Vice President Kamala Harris watches President Joe Biden sign Executive Orders after speaking on racial justice in the State Dining Room of the White House in Washington, DC on January 26, 2021.
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Just over two weeks into office, President Joe Biden has already made it clear that he wants to close the racial wealth gap in America.
“We don’t have to make the issue of racial justice an issue just for one government ministry, but it has to be a matter for the entire government,” said Biden as he signed four relevant implementing regulations.
The gap is big. The median net worth of a white family was $ 188,200, compared with $ 24,100 for black families and $ 36,100 for Hispanic families. This is according to the Federal Reserve’s 2019 consumer finance survey published in September 2020.
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“This is an area where we are not only not making headway, but we are losing ground,” said Marc Morial, President and CEO of the National Urban League.
“The Covid recession has boosted the wealth of a more concentrated group of Americans.”
So far, Biden’s executive ordinances address fair housing, end the federal government’s use of private prisons, reaffirm U.S. commitment to sovereignty and consultation of tribunals, and combat xenophobia against Asian Americans and islanders in the Pacific.
He also made a number of campaign proposals. Here are some of his plans.
Biden’s first assignment was to add a minimum wage of $ 15 to his stimulus plan. However, it must pass Congress and was not included in the recent Senate proposal. At the same time, the Democrats reintroduced the Wage Increase Act, which gradually increases the minimum wage to $ 15 by 2025.
According to Biden’s plan, the raise would raise 31% of black and 26% of Latin American workers, according to the Economic Policy Institute, a left-wing research group.
Opponents of the wage increase note that the Congressional Budget Office had forecast the minimum wage to increase by $ 15 by 2025, which could mean an average of 1.3 million jobs will be lost in the US due to a drop in business revenues.
The Covid recession has further boosted the wealth of a more concentrated group of Americans.
President and CEO of the National Urban League
To truly increase the profitability of people of color, financial literacy should be part of the package, said Louis Barajas, chief strategy officer at MGO Private Wealth in Newport, Calif. And a member of the CNBC Financial Advisor Council.
“I meet a lot of people who are poor and don’t understand what it takes to get to the next level,” said Barajas, who grew up in East Los Angeles and has since returned as a certified financial planner to help the underserved community .
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During the campaign, Biden pledged an accelerated investment of $ 2 trillion to create jobs for building modern, sustainable infrastructure in black and brown communities. This includes not only roads and bridges, but also schools, drinking water and broadband access.
Its aim is that 40% of the total benefit goes to disadvantaged communities and that jobs are filled by diverse, local and well-trained workers.
“We now need a Rooseveltian public works plan in this country,” said Morial.
Biden also signed an executive order directing the Department of Housing and Urban Development to investigate the effects of President Donald Trump’s regulatory actions that “undermine fair housing policies and laws.”
Based on this analysis, HUD will take steps to implement the requirements of the Fair Housing Act.
As a candidate, Biden suggested creating a new refundable tax credit of up to $ 15,000 to help families buy their first home. He also pledged to increase support for federal programs to financially support and revitalize distressed neighborhoods, as well as the construction of 1.5 million houses and public housing units.
In his Covid-19 aid package, Biden is not only calling for grants for more than 1 million of the most severely affected companies, but is also looking for longer-term solutions for small-scale painters.
During the campaign, Biden called for $ 10 billion from the new Small Business Opportunity Fund for state and local venture capital programs. Based on previous government investments, he believes this can stimulate small businesses to make $ 50 billion in new equity investments.
In addition to proposing student debt relief, Biden campaigned for public colleges and universities to be tuition-free for all families with incomes less than $ 125,000. He also doesn’t want to teach at two-year community colleges.
Nearly 85% of black undergraduate recipients are in debt, compared with 69% of white undergraduate recipients, according to the Center for Responsible Lending.
Institutions that are historically black and Spanish, as well as others, will also see investment under Biden’s plan. It includes building high-tech laboratories and digital infrastructure, as well as investing in programs that increase enrollment, retention, graduation and employment rates.
For entrepreneurs, he wants to set up intensive, semester-long business development programs at every public community college in the USA. Workforce education is also part of his focus, including a $ 50 billion investment that includes business partnerships and apprenticeships between community colleges.
Color communities have long been underserved by banks. In 2019, 14% of black households and 10% of Hispanics had no bank accounts, according to the Federal Reserve.
To ensure that US banks serve everyone, Biden seeks to strengthen and expand the Community Reinvestment Act. It currently regulates banks, “but does little to ensure that fintechs and non-bank lenders provide responsible access to all members of the community,” it says on its campaign website.