Feb 4, 2021
Government Created Segregation
The US government codified overt segregation in housing policy at the beginning of the 20th century. The New Deal created the Federal Housing Administration, which required all new public or government-backed housing developments to be segregated. Zoning laws and plans around the country segregrated urban areas that were already integrated, and relegated African-Americans to less desirable areas. The government sought to solve the housing crisis after WWII by underwriting the development of suburbs for whites only. It also mandated racial covenants against African-Americans to secure housing loans and created red-lining and income-based discrimination to segregate urban areas.
Unequal Access
African Americans were excluded from government programs designed to create homeownership by being denied access to purchase a suburban home and to qualify for a mortgage. The Home Owners Loan Corporation provided government-backed, low-interest loans to whites who wanted to buy a house but refused to insure African Americans' loans. After World War II, the VA provided subsidized huge housing developments for white returning soldiers by allowing them to buy homes on mortgage without a down payment. Finally, real estate developers would not receive government-secured loans from banks to build suburban neighborhoods if they sold homes to African-Americans. These economic policies created and then entrenched housing segregation.
Segregated Labor
Organized labor flourished during and after the New Deal, but only whites felt the benefits. Unions were allowed to segregate their workforces, and some unions – like the construction workers’ union – excluded Blacks outright. Blacks were routinely denied jobs held for whites and were never promoted if it meant overseeing whites. African American workers were forced to pay full union dues but only received partial fringe benefits, and the benefits of collective bargaining sometimes only applied to white workers. Being forced into lower-paying jobs exacerbated the income and wealth disparities between Blacks and whites.
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Richard Rothstein is a Distinguished Fellow of the Economic Policy Institute and a Senior Fellow (emeritus) at the Thurgood Marshall Institute of the NAACP Legal Defense Fund. He is the author of The Color of Law: A Forgotten History of How Our Government Segregated America, which recovers a forgotten history of how federal, state, and local policy explicitly segregated metropolitan areas nationwide, creating racially homogenous neighborhoods in patterns that violate the Constitution and require remediation. He is also the author of many other articles and books on race and education, which can be found on his at the Economic Policy Institute. Previous influential books include Class and Schools: Using Social, Economic and Educational Reform to Close the Black–White Achievement Gap and Grading Education: Getting Accountability Right.
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