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[inspiring music] From NJ PBS, this is "NJ Spotlight News with Briana Vannozzi."

- Good evening and welcome to a special edition of "NJ Spotlight News."

I'm Rhonda Schaffler in for Brianna Vannozzi.

Tonight, an NJ Business Beat special, New Jersey's racial wealth divide.

A deep dive into the economic inequity that exists in New Jersey's African American community.

It is a well-documented fact that an extraordinary wealth gap exists between Black and white residents of our state.

And mind you, New Jersey is one of the country's most prosperous states.

How did this happen?

What is the day-to-day impact of this disparity in the Black community?

And what are the challenges they face to try and build wealth and economic equity?

To help me break it all down, with me tonight is Shané Harris, Vice President of Social Responsibility and Partnerships at Prudential Foundation, Ryan Haygood, the President and CEO of New Jersey's Institute for Social Justice, and David Troutt, a distinguished professor of law and John Jay Francis Scholar at Rutgers Law School.

Many of you saw a graphic that we put out showing the wealth gap in New Jersey.

The median net worth of Black families in New Jersey below $18,000 compared to whites who have equity of $322,000.

Ryan, I wanna start with you 'cause you've done some research on this.

How did we get to the point where we see such a level of extreme disparity?

- New Jersey is each year one of the wealthiest states in the country.

I think this year, second to Maryland.

And I think in in a real way, New Jersey is a modern day version of Dr. King's "Two Americas."

You know, he talked many years ago about empowering one America.

Young people grew up in the sunlight of opportunity, but in the other America, young people parish on a lonely island separated from prosperity.

And I think in a material way, New Jersey is a modern day version of that "Two Americas."

And so the number you lift up, Rhonda, the racial wealth gap, disparity was really created by design at our founding as a colony.

New Jersey gave each English white settling family 150 acres of land and it gave those same families an additional 150 acres of land for each enslaved person who worked on the land.

And so that's sort of where our racial wealth gap was conceived of.

It was created in our formation as a colony.

Now, people might ask, "Well, why, Ryan, are you going all the way back to slavery in New Jersey?"

I think many folks don't appreciate that it happened here, but why go back several hundred years to explain this current day racial wealth gap?

And the answer is that there's a direct line from slavery up through a series of practices and policies to include predatory lending practices, restrictive covenants, redlining, subprime lending practices to today's racial wealth gap.

And so one of the realities I think, back to the theme, is that we all continue to live in the shadow of, with the vestiges of our formation as a colony where slavery took root very, very deeply.

- Thank you so much.

David, let me have you kind of pick up the conversation from there.

We should point out that the racial wealth gap is actually getting worse.

So we started with slavery.

Let's fast forward.

We have mention of Dr. King.

Let's think about the '60s, let's think about the "Civil Rights Act."

Why have we not seen more progress?

What can you add to what Ryan has shared?

- Wealth creation doesn't occur overnight.

It's not one of those instantaneous creations.

It is a cumulative process, right?

So any financial advisor will tell you that you're in it for the long haul and you're expecting some interaction of economic institutions to work in your benefit and for you not to be loaded down by debt or suppressed in other ways that deny you opportunities or roles.

So what happens in the early period from slavery through reconstruction are two themes that continue, that is suppression of economic opportunity for Blacks as well as repression of economic initiative by Blacks.

So in the Black codes, in peonage, in sharecropping, what is constantly occurring is the denial of Black bargaining leverage, right?

So that Black labor means less, Black preferences mean less, Black agency means less, and it's always threatening.

So, to the extent that Blacks succeed, it has to be repressed.

So there's suppression and repression, there's denial and punishment, and we see this theme work its way through a variety of economic institutions to which Blacks have no choice but to participate usually in a subordinated role.

This continues into the post-war period, it continues after "World War I" and after "World War II."

So in the modern era when we have a large national government that is really hard at work to create opportunities, especially wealth for white Americans, it is once again actively suppressing Black agencies, suppressing Black opportunity, and is threatened by Black progress and therefore has to repress and punish Blacks attempts to overcome.

So what we see in those years, in the '50s and the '60s as you were mentioning, are wholesale government programs, public and private programs that either benefit whites to the exclusion of Blacks, like the GI bill, or the various structures of residential segregation, like redlining and the continued use of restrictive covenants.

But also, issues that we don't often talk about, but have had cumulative effect, and that is urban renewal and highway construction.

So where Blacks were able through "The Great Migration" to begin to create an economic beachhead in northern cities, they were wiped out, you know, hundreds of thousands of families, you know, thousands of businesses, all this wealth that was beginning to take root in northern cities as a result of escape, economic fugitives from the south is then wiped out wholesale through these public-private partnerships in the name of rational planning, in the name of downtown development, in the name of attracting whites back from these new opportunities they were enjoying to create wealth in the suburbs back to the city, which we know of course was a failing effort.

So this is the groundwork that then takes us past the civil rights era and brings us into a more contemporary era where we see continued wholesale suppression of Black aspirations economically through garden variety discrimination in labor force, garden variety discrimination in mortgage lending, the continued effects of redlining, whether it's official or not because after all, these were institutions that were meant to have staying power, and the continuation of segregated communities, commercially and residentially.

So we are trying to dig our way out of this now, but it really has to be understood as a continuum, a project in which suppression and repression of Black economic aspirations is a continuous theme and it's baked into our institutions.

And until we really are ready to root that out, we're gonna keep seeing reenactments of it in different iterations year after year.

- I appreciate those comments and I'd like to turn to Shané to continue this theme.

And let's go right now to today, to what we're seeing in corporate America and what were the policies that have us in a situation where I can count on one hand how many Black CEOs there are in Fortune 500 companies.

We know that there is issues in corporate America in terms of advancement opportunities.

We know diversity, equity, and inclusion's a big item now, but what, Shané, were the corporate policies that really established a matter of course in business where Black workers were not getting the same opportunities even if they were as qualified as anybody else they were working with?

- Many people in New Jersey know that Prudential, and particularly the corporate social responsibility work, was really established in reaction to the civil unrest in the late '60s, which was a manifestation of and a reaction to these systemic challenges in the sense of inequity.

And Prudential as a company decided to remain in Newark and through our corporate social responsibility work has been committed to driving inclusion, particularly inclusive economic growth, through our philanthropic programs, through the impact investments that we're making in community.

But what's also true is Prudential is a legacy company that was established shortly after reconstruction, and in many ways, as a financial services legacy institution, actively participated in exclusionary practices that strip wealth from Black people and other minorities.

In the late 1880s, if you, you know, look back at our history, our Chief Underwriting Officer at the company at the time, Frederick Hoffman, has been known as the person who has innovated and innovated race-based underwriting that created a justification why Black Americans should be excluded from being able to have access to insurance products.

So, you know, that is also part of our narrative and what we have done at Prudential is to make sure that we continue to have a transparent conversation acknowledging that both of those things can be true.

We can be a company that is committed to inclusive economic growth and really over the last 40 years have a very solid track record in investing in strategies that help reduce the racial wealth gap and help Black Americans build wealth.

And we can also acknowledge the legacy that we've had as a company and many financial services, institutions in driving exclusionary practices.

- Very interesting to hear the history at Prudential and really the acknowledgement of the need to right some wrongs, so I appreciate all of that.

Ryan, I wanna turn back to you and talk a little bit more about the current state of disparity.

We heard from someone who looked at our numbers on the median net worth gap and that person said, "Well, that sounds like a comparison of wealthy individuals."

And you talked about how wealthy some parts of New Jersey are.

And this person asked, "Well, what about working class people?

Is the disparity less?"

Is that something that should be looked at or are there nuances that really don't justify that sort of comparison?

- There's incredible, incredible wealth here in New Jersey.

So part of the challenge for us is not that there's a lack of resources, it just is what we dedicate investing those resources in.

And so I think, you know, we've said a lot about the numbers and I think that there's a feeling that these numbers are intractable, the challenges are too substantial to surmount, but the good news is that we've created this reality by design and so we have the opportunity before us to redesign a system that connects Black people to all the things we have been separated from.

To include wealth, to include access to healthcare, to include access to justice, to include access to the prosperity of our state.

And that really is part of what we do collectively.

This is David's work, this is Shané's work, this is our work at the institute, thinking about how we build a system of practices, of policies, of laws, of investments that begin to connect our communities to things we've been separated from through intentional practices and policies.

- Why is it that when we look at the economy, when we look at education, when we look at opportunities, we're still seeing those gaps?

And if we aren't seeing progress in very good economic times, when will we see it?

- We see what we see primarily because of the persistence of segregated residential landscapes and segregated pipelines to mobility outcomes.

I mean, it really comes down to that.

So New Jersey is really one of those states Ryan was just talking about, the design.

The design of New Jersey is to grow wealth through local sovereignty, right?

That's why the words metropolitan and equity are in the name of my center, right?

Because we recognize that there are have and have-not municipalities in New Jersey that compete with each other for tax base.

And this has been true.

This is sort of the the colorblind way to do segregation that we've been engaged in in this state since even before the Mount Laurel lawsuit was first brought in 1971.

And after it was brought and the Supreme Court decided that every municipality in the state of New Jersey needed to provide its fair share of affordable housing, right?

It was trying to declare the necessity of spreading the wealth, spreading the wealth because the importance of housing opportunity was not just critical to family and household wealth for its immediate residents and for the future, but it was also directly connected to educational opportunity.

And all of us know this who are homeowners, right?

We've all considered the rateables of the particular town where we might wanna live, but also the quality of the education.

And there's always a correlation, right?

And unfortunately, even though that case was decided in 1975 and again in 1983, and again, you know, in 1985, we go to the legislature and create the "New Jersey Fair Housing Act," which is supposed to codify this fair share idea of really economically integrated communities in which wealth can be shared, including all the amenities and resources that come with wealth, like excellent schools and the pipeline, the opportunity that they create.

We really haven't done it.

- But I wanna go back to Shané for a minute.

The idea of access to capital, and let's just try to solve a problem one step at a time.

There has been, and you talked about it a little bit before, issues with underwriting.

There have been efforts now to increase capital access for Black-owned businesses.

I know Prudential has identified Black women owned businesses and decided to make investments.

What are you looking for when you look at potential entrepreneurs or businesses who really should be getting capital and have the potential to grow their businesses and change their communities?

- We do really see small businesses as the backbone of the local economy.

And not only is it a driver of the local economy, but it's also a job creator, right?

Particularly for local residents.

So in many ways, you know, the work that we do is around enabling partner organizations to really support, cultivate, and nurture small businesses or minority entrepreneurs.

Since 1974, we have provided roughly $13 million in grant capital.

So that money that provides technical assistance in cash giving to support small businesses and an additional $132 million in small business capital through community development finance institutions, CDFIs, to really support the ecosystem for small businesses.

And, you know, that work has really focused on some of the traditional things that are necessary to support small businesses and to allow them to thrive; access to capital, technical assistance, access to networks, but it's also extended beyond, you know, the general support of small businesses to really looking at how do we help improve the financial wellness of business owners and their employees.

And we've also invested in practices that allow small business owners to build equity and wealth, things that are looking at innovative practices like employee ownership models, right?

That help employees have the opportunity to take over a small business so that that doesn't end if the small business owner retires and the company folds or dissolves with the retirement of that small business owner.

So there are a number of drivers that need to be in the ecosystem to really support small business owners, particularly minority owned businesses and women owned businesses that, as we know, all the data shows, you know, have a harder time in having access to capital, have a harder time sustaining their businesses.

- Thank you.

I wanna switch topics for a moment and talk about reparations because this is a conversation that is had from time to time and that can take many forms and ideas.

Ryan, your thoughts on reparations.

Is it a conversation that should move beyond just talking about and actually seeing some action?

And if so, how do you even begin that?

- Because reparations is such a big topic and because we want to do it right, we wanna have a conversation in the most robust and straightforward and inclusive way possible, we've been pushing for New Jersey to create a reparations task force that would do those two things.

Look at the beginning of slavery in New Jersey state, it's enduring role, and then make recommendations around how to repair that harm.

And it was a bill that was introduced a couple of years ago supported by almost every Black elected official in the state and some supportive non-Black elected officials.

And it's part of a campaign called "Say the Word: Reparations" campaign.

And the goal is to finally have the kind of conversation we're having now.

I think we can't expect to address the issues that Shané and David raised without having a candid conversation about why, like why this is the reality, the lived reality of Black folks in the state.

- David, I'd like your thoughts on this conversation.

I'm also thinking about smaller efforts.

Reparations is a very big issue, but I mean in thinking of the attempt, Senator Booker for instance wanted baby bonds and he made a compelling argument and there was some talk on the state level, and boy, that did not go far.

So your thoughts on, you know, the big picture view and even how to make incremental steps or maybe that's not what we should do.

Maybe it should be the biggest possible effort.

- We can look at some very specific practices, we can say of subprime lending and the devastation to newer communities that saw some of the highest rates of foreclosure in the country, you are owed.

Something happened to you, it was intentional, it was destructive, you have not recovered from it, you are also Black.

And there are policies that we can put in place to account for that.

I mean, somebody is responsible for that, not perhaps for all of it, obviously there are different reasons for foreclosure, but we know that a significant subset of those foreclosures, which has destroyed so much Black wealth, and now made those areas sort of targets for corporate buying, you know, and a diminution of Black home ownership yet again and increased rents yet again, which of course impact people's inability to save and to invest again for the sake of wealth creation.

These are things that we can address.

I agree that reparations has to be studied, but I think that in the first instance, we have all sorts of demonstrable instances where Black people's economic interests have been targeted and where both Black people and the state of New Jersey as a whole would be in much better economic shape if we address them through reparative policymaking.

- For Black Americans, that generational wealth creation is absent in many cases.

So when we start thinking about things like reparations, I mean, in your view, when will we see a situation where there's significant generational transfer of wealth within the Black community?

It certainly can't be in the near future.

- We see the real opportunity really centered around how do we help bake equity into our core business practices and our core business strategy.

And that's the opportunity that we are leaning into and saw an opportunity to lean into after, you know, the racial reckoning of 2020 and the national conversation on racial equity.

And what that means for Pru is, how do we learn how to better understand the Black American financial wellness journey so that we can make sure that we are providing access to tools and solutions that help build wealth?

I mean, Prudential essentially is in the business of wealth creation and wealth preservation for our customers and clients, yet our idea of what makes a viable customer is very narrow.

And what we are looking to do is to create a proof of concept that will allow the company really to broaden and expand their reach so that we can have practical tools, wealth building solutions in the hands of more Black Americans.

- David, are you confident that we are moving closer to eliminating systemic racism and that there are ideas and policies that will take hold?

- Oh boy.

I'd be afraid to say that on TV.

I don't know.

I mean, I know that we're working very hard and I really appreciate what both of my fellow panelists have just been talking about because I do think that they've each identified several steps that are critical in the right direction.

- You've all made such excellent points.

I wanna thank David and Ryan and Shané for your time, for your work, and your words tonight.

Thank you so much.

And that's going to do it for us tonight.

Thanks for being here for this important conversation.

I'm Rhonda Schaffler.

For all of us here at "NJ Spotlight News," have a good evening and a great night.

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