Skip to content Skip to footer

Baby Bonds Are a Revolutionary Way to Close the Racial Wealth Divide

“Baby bond” accounts for all American kids would bridge the racial wealth gap.

“Baby bond” accounts for all US kids would help bridge the racial wealth gap and provide increased financial security for people without access to family wealth.

The gap between America’s ultra-wealthy and the rest of us is growing dramatically as wealth continues to concentrate at the top at the expense of the rest of us. One major symptom of this economic rift is the racial wealth divide, which is greater today than it was nearly four decades ago.

The median Black family today owns $3,600 — just 2 percent of the $147,000 of wealth the median white family owns. At the extreme top, the Forbes 400 richest Americans own more wealth than all Black households, plus a quarter of Latinx households, combined.

When analyzing the racial wealth divide, it’s important to note that this is a systemic issue — a result of policies, not individual behavior.

Darrick Hamilton, the executive director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State, emphasizes that the key ingredient of how successful you’ll be in America isn’t how hard you work individually — it’s how wealthy your family is.

For instance, the racial wealth gap continues to grow despite rising rates of Black employment and education. These other things simply can’t make up for enormous, systemic disparities in family wealth.

Hamilton’s proposed solution? “Baby bonds.”

Baby bonds are federally managed accounts set up at birth for children and endowed by the government with assets that will grow over time. Neither the child nor their parents would be able to access these funds until the child reaches adulthood, at which point they could use the money to get an education, purchase a home, or start a business.

Baby bonds could play an essential role in balancing the historical injustices that created the racial wealth divide.

One recent study shows a baby bond program has the potential to reduce the current black-white wealth divide more than tenfold. Another shows that had a baby bond program been initiated 40 years ago, the Latinx-white wealth divide would be closed by now — and the black-white wealth divide would have shrunk by 82 percent.

Baby bonds are an essential, universal, race-conscious program to provide everyone with an opportunity to start life off secure, irrespective of their race and the financial position in which they’re born.

And they’re just one of 10 bold solutions offered in a new Institute for Policy Studies report on closing the racial wealth divide, which counts Hamilton among its coauthors.

“Large scale policy change,” it concludes, “is the most promising path to addressing the racial wealth divide and many asset poor whites as well.” The report also recommends solutions ranging from Medicare for All and higher taxes on the wealthy to setting up a congressional committee to study reparations.

Just like all other issues of inequality in America, the racial wealth divide is a structural problem that requires structural solutions. In order to create economic prosperity for every American, we must start with taking bold action to close the racial wealth divide once and for all.

Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn

Dear Truthout Community,

If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.

We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.

Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.

There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.

After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?

It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.

We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.

We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.

Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.

We’re with you. Let’s do all we can to move forward together.

With love, rage, and solidarity,

Maya, Negin, Saima, and Ziggy