Who Pays for Reparations? The Immigration Challenge in the Reparations Debate

by Charles Fain Lehman

Since the 2020 “racial reckoning,” there has been increased political momentum behind reparations for slavery. Debates about reparations have moved from the halls of academia to legislatures in California and a number of cities. Americans and their leaders are increasingly asking: Are reparations justified at all? And, if so, who should get how much? This report concerns itself with a different question: Who pays for reparations? Reparations are a form of compensation for historical injustice. But many Americans did not have any ancestors present in the country at the time that injustice was committed. It is hard to argue that Americans whose ancestors arrived after 1860 should be on the hook for the costs of reparations. What fraction of nonblack Americans have ancestors who arrived after the end of the Civil War? Using demographic modeling techniques, this report pegs the figure as high as 70%, including more than half the non-Hispanic white population. These Americans are the descendants of immigrants who came to the U.S. either in the first great wave of immigration in the late nineteenth and early twentieth centuries, or in the second great wave, begun in 1965 and still ongoing today. Many of these more recent arrivals are at the top of America’s economic distribution. Indeed, the recent-arrival share of top wealth earners is likely only to grow in coming years, given the prevalence of immigrants and children of immigrants at the head of top businesses. This means that the base of people and wealth that could plausibly be taxed for reparations is shrinking and will continue to shrink for the foreseeable future. This dynamic plays out in other areas of social policy. Any transfer or subsidy proposal that is justified by historical injustice—e.g., affirmative action—will lose legitimacy as the population changes. This is an important, and often overlooked, feature not only of the reparations debate but of debates about such proposals in general. great period, beginning in 1965 and extending to the present. This second group, furthermore, is represented among the wealthiest Americans and American households, challenging the feasibility of a “soak the rich” approach to reparations. Even if we otherwise grant the arguments for reparations, this basic demographic fact—that a majority of nonblack Americans are attributable to post–Civil War immigration—throws a wrench into the reparations project. Publicly funded reparations for slavery will entail taking money from tens of millions of people who are not—even under assumptions of inherited guilt that are already wildly at odds with the American tradition—plausibly responsible for slavery. To ask the question “Who pays?” produces uncomfortable answers for those who would like to see reparations paid.

New York: Manhattan Institute, 2023. 26p.