When Will There Be an Accounting for Segregation?

Americans are increasingly aware of the racial wealth gap and the state and federal policies that not only created this inequality, but also deepened it over many generations. Yet conversations about the racial wealth gap have not given segregation, aside from the subject of residential segregation, the attention it deserves. To be sure, residential segregation is part of a broader program of segregation in the United States, a program that made the activities undertaken by African Americans—from renting property to gaining an education—more expensive, while also excluding Black people from opportunities to make economic advances.

Ta-Nehisi Coates has described segregation as “plunder”—as the redistribution of African-American wealth to white people and the institutions that operated to benefit white people. Coates’s understanding of Jim Crow—along with slavery and an unjust incarceration system—as systems of plunder is an important part of his argument in favor of reparations. While many scholars have been aware of segregation as a system with economic consequences for quite some time, they tend to marginalize this aspect, focusing more on its political and psychological effects. Yet Jim Crow was fundamentally an economic system, influencing what work people did, how well they were compensated for their labor, and what standard of living they were able to afford. The impacts of this racialized economic system last to this day.

Jim Crow as an Economic System

Much has been written on the costs of slavery to enslaved people, who were torn away from their families by sales and subjected to increasingly harsh violence as cotton growers sought to extract more work in order to meet expanding demand. Those who survived slavery left the institution with “nothing but freedom” and little prospect of gaining wealth. Because slavery functioned by stealing the labor of enslaved people and denying them ownership of resources, it makes sense that scholars would understand it as an economic system—one that left African Americans at a deep disadvantage in their efforts to gain wealth. But Jim Crow did these things, too.

Historians tend to treat Jim Crow almost exclusively as a legal, political, and cultural system—shaping where African Americans were allowed to go, whether they voted, and how they acted in public. Let us pause to consider another important aspect of Jim Crow—to think of it as an economic system that imposed financial burdens on African Americans.  I will not attempt to tally these costs, but to point to some of their shadows. Rather than focusing on isolated examples, these are elements of a broad system of economic confiscation and exclusion—a system that contributed to the depth and width of America’s racial wealth gap.

Southern states enacted the first Jim Crow laws during Reconstruction and the bulk of them just after the turn of the twentieth century. The segregation of public spaces served a number of purposes beyond ensuring that “social association” did not take place. It worked to mark Black and white people as different—and one as inferior to the other after the institution of slavery had ended. Segregation also went hand in hand with disfranchisement. Wishing to rein in Black voters and their white allies in the Republican and Populist parties, the Democratic leadership envisioned segregation as a way of preventing lower class whites from aligning themselves with Black voters.

Maintaining a hierarchy with one group permanently on the bottom proved beneficial not just for the political adversaries of African Americans, but also for employers.  When slavery ended in the United States, white southerners attempted to replace slavery with other methods of controlling the labor of Black people. They forced African Americans to sign labor contracts through Black Codes and lynched thousands of Black people, which worked to create a climate of fear that made sharecroppers and tenants less likely to fight against the terms of their labor, for example. Over time, they came to segregation, which limited the opportunities of Black workers, forcing them to accept the only jobs available to them: agricultural and industrial jobs that paid lower wages to African Americans than to whites in the same roles. Stuck in jobs relegated to people on the bottom tier, with no prospects of advancement, African Americans were made a class of low-paid workers.

Confiscating Wealth from Blacks through Taxes and Residential Segregation

While African Americans were underpaid, they still paid their share of taxes. Segregated public spaces excluded Black people from institutions and amenities that they helped to fund through tax dollars. As contemporary observer Stetson Kennedy pointed out, “virtually all of the public swimming areas in the segregated territory have been reserved for whites only, including those which have been purchased and operated with tax money”—money coming from both white and Black taxpayers.  More significantly, Black would-be college students who were denied education at public universities were also robbed of the education their families funded through taxes. African Americans wishing to use public libraries were also confronted with roadblocks. In order to give himself an education using his local public library, Richard Wright borrowed a library card from a white man, then pretended that the books he checked out were requested by this white man. In all of these examples, money was taken from African Americans and funneled into “public” resources reserved for the use of white people.

At the same time these public resources were segregated, urban neighborhoods were also becoming more segregated. Planners were designing segregated suburbs, often utilizing restrictive covenants (private agreements that prohibited property owners from selling their property to nonwhites). Through its various programs, the federal government also reinforced housing segregation. For example, the Home Owners’ Loan Corporation designated Black and mixed-race neighborhoods risky investments (whether the residents were poor or middle-class) in appraising the credit-worthiness of neighborhoods starting during the New Deal. This process, called redlining, not only deterred investment in Black neighborhoods, but also decreased home values for those African Americans who did own their own homes.

Thanks to restrictive covenants, redlining, the unwillingness of realtors to show them properties in white neighborhoods, and other measures, African Americans found themselves living in all-Black neighborhoods. Tax dollars were taken from them directly (as property owners, through taxes) or indirectly (through rent) for municipal services like streetlights and sewage, but little was given them in return; Black neighborhoods provided few services and poor schools compared to those in white neighborhoods.

Black buyers, even while they received fewer municipal services, also found themselves paying above the white market rate for properties. For example, in a tactic called “blockbusting,” realtors purchased properties from a few white people, then sold these properties at inflated prices to African Americans eager to move into better housing stock. As these Black buyers moved in, white homeowners fled, selling their property to realtors at low prices. These properties were then resold to Blacks at high prices. Through blockbusting, realtors extracted money from both white sellers and Black buyers. Of course, buyers and renters who paid more money for their homes had less money available to spend on their other expenses—including, for buyers, the principal on their property, and for renters, a down payment on a home of their own.

By the 1970s, African Americans became targets of what Keeanga-Yamahtta Taylor terms “predatory inclusion.” The real estate and banking industries sought out poor Black women for high-interest loans, knowing that these borrowers were likely to “fail to keep up their home payments and slip into foreclosure.” It was the poverty associated with living in the “ghetto” that made these borrowers targets of unscrupulous bankers.

The Costs of Segregated Education and Low Expectations

The economic consequences of segregation are visible, too, in education. White southerners did not support universal public schooling for African Americans during the age of Jim Crow. This meant that Black southerners had to scrape together what money they could to educate their children. In many places in the South, there were no schools for Black children. The education of Black children conflicted with the desire of white landowners to use cheap labor to plant and harvest their crops; children were the cheapest workers available, and the crops would not wait for the school term to finish up.

By the 1910s, aware that the desire to educate their children was one factor propelling Black workers to migrate to the North, white leaders in the South had become somewhat more open to educating African Americans. The Julius Rosenwald Fund sent money from the North to help pay for the construction of schools for Black children in the rural South, while African Americans also contributed cash, labor, and tax dollars. By the 1930s, a system of public education was available for African Americans in the South. Outside funding was essential to the project of providing schools for Black children, as white leaders in the southern states would not use the funds contributed by Black taxpayers for Black schools. After disfranchisement, less and less money was put toward educating Black students, as African Americans could not advocate for themselves politically.

Between 1900 and 1910 (the set of years during which disfranchisement was rolled out), less money was spent on Black education per student, school terms for Black students were shortened, and salaries paid to Black teachers were cut in the southern states. Less money was spent on the education of African Americans than Blacks paid in tax dollars; the money that Black taxpayers paid into the system was siphoned off for white schools. This trend meant that African Americans experienced “double taxation,” according to James D. Anderson. “Southern public school authorities diverted school taxes largely to the development of white public education,” and Blacks responded by “making private contributions to finance public schools.”

It is important to note that Black schools, even while they were short on resources, were successful in some ways. They helped to strengthen Black communities and inspired pride in students. But segregated schooling did exact a cost, and it continues to do so. African American students often attend underfunded schools in inner cities, where they receive educations inferior to those offered in nearby suburbs and where they are not prepared to do well in college. Attending these schools, Black students, we can assume, also miss out on the opportunity to cultivate what Pierre Bourdieu calls the “cultural capital” and “social capital” that would allow them to more successfully network with elites once they enter the workforce. Cultural capital includes things like accent, tastes, modes of behavior—qualities that make someone seem to fit within a particular group or class, while social capital describes a person’s social network. It is at the moment of entering the workforce that these other types of capital most directly connect to economic capital. According to sociologist Lauren Rivera, the people responsible for hiring at high-status companies tend to prioritize cultural fit when considering job candidates. How much status and income have been lost to capable African Americans had they been given a decent education and access to this culture?

And what are the economic consequences of a feeling of inferiority, or of what Nell Irvin Painter calls “soul murder”?  In The Fire Next Time, James Baldwin describes the low expectations that white society held for African Americans: “You were not expected to aspire to excellence: you were expected to make peace with mediocrity.” The effect of low expectations, of course, is that often one is unable to see oneself in positions beyond the lowest ones. By putting Black people on the lowest level of society and expecting that they stay there, Jim Crow dampened their aspirations. While it may be impossible to measure the cost of low aspirations—the lost esteem and pay due to the doctors and lawyers and professors who might have been—it is worth noting that there is indeed a cost.

Measuring the Costs of Jim Crow

Why is it that the economic aspect of Jim Crow does not get the attention it deserves, outside of the scholarship on residential segregation? Part of the problem is that there are incorrect or inadequate assumptions at play: that Jim Crow was driven by racism alone, by a distaste for African Americans and fear of intimacy with them. Racism is not sufficient in explaining this program. The larger story includes financial advantages to whites—to elites who maligned and segregated African Americans in order to justify disfranchising them and underpaying them in the jobs set aside for them, as well as poor and middling whites who enjoyed elevated standing in their communities compared to African Americans and with this, access to better jobs.

Surely, too, evidence can be difficult to access. For example, while enslavers left account books showing how much labor they stole each day from their enslaved workers, it is difficult to quantify the wages lost due to a system of segregation that labeled certain jobs “Black-only” and others “white-only.” The larger problem is that the most significant costs of segregation are related to activities that never happened, because segregation prevented them from happening—such as, for example, African Americans taking advantage of better schools and networking opportunities to advance in society. Ascertaining the economic toll of Jim Crow is a daunting task, but an essential one for those of us who wish to understand the extent of inequality in America and the myriad ways that white supremacy impoverished African Americans over the generations.

About the Author: Elizabeth A. Herbin-Triant, an associate professor of Black Studies and of History at Amherst College, is the author of the essay “In Search of the Costs of Segregation,” published in Reckoning with History: Unfinished Stories of American Freedom, from which this article has been adapted, as well as the book Threatening Property: Race, Class, and Campaigns to Legislate Jim Crow Neighborhoods.

Cover Image: San Francisco NAACP members are seen during a ‘Don’t Ride’ campaign urging riders to boycott Yellow Cab and help stop discrimination when hiring drivers.  Cox Studio, San Francisco, CA 1955. Washington, DC, Library of Congress, Prints and Photographs Division.