- The myth is that anyone who works hard, saves their money, and makes good decisions can develop wealth in the United States.

But today's guests document the long and painful history of the structures, policies, and practices that have resulted in a profound wealth gap between Black and white Americans.

Louise Story and Ebony Reed join us this week on "Story in the Public Square."

(bright rousing music) (bright rousing music continues) Hello and welcome to "Story in the Public Square" where storytelling meets public affairs.

I'm Jim Ludes from The Pell Center at Salve Regina University.

- And I'm G. Wayne Miller, also with Salve Pell Center.

- This week we're joined by two distinguished guests.

Louise Story and Ebony Reed are journalists and co-authors of an important new book, "15 Cents on the Dollar: How Americans Made the Black-White Wealth Gap."

They join us today from New York and Kansas City, do I have that right?

- That's right.

Kansas City, Missouri.

- Thrilled to be with you and congratulations to both of you on just really a remarkable and important book.

Louise, would you give us just a quick overview of the book?

- Sure, the book is a narrative.

It's like a novel.

You follow seven people and their families and you're gonna wanna know what happens to them.

And these people range from Michael Render the Grammy winning rapper known as Killer Mike, to Andrew Young, to other people that you haven't heard of before who are really interesting and inspiring.

But along the way in this narrative, you learn a lot because this is the most comprehensive book on the Black-white wealth gap through all of history.

We cover the data, we cover the causes, and so that's interwoven in the stories of these people who we spent the last three years following.

- And the stories that you tell are compelling in their own right.

We're gonna talk about some of them in just a little bit.

But Ebony, how did the two of you come to write this book together?

- Yes, so Louise and I were colleagues working together at "The Wall Street Journal."

In the summer of 2020 like everyone else, we were in our homes, we'd had the pandemic, the lockdown, and so we were talking on Zoom sometimes in the evenings, the weekends, we started reading books, having conversations about things we had seen in the workplace and in our lives that intersected with race and money and inequities.

And before we knew it, we were down the path on this project.

We had never seen or read a book that brought the Black-white wealth gap from history to present day.

And so we thought given our backgrounds with Louise's work on Wall Street, some of the community work I had done, that we were the perfect pair to come together to write this book.

- So Louise, were there specific myths or misunderstandings that you wanted to correct in writing this book?

- Well, we found over time as we talked with people about this, that there's a lot of people who think the Black-white wealth gap has gone away.

We have just been through decades where there has been affirmative action and there has been a push in companies to diversify hiring and a broadening somewhat of the housing market and that's left a misimpression with a lot of Americans that the Black-white wealth gap is gone, or that it's much smaller than it is and that misimpression exists with white Americans, but even Black Americans think it's smaller than it is.

And so we realized it was very important to get the actual facts out so people would have the facts when discussing all kinds of topics like banking and education.

And that's why we called our book "15 Cents on the Dollar" because right in our title, we are spreading this data so more people will know about the Black-white wealth gap.

- So Ebony, Louise already mentioned that gap.

I was stunned by this.

So for the average white wealth in the United States based on 2022 US government data is that the average white wealth is more than $1.3 million per household and only $211,600 per Black household.

That's a staggering disparity.

And again, the book details this at length, but why tell this story through the collective lives that you present to us in the book rather than just giving us all the data?

- Right.

So a lot of times data can seem faceless.

You know, it's just numbers.

And one of the things that we do in this book project is that we are putting a face to the data by the stories of the people.

So when people read that data and learn, and that's Federal Reserve data, it comes from a consumer finance survey that comes out every three years.

And like you said, 2022 is the most recent data released last year in 2023 and it showed that the typical Black family had 15 cents in wealth for every $1 in wealth the typical white family had.

And that was true in the mean, which is the average, and also the median, which is the middle number when you line up all the numbers in a distribution.

So one of the most common questions that Louise and I receive from people is if people who were uber wealthy were removed from the distribution, would the wealth gap go away?

And the answer to that is no, because we see the disparity with this number in the mean and also in the median.

But I think when people connect with the stories of the families and they learn about them, then they will really feel the emotion of what is behind the numbers.

- So Louise, tell us about Greenwood Bank.

Who founded it, where and why?

- So Greenwood was founded in 2020.

You remember there were lots of companies making pledges to try to address racial inequities and there were new companies being founded.

And Greenwood was founded by Andrew Young, who is a former mayor of Atlanta and a civil rights leader who was alongside Dr. Martin Luther King in the 1960s.

So he co-founded it with Michael Render, who's a rapper known as Killer Mike, and also Ryan Glover, who is an executive from the entertainment space.

And they founded this bank, they called it Greenwood Bank, but as you'll read about in our book it's not technically a bank, but they originally called it Greenwood Bank and they founded it with a stated mission of helping to close racial wealth gaps.

- The story of Greenwood Bank is a through line for the entire book and it doesn't end the way I had hoped it would end, let me just put it that way.

But the data that you present in that discussion though about the prevalence of Black-owned banks in the United States, I think that the number that you said was that out of 5,607 US banks, there are only 24 Black-owned banks in the United States.

What explains for that disparity?

- Banks to some degree lend to the people who are in their community.

And so this is a bit of a cyclical kind of an issue that it's a chicken and egg here, right?

Which is that part of the reason there aren't many Black-owned banks owned by Black people is there haven't been a lot of Black wealthy people to own banks.

But then the Black people who have founded banks, when they lend to Black communities, many of which were redlined and had historic mistreatments in those neighborhoods, those loans sometimes can end up having more credit risk and that can be a more difficult path as a bank to bank in those communities sometimes because of historic inequities.

And so it's been very difficult for Black-owned banks to be established and to survive.

And that's a concern for people who are concerned about equity and banking not only because if you don't have people running banks who understand all communities in our country, it's hard to serve them and also because banking is an area where a lot of wealth is created.

And so if we don't have Black professionals rising up through the ranks, running banks and ultimately owning them, they aren't making some of the wealth that goes to senior bankers and bank owners.

- And does that feed then into reinforcing the kind of inequity that you're describing in terms of the wealth gap over time?

If there aren't banks serving Black communities, that has to have a negative effect on just the accumulation of wealth in those communities.

Am I oversimplifying that?

- It absolutely does and that's both because of the borrowers, if people aren't able to borrow money from a bank to start a business or to buy a home and it's also because of the owners of the banks.

If you don't have Black people owning banks, in general, if you don't have Black people owning businesses, they don't make the kind of increased capital that's a big wealth creator for many white Americans.

- So Ebony, can you tell us about the name Greenwood Bank, where it came from, what is the history behind it?

'Cause it does have a significant historical impact.

- Yes, Greenwood was a district in Oklahoma where there was a massacre that occurred and the Black business district was decimated.

And so this has become an area that people have studied and looked at what happened there because of the economic impact of that district being destroyed.

But it wasn't the only, as people will see in our book, it wasn't the only business district or area where there was Black prosperity that was destroyed due to multiple issues in society.

- Given that history and you named some of those places in the book, Wilmington, Delaware, Washington DC, various places in Florida and Atlanta, Georgia itself where a lot of this book takes place.

Given that history of violence targeting African American, Black affluence over the course of the era since the end of the Civil War, how do we then view the creation of Greenwood Bank by these entrepreneurs and community leaders in 2020 set against the backdrop of the murder of George Floyd?

Louise, do you have any thoughts on that?

- Well, Ebony and I viewed it with hope and as something that offered promise and so we went in optimistic about Greenwood Bank as did many customers.

They had many, many people, hundreds of thousands register very quickly for Greenwood.

But the reality as you learn as you read through the book is that it's very difficult and complicated for any entrepreneur, white or Black, to set up a new company and there's more significant barriers for Black entrepreneurs and to bank for a non-white community.

And we tell the story of that in the book.

So what it said to us is, "Look, here's some leaders from the Black community, Andrew Young, Killer Mike, Ryan Glover, with good intentions trying to do something to help address the Black-white wealth gap, but wow, it's hard, it's complicated and what it means to address this gap is nuanced."

And we learned that throughout the course of this reporting.

- So Ebony, were American finances always segregated?

Can you give us some history on that, please?

- Sure.

So yes, American finance has a deep history in segregation.

If we go back to the beginning of time where Black Americans came to this country and they were enslaved people, they were not paid for their labor and the people who own them made money from that.

We also discussed in the book the insurance industry and the insurance industry as it pertains to life insurance was established, well, let me say it this way.

Black Americans who were enslaved were some of the first insured people, and the benefits of the insurance on them went to their owners, not their families.

So from the very beginning, we see economics and segregation of money in our country and we don't see Black Americans benefiting from it.

- Yeah, I think the question that I want to ask and given that long history and the struggles that you document in the book, can those finances be desegregated?

Ebony, let's stay with you on that.

- Well, I think that that would be incredibly difficult in our times of today.

At one time when Black Americans, so post-slavery, began to move into communities and there were thriving Black business communities.

We referenced Tulsa earlier, and money was circulating in those communities.

But as people have moved into other communities, been integrated in some parts of our country, there still are the impacts of redlining in many cities.

But we also see the impact of technology and people buying goods online.

And that is referenced in our book as one of the things that makes it complicated to segregate money.

- So Louise, the wealth gap between whites and Blacks also stems from government policies and we want to talk about a number of those.

Let's start with the New Deal policies of the Roosevelt era.

What impact did that have?

- Well, this was an era in which much of the middle class of this country was created, but it's important we understand this is an era in which much of the white middle class was created, right?

So depending on your reference point in your family and your family's lived experiences, this era was very different for you.

So the New Deal programs and also the GI Bill, which came out following World War II, were technically open to any American no matter the color of your skin.

However, in the New Deal, they were for certain industries which tended to be populated more by one race or another, for example.

And it was also around housing where strong redlining existed and so that affected Black and white people differently.

And with the GI Bill, actually, a million Black people served in World War II and only 3% of them were able to take advantage of the GI Bill because of local discrimination.

So these federal programs were locally administered and on the ground they were not administered fairly.

And so a lot of Americans may not realize that these programs, white Americans may not realize it, benefited their grandparents but that it did not benefit the grandparents of perhaps Black individuals that they work with.

And so creating a lot of money and benefits from one part of the population and not the other widens the gap.

- I think you also document the way the federal government finances housing and also the way it writes banking rules also tend to benefit white Americans more than Black Americans.

Louise or Ebony, I'm not sure who's best to answer that question, but can you shine some light on how those federal rule making tends to benefit white Americans more financially?

- Just to clarify, I'm not sure what era you're talking about with the question.

- Middle of the 20th century, same era.

- The housing rules, we wrote a link about what happened in redlining and how first with the HOLC and then with the FHA.

At first the HOLC actually did buy out loans and refinance loans for Black and white Americans and we chronicle how they did do that for a number of Black Americans, although not so many Black Americans owned homes but they did do that.

But as the FHA got going, there were maps that were introduced and that were used that essentially warned banks against issuing mortgages for certain neighborhoods.

So even though a bank could go get work with the FHA to get insurance and ensure a mortgage loan which that is subsidizing the loan 'cause it can be resold into the secondary mortgage market, they could go do that for any loan theoretically, but the loans had to meet FHA criteria and the FHA criteria did warn against a lot of different characteristics of homes and neighborhoods that tended to mean that Black Americans were excluded from getting FHA insurance on their mortgages.

- So Ebony, we want to get into some of the people you wrote about and introduce us to Brook Bacon, please.

Who was he?

- Sure.

Brook Bacon is Black man who lives in New Hampshire.

He had lived earlier in his life with his mom in a part of Georgia that's on the eastern part of the state.

His mother had raised him as a single parent and had to move often as she sought better economic opportunities.

When he was in college, he faced a challenge where he did not have a co-signer for a student loan.

He had already been enrolled in school and he had to leave because he did not have enough funds to continue and he didn't have anyone in his family to co-sign for him.

Later in his life he married his wife, he had moved to New Hampshire, he was living his life.

The summer of 2020 hit so to fast forward to that and his father was killed by the police in Georgia.

- Ebony, one of the things that you and Louise write about is Brook's reflection about the sense of security that he felt as a Black man living in New Hampshire that I thought this quote was powerful.

He said or you wrote, "Brook said it was wealth and community that moved the needle of risk for Black people.

'If you can find a way into a community, they know that you've crossed the barrier of wealth and they don't perceive you as much of a threat.'"

That was I thought, a profound statement by Mr. Bacon.

Can you unpack that a little bit for us?

What's he getting at there?

- Well, Louise actually spent quite a bit of time talking with Brook and his wife Shayla.

And so I was actually thinking that Louise would be good to also weigh in on this as well.

- Yes, when Brook was talking about that, we were on a 63 mile justice walk with him.

It was a justice walk for his father and so I was right up there walking next to him for a lot of it.

And he had chronicled and detailed to me about all the places his mother moved to try to bring him to a part of the country where he could thrive and that he could get an education and get a good job.

And they were essentially searching for a community in which they could thrive, and they weren't able to find it over and over and over again.

In fact, one of the first things his mom said to us was what she learned in the course of her life is there is no promised land.

But ultimately, Brook found this community through his biracial marriage.

As Ebony mentioned, he married a white woman, moved to a community in New Hampshire that she's from, where her family is, a largely white community, and that's where he lives, he has community.

And what he was explaining to me is that part of what you have to do as a Black individual in this country is you have to be a known commodity among people to be able to move away from some of the threats that you just face because of the color of your skin.

And that's really an extra step that Black Americans have to take to be integrated into a community that some white Americans might not need to.

- So Ebony, can you tell us about the impact of the 2008 financial crisis on wealth and equity?

- Sure.

So in that crisis, many Black Americans, a large percentage of Black Americans lost their homes to foreclosures, short sales.

We of course saw job losses in our country, but on the housing piece, people who lost their homes coming out of the 2008-2009 economic crisis, not all of them went back into home ownership.

And part of that had to do with wealth that they lost in that period, the complications of how challenging it can be to actually find and buy a home because many homes now are actually rented that were formally single family homes for purchase.

And so Black Americans, many of them are still trying to rebound from that economic crisis.

- So Ebony, can you break that down a little bit more for us, the repercussions of 2008 on Black people today?

There's certain, as you mentioned there, the inequities continue, but home ownership seems to be a dream for many still.

- Right, so the home ownership rate for Black Americans is right around 45%.

For white Americans, it's right around 75%.

So there is still a huge gap between the races in terms of home ownership.

And that has a huge impact in regards to wealth.

The main drivers for wealth in our country are inheritance.

Another large driver on wealth is stock ownership, which we also cover in the book.

And another input into wealth is home ownership.

So when people don't have home ownership, then that impacts their ability to be able to accumulate and grow wealth.

If we think back to the pandemic summer of 2020 and within a year we begin to see home prices begin to rise, people who had come out of the 2008-2009 economic crisis and had not gone back into home ownership, meaning that they were renters and they did not buy homes, they could not take advantage of the growth in equity that was built up as home prices began to rise across our country.

- We could talk to you for a week about this book.

Louise, you mentioned at the start that the book reads like a novel and there's definitely a narrative arc and there are through lines throughout it.

When I began reading, I don't know why I thought that there would be some sort of happy ending, even though we know right in the title that 15 cents on the dollar is how the story ends.

But I got to the end sort of down because the lives that you chronicle in here, there aren't really any happy endings here.

And what I'm wondering is in writing this book and you think about your audience, if your audience cares about these issues, what can they do to be engaged in them?

We got about a minute left here.

- Sure.

We give personal recommendations at the end of the book on things that people could do in their own lives that will affect how they view the world and we think if people did these things, it would start to change communities in our country.

One of the recommendations is that people should find a way in their life to partner with someone very different from them.

Ebony and I have a partnership across racial lines.

And in that, we've learned from our reporting and our research, but we've also learned by trying to make our partnership fair and thinking about things like time and money and our networks.

And when you try to do that with someone else and you really think about making it fair, that will teach you about your community and our country and about the kind of give and take that we need and the empathy we need to have for other people's situations and understanding people don't have the same situation as each other and you can learn in partnership.

So that's one of our recommendations and we have five others in there.

- Super, it's a great place to leave it.

Louise Story, Ebony Reed.

The book is "15 Cents on the Dollar."

Thank you so much for being with us today.

That is all the time we have this week.

But if you wanna know more about "Story in the Public Square," you can find us on social media or visit pellcenter.org where you can always catch up on previous episodes.

For G. Wayne Miller, I'm Jim Ludes asking you to join us again next time for more "Story in the Public Square."

(bright rousing music) (bright rousing music continues) (bright rousing music continues) (bright music) (no audio) (no audio)