons. The first reason is it would help to close the wealth gap between Black and white Americans which was fundamentally caused by slavery. [Slavery] deprived Black Americans of the financial benefits of their labor and was compounded in denying access to capital by over 200 years of systemic economic discrimination.
The second reason is for white Americans to express their request for forgiveness and manifest their atonement to Black Americans to show that they believe that Black Americans deserve both an apology and a payment for the country's failure to live up to its founding principles of equality, due process under law, and the right to life, liberty and the pursuit of happiness without any form of racial discrimination.
The specific benefit of financial reparations would give Black Americans access to capital which is the primary driver necessary to achieve economic success and to build sustainable wealth. In my proposal, each Black American would receive $350,767, which they would use to acquire the same assets of wealth that white Americans have. The key assets would be homeownership, investments in stocks and bonds, investments in retirement savings and education for their children.
On if he believes reparations will receive the political support needed
No. That is why I have called on Congress to enact what I call The BOOST Act. The BOOST Act would invite investors to invest in Black-owned businesses and in return, they would be eligible for preferential tax treatment based on the profitable returns of their investment. Where reparations would be mandatory, The BOOST Act investment would be voluntary and would be an example of wealthy investors doing what they believe is in the best interest of providing Black Americans with access to capital and, therefore, closing the wealth gap.
John Hope Bryant
Chairman and CEO of Operation HOPE
On if reparations is key to closing the racial wealth gap
I think that human dignity and common considerations are the key to closing the wealth gap. Unfortunately, human dignity requires that we heal the breaches of inhumanity between us — the very thing that opened the door to slavery in the first place. Common considerations would acknowledge Black slavery as the largest reverse transfer of wealth in American history. That won't happen because it would bankrupt the nation if calculated properly. And so, the best the nation could do in the name of reparations is to commit to educate every Black child, kindergarten through college, and to treat it as a forward investment in the nation, by the nation, [and] in partial consideration of all those who built the nation for free.
All of this said, reparations alone are not even the key, but what was really lost was a measure of our self-esteem, and self-belief. We were never given The Memo (my last book), on how this free enterprise and capitalist system works. We were never taught, how to come Up From Nothing (my current book), and the necessity of this winning mindset. And, we never gathered the necessary relationship capital required to succeed in a capital system, [which] requires the right mindset and the access to sustainable opportunity…So no, money alone won't do it, even though it would make many feel better. What was robbed must be repaired, and not simply paid for.
What Black Americans need today
What Black America needs now is a massive education on money and how it works (financial literacy); along with computerization and technology (both of these should be required classes before end of high school); an investment in graduating youth either through a dedicated internship for a corporate job; or an ability to create a job through the creation of a small business (with modest venture funding and technical assistance support). Operation HOPE has leaned in here, with our One Million Black Business and Entrepreneur Initiative (1MBB), backed by a $130 million commitment from Shopify.
Response to business leaders who feel racial and social justice issues are not their problem
Business leaders who do not believe that social justice and racial issues are their problem probably should just retire before they embarrass themselves in public. The reality is, the world just changed. Right before our very eyes, and it is not (thankfully) going back to the way that it use to be. Employees, customers and shareholders are demanding a different kind of thoughtfulness from their CEO and other leaders. They don't just want to be sent a dividend payment, they want sustained and authentic brand equity as well. And one more thing — the math is against this type of leader. If you want to find economically prosperous and growing companies, cities and regions, look for those that are diverse and inclusive. This is not soft soap, wishful thinking, but the math of the matter. To quote my friend Mellody Hobson, 'I like math, because it doesn't have an opinion.'
Janice Bryant Howroyd
Founder and CEO of The ActOne Group
Why the topic of reparations is complex for some
The topic of reparations as a tool for narrowing the gap between Black and other Americans is complex for many reasons. While a number of creative iterations of how reparations might be administered have long and publicly been discussed, the topic remains, for some, controversial and hard to evaluate.
One of the biggest logistical challenges in discussing reparations for the African American descendants of slaves lies in the amount of time that has passed between each successive injury committed against these Americans and other Blacks who have assimilated/integrated into the common population racially. Reparations have proven to be a successful way to ameliorate damage done to a group by the state that caused the injury, especially when that injury was done acutely over a clear time period.
While reparations cannot fully undo the psychological and cumulative emotional trauma of severe oppression, they have worked to some degree to help repair lasting socio-economic damage. That, in turn, allows generations to progress and heal to the point where individuals can participate in the economy fully.
When Japanese Americans were given reparations for the years that the U.S. conducted the policy of internment, they were able to use those funds to purchase homes, start businesses and begin to rebuild families and communities. Today, descendants of these Japanese Americans have economically benefitted from reparations to a point where economic accomplishment can indicate reparations can be an effective tool, even as social discrimination is not eradicated.
Today, Black Americans descended from slavery continue to have the lowest generational wealth of any Americans, and this is statistically borne out. Yet, how would America calculate appropriate compensation for hundreds of years of slavery and the wealth it built, alongside post slavery damages that were lawfully incurred and encouraged? With America's particular, continuous harsh treatment of African descendent people, how would we determine who qualifies?
An alternative solution
Because traditional "reparations" are so complex, perhaps an approach to what has been lumped together as "diversity" in education and business spend can be made that separates out "Black" spend as its own category and sets targets specifically for Black diversity and inclusiveness. It might be labeled RI, Reparative Inclusion. Diversity inclusive of all people is its own worthwhile goal and benefits the institutions and organizations that embrace it. Yet, there are really two objectives at play:
1. Creating diverse thought and inclusion that mirrors the actual makeup of America
2. Closing the wealth gap created specifically by U.S. policy toward Black, slave descendant Americans
Unfortunately, when all diversity spend or representation is counted as one block, it only addresses the first of its two goals. Those groups who are better positioned to take advantage of opportunity will be over-represented in that spend or in those metrics. When diversity spend is broken down, Black Americans represent the smallest percent, despite making up a significant portion of population, and despite being the group with the most ground to make up. This is particularly ironic given that without the national shame of slavery, it is dubious to think our country would have been moved to create diversity programs in the manner we have. The mistreatment of Black people was the driving force in shaking the tree, yet Black people collect the least of the fallen fruit.
Chairman and CEO of OneUnited Bank
On if reparations is key to closing the racial wealth gap
Reparations are required to compensate Black Americans for the economic damage that has been inflicted upon us as a result of both illegal and unjust actions taken by white Americans and/or governmental entities.
Reparations should take many forms, including provision of economic opportunities; cash and property damage awards; and provision of social programs designed to overcome the life challenges caused by this country's history of systemic racism.
Key components to building wealth for Black Americans
I believe the two key components for building wealth for Black Americans are:
1. For white Americans to be trained on the moral and legal obligations to be "anti-racist" because systemic racism is the primary barrier to the economic prosperity and social and political justice for Black Americans.
2. Black Americans need to understand the key transactions and activities that will allow us to be effective in building wealth and our leaders need to take actions to make financial literacy a core value for Black Americans. OneUnited Bank is hosting its virtual OneTransaction Conference on Juneteenth to discuss the financial steps needed to close the racial wealth gap.
President and CEO of The Executive Leadership Council
On the possibility of Black people receiving reparations
Every year we have the same conversation about what reparations will or won't do, but never have we as Black people had the luxury of actually benefiting from this hypothetical conversation. While it would be great to see the country finally taking the issue of reparations seriously, I believe the Black community is more interested in investing in our own path toward economic inclusion and creating generational wealth.
What the ELC is doing to build Black wealth
We're taking the issue of wealth creation in the Black community head on. We're announcing a new philanthropic initiative to strengthen, diversify and expand our organization's commitment to propelling upward mobility in the Black community. "Build. Grow. Protect!" is an initial three-year, $6 million investment strategy that will build capacity in nonprofits, create programs that will help grow wealth and invest in programs designed to protect the civil rights, history and culture of Black people in America. We believe these proactive strategies are the way forward.
Response to corporate leaders who believe racial and social justice issues are not their problem
If you are a corporate leader who feels like racial and social justice issues are not your problem, you should not be leading an American or, better yet, global corporation. Racial and social justice issues aren't Black issues, they're corporate issues, they're people issues, they're American issues. They challenge our values as a country, while underscoring our collective struggle for equality. Corporate leaders should understand that the battle for racial and social justice will not be won by writing statements or issuing unfulfilled promises to diversify their companies and leadership. They have a choice to do more, and their actions will speak louder than their words.
*These interviews have been edited and condensed for length and clarity.
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