What are Slavery Reparations?

Slavery reparations are restitution payments for slavery remitted to the descendants of enslaved people. In theory, American slavery reparations would be paid by entities that participated in slavery, such as the federal government, local governments, corporations, and universities.

The history is complicated, but the overall principle is simple: Slavery helped the United States become a formidable economic power. It had the opposite effect on enslaved people and their descendants, stripping them of wages, property, civil rights, and freedom. Since the 13th Amendment to the Constitution was passed and ratified in 1865, ending legal slavery in the U.S., no sustained attempt has been made to right this disparity, adding additional weight to the strong case that reparations would still be beneficial today.

Key Takeaways

  • Reparations would compensate Black Americans for the lost wages and suffering of their ancestors, American slave laborers.
  • The US received an enormous, unacknowledged economic boost from slavery. 
  • Subsequent biased policies—including segregation, labor discrimination, redlining, and mass Incarceration—have disadvantaged Black Americans, preserving a racial wealth gap.
  • The one Federal reparations attempt was discontinued after President Lincoln was assassinated
  • More than150 members of Congress support a bill to create a commission to study the issue; a slight majority of Americans favor this approach, as well. 
  • Native Americans and Japanese internment victims received Federal reparations.
  • Current proposals for Federal reparations include payments to African Americans and economic development investments in the Black community.
  • In 2020, California became the first state to commission a task force to study and develop reparations proposals.

The History of Reparations

On January 16, 1865, from a mansion in Savannah, Ga., Union General William Tecumseh Sherman issued Field Order No. 15, announcing the award of large tracts of confiscated land to newly freed Black populations. The roughly 400,000 acres to be awarded: "The islands from Charleston, south, the abandoned rice fields along the rivers for thirty miles back from the sea, and the country bordering the St. Johns river, Florida."

The land, which included Georgia's Sea Islands, was to be given out in parcels of "not more than (40) acres of tillable ground." The new owners' rights were to be protected by the military authorities until they could protect themselves or Congress could "regulate their title." And they were to govern those lands themselves: "...sole and exclusive management of affairs will be left to the freed people themselves, subject only to the United States military authority and the acts of Congress.," the order declared.

This idea did not just happen. Four days before, as historian Henry Louis Gates, Jr., explains, Sherman and Lincoln's Secretary of War Edwin M. Stanton met with an invited group of 20 leaders of the Black community of Savannah, many of them Baptist and Methodist ministers. These leaders explained that what the newly freed people wanted was to have their own land and to live in communities on it, managing their own affairs.

The land grant program became colloquially known as “40 acres and a mule”—the mule part coming later, as historian Henry Louis Gates, Jr., explains, when Sherman subsequently ordered that the Army could lend mules to the settlers.

Word of Sherman’s order spread quickly and the islands seemed to transform into Black autonomous farming communities overnight. The inhabitants of the islands renamed them Shermanland in gratitude.

The federal reparations experiment was short-lived, however. After Abraham Lincoln was assassinated in April 1865, his successor, Andrew Johnson, canceled the program and returned the land to the planters who had originally owned it. Since then, for more than 150 years, groups have been advocating for reparations.

Slavery Reparations Today

The effect on the wealth and economic standing of Black Americans of generations of enslavement—and the structural racism following emancipation—has never been fully mitigated and exists to this day. With the increased attention on race relations and equality brought on by the Black Lives Matter protests, the issue of reparations has come back into focus.

  • In the 2020 Democratic primary, Presidential candidate Marianne Williamson campaigned on paying $500 billion in reparations, and candidates were asked about their stance on the issue during the debates. 
  •  In recent years some institutions that owned slaves, or participated in slavery, have begun reparations programs. In 2005, JP Morgan Chase acknowledged that two predecessor banks—Citizen's Bank of Louisiana and New Orleans Canal & Banking Company—accepted more than 13,000 enslaved persons as collateral and once held around 1,250 enslaved persons when borrowers defaulted. Chase started a scholarship program for Black students in Louisiana as a form of reparations. 
  • Georgetown University, which once owned and sold 272 slaves, has decided to pay reparations by offering scholarships to descendants of the people the school once enslaved and sold. 
  •  Other entities—such as the city of Asheville, N.C., and the University of Virginia—have apologized and taken responsibility for their role in enslavement.  

On the other hand, the United States government has not attempted reparations since the Lincoln administration. A bill to study Reparations called HR 40 has been introduced, but never voted on, in the US House of Representatives since 1989. 

The Case for Reparations

Examining the role of slavery in building the economic predominance of the United States—north and south—the role of the federal government in establishing the laws that allowed it and other large institutions to profit from the labor of enslaved people, and the lingering effects of both slavery and post-slavery structural racism on the descendants of slaves establishes a strong argument for reparations.

Color map, entitled 'Map No 8, Status of Slavery in the United States, 1775 - 1865,' illustrates the territorial application of various slavery related laws, published in 1898. Among the laws cited are the Missouri Compromise, the Dred Scott Decision, the Kansas Nebraska Act, and the Emancipation Proclamation.
Color map, entitled 'Map No 8, Status of Slavery in the United States, 1775 - 1865,' illustrates the territorial application of various slavery related laws, published in 1898. Among the laws cited are the Missouri Compromise, the Dred Scott Decision, the Kansas Nebraska Act, and the Emancipation Proclamation. Interim Archives / Getty Images

Slavery built the U.S. at the expense of enslaved Black people

The Federal government and other large domestic institutions were participants and stakeholders in the practice of enslavement. The savings produced by using enslaved workers spurred economic growth for the country as a whole—and slave owners, particularly—while impoverishing generations of Blacks by depriving them of fundamental rights, freedom, and compensation.

It was near the turn of the century in 1793, when Massachusetts-born Eli Whitney invented the cotton engine, a machine that automated the painstaking task of removing the seeds from raw cotton by hand. Nicknamed the cotton gin, the invention revolutionized American cotton production. In short order, the U.S. became the leading cotton producer in the world.

The cotton boom created a demand for labor to work on cotton farms, which cotton growers met by purchasing slaves. According to census records, the number of slaves in America went from 894,452 in 1800 to 3,953,587 in 1860.  During that same period, the United States per capita GDP more than doubled going from $58 ($1540 in 2019 dollars) in 1800 to $125 ($3243) in 1860.

During the slavery era in the United States, enslaved Black workers made up nearly half the workforce in the Southern states.  Unlike the White labor pool, these workers received no wages or profit-sharing, and lived and worked in bondage. The US cotton industry, which depended on enslaved plantation labor in the deep South, accounted for at least 5% of US GDP.  All slave-related productivity accounted for as much as 50% of the GDP, according to author and historian, E.E. Baptist.

Enslaved people worked in many different jobs ranging from manual labor to highly-skilled trades. The most common job for enslaved people was as farmhands or domestic workers. Enslaved blacks also worked blue-collar jobs like construction and coal mining. There were also thousands who worked in skilled trades such as cooks, carpenters, shipbuilders, blacksmiths, and masons.

Slavery was a wealth transfer from enslaved Black laborers to America’s antebellum ownership and managerial class. For example, Natchez, Miss., the cotton-growing capital of the 19th century, had more millionaires than any other city in the world. Today Natchez' Black population, who are mostly descended from those enslaved workers, still disproportionately live in poverty. 

Enslaved Black laborers also built much of the infrastructure of the United States, including much of New York City, the White House, and the Capitol; they also quarried the sandstone used to build the Smithsonian. 

These unpaid wages erased the labor costs of businesses that used slave labor and increased profit margins. Abraham Lincoln opposed slavery in part because he believed it was wage theft.

The Federal government benefited directly from slavery

The government played a direct role in maintaining slavery and also reaped immediate benefits. Under the Fugitive Slave Acts of 1793 and 1850, U.S. Marshals were mandated to recover slaves who escaped and return them to enslavement. to enslavement. 

The right to collect taxes on the importation of enslaved persons was written into the U.S. Constitution.

When the U.S. Constitution was signed into law in 1787 it included language that permitted the government to collect taxes on people trafficked to America via the transatlantic slave trade, permitting a tax of “not exceeding ten dollars for each person” on “importation of such persons” in Article I, Section 9. From 1798 to 1802 and 1813 to 1816, the United States Treasury collected taxes on slaves as one of its chief sources of revenue, along with taxes on land and houses. Many slave states collected as much as 2% of the valuation of each enslaved person per year as a tax.

History has understated how much the United States government used slavery to generate revenue during the antebellum period. As a starting point for reparations, it seems logical to believe that the revenue generated from taxes on slaves could be returned to descendants of enslaved people.  

Corporations and academic institutions profited from slavery

A number of multinational corporations owned slaves in their early history. In addition to J.P. Morgan Chase, the companies that became Bank of America, Lehman Brothers Holdings Inc., Aetna Inc, New York Life Insurance Co., and Lloyds TSB Group participated in slavery. Cotton commodities and plantation shares and bonds—sometimes underwritten with deeds to enslaved people—were traded on the New York Stock Exchange in the antebellum era.

Some of America’s oldest colleges and universities, including Harvard, Yale, Brown, the University of Virginia, Columbia, and Princeton, were built by slaves and partially funded by the slave trade.

As noted above, Georgetown University recently began offering scholarships to the descendants of people it enslaved, and the University of Virginia is building a memorial to the enslaved people who lived and worked on its campus. Other institutions have yet to try to make amends for their role in slavery.

Slavery led directly to modern inequality

Despite their two centuries of contributions, hundreds of thousands of African Americans were left destitute after they were emancipated. After 1865, many free Blacks faced starvation and homelessness, and were forced to go back and work as sharecroppers on plantations for subsistence wages.

The gap in wealth between the free Whites and the newly emancipated Blacks became generational through laws that mandated segregation, disenfranchisement, and economic oppression for the next 100 years. This crystalized a stubborn racial wealth gap that still exists today.

Instead of attempting to close the gap between Blacks and Whites created by enslavement, racist laws began to be passed almost immediately after slavery to limit Blacks’ access to benefits such as education and trades that would have helped close the gap. This effort culminated in 1892 with the Supreme Court case Plessy vs. Ferguson, which legalized segregation, establishing the notorious doctrine of "separate but equal." 

For the next 70 years, Black Americans would be denied access to jobs, schools, and labor unions. When President Roosevelt passed the New Deal programs in the 1930s, the laws were written to make it difficult for Blacks to access Social Security. The GI Bill signed in 1944, also was structured in a way that shut out many black veterans. The Federal Housing Administration, a government agency created to promote homeownership, often refused to underwrite mortgage for blacks in practice known as redlining. 

Even after the Civil Rights Act became law in 1964, attempts to disadvantage blacks continued. In 1971, President Nixon launched the war on drugs, which began an era of mass incarceration that disproportionately jailed blacks. In a 1994 interview reported in 2016, Nixon’s domestic policy chief John Ehrlichman stated the program was designed to criminalize Blacks. 

In concert, more than 100 years of discriminatory policies after Emancipation worked effectively to prevent blacks from fully closing the racial income and wealth that originated with slavery. The numbers say it all: At the end of slavery in 1863, Black people owned roughly one half of one percent of national wealth. Today, that ownership is less than two percent of national wealth.

13.4%

Percentage of U.S. population that is "Black or African American alone," according to the U.S. Census.

What Reparations Could Look Like

Slavery reparations are often proposed as a cash payout to the descendants of enslaved people. A few universities and corporations that owned slaves have begun giving scholarships to the descendants of the people they enslaved. Other than cash payments to Black Americans, proposals have included an extensive federal government economic development program that benefits the Black community. And some proponents have called for a reparation program of payments to Black Americans directly from White Americans, but these proposals are outliers.

The exact amount of slavery reparations would need to be calculated as part of a government study on reparation by a Federal commission, such as the one proposed by the reparations bill HR 40. Estimated costs for the program fall somewhere around $16 trillion, the entire current-day book value of the four generations of slaves who lived in the United States after the country’s independence in 1776 until the Emancipation Proclamation in 1865. Another way of determining the amount would be to determine the amount of lost wages, which would yield a similar figure. 

Previous reparations programs

A reparation program for Black Americans would not be unprecedented; the United States has paid Reparations in other instances.

  • In 1946, an Indian Claims Commission was established , which awarded $848 million to 176 different Native American tribes and groups over its 31 years of existence. for lands that had been taken. In 1994 a Court of Claims settled the remaining 10 cases for $400 to $500 million, for a total of $1.3 billion.  
  • The money was given to individual groups and tribes to distribute. It equated to about $1000 ($10,000 in 2020 dollars) per person.
  • In 1988, the United States paid reparations to Japanese-Americans who were interned during World War II. Reparations came in the form of a $20,000 check to people who were imprisoned in the camps. 

In addition to the U.S., the state of Florida paid restitution to those who survived the Rosewood massacre in 1923, when white mobs burned the Black community of Rosewood and murdered at least six people.  It took until 1994 for a law to be passed approving these payments, which gave the nine survivors $150,000 each and provided $500,000 to descendants, as well as establishing a scholarship fund for descendants. 

Funding slavery reparations

How would a slavery reparations program be funded? Deficit spending is the most feasible approach. The taxes needed to support such an expensive program would be onerous. And there is precedent for it: In 1833, the United Kingdom passed the Slavery Abolition Act across much of the British Empire. It paid to liberate its enslaved population by compensating slave owners to the tune of £20 million through deficit spending (£2,4 billion/$3.11 billion today).

To put the cost of slavery reparations in context: The program would be less pricey than the proposed outlays for proposals for Medicare for All at $20.5 trillion and the Green New Deal at an estimated $50 trillion to $90 trillion. 

Where the Campaign for Reparations Stands Now

The most recent version of HR 40, the bill that would set up a federal commission to study slavery reparations, has been endorsed by Democratic presidential nominee Joe Biden and Speaker Nancy Pelosi, and has 157 co-sponsors in the House. All the same, it has not made it out of committee in the 31 years since it was first introduced. 

H.R. 40, the bill to set up a federal commission to study slavery reparations, now has 157 co-sponsors and the support of Speaker Pelosi and Democratic presidential candidate Joe Biden.

High cost isn't the only obstacle to slavery reparations. Low support for slavery reparations among White Americans and questions about logistics are also obstacles to moving forward.

Low support for reparations

While a growing number of Americans are aware of racial disparity in the U.S., according to a 2020 Reuters poll, only 1 in 10 White respondents support paying reparations and half of Black respondents support it.

Opposition to slavery reparations may stem from decades of racial stereotypes used to justify a lack of racial economic equality. A 2018 poll by The Economist/YouGov indicated that as many as 40% of White Americans believe that Black Americans' lack of economic equality is because they aren’t trying hard enough.

Some Americans have expressed opposition to paying out reparations since the people who were enslaved are dead. Alternately, a belief also exists that the casualties of the Civil War did constitute reparations.

These beliefs ignore the debilitating effect of more than two centuries of enslavement on Black Americans. They also do not weigh that—instead of making the efforts to remedy the damage caused by slavery—the government moved to make those injuries permanent by creating a racial caste system through legal segregation and discrimination.

Attitudes about slavery reparations also vary by age. A 2016 Exclusive Point Taken-Marist Poll, done in conjunction with the PBS debate series “Point Taken,” showed that 80% of Americans over 69 opposed reparations, while a narrow majority of millennials (51%) either supported the idea (40%) or was unsure (11%).

There is also a partisan divide on the issue. According to a poll from Huffington Post/YouGov in April 2019, 55% percent of Democrats supported a Federal study of slavery reparations, while only 14% of Republicans and 22% of independents support a commission on the issue. On the question of support for cash payments, the numbers are 34%, 13%, and 12%, for Democrats, Republicans, and independents, respectively.

Deciding who would be eligible

Another obstacle would be establishing who would be eligible. While it could be labor-intensive to determine which Americans are the descendants of enslaved people, it is possible. Around 85% of Black Americans fall in this category. The remaining Black Americans are the descendants of immigrants, mostly from Africa and the Caribbean, and could be determined as such via immigration and vital records.

Going Forward

While many Americans continue to view reparations as unnecessary, attitudes are shifting, as a greater focus is being put on a legacy of slavery and racial discrimination in America. Institutions coming clean about how they owned enslaved people or otherwise profited from the trade of enslaved labor is bringing into ever greater focus the unacknowledged role that enslaved people played in building the United States.

Political support for reparations is also on the rise. The fact that H.R. 40, the bill to create a commission to study slavery reparations, now has 157 co-sponsors and has been endorsed by Democratic presidential nominee Joe Biden and Speaker Nancy Pelosi might move it forward. 

President Donald Trump said in June 2020, "I don't see [reparations] happening." However, he recently released the "Platinum Plan for Black America" that mirrors some language from entertainer Ice Cube's reparations plan, "A Contract with Black America."  While scant on details, Trump's plan calls for up to $40 billion in funding for Black-owned federal contractors.

 In 2020, California became the first state to commission a study of paying slavery reparations. California Assembly Bill 3121, passed in February, requires "Regents of the University of California to assemble a [9-member] colloquium of scholars to draft a research proposal to analyze the economic benefits of slavery that accrued to owners and the businesses...and to make recommendations to the Legislature regarding those findings." It details what the task force should study, including forms of compensation and who would qualify for them. It also states: "Any state-level reparation actions that are undertaken as a result of this chapter are not a replacement for any reparations enacted at the federal level, and shall not be interpreted as such."

Reparations would go a long way towards helping African Americans recover from the wounds of slavery, Jim Crow, and discrimination. Recently, a majority of Americans (50%) expressed support for a congressional commission to study the institution of slavery and its legacy of persistent systemic discrimination against living African Americans, as set forth in Bill H.R. 40.  With attitudes evolving on the issue and reckoning with America's racial coming into focus, the case for slavery reparations may be moving into the light at last.