As we commemorate Juneteenth, the day in 1865 when the last bastion of institutional slavery in this country was abolished, it is important that we recognize that our work to form a more perfect union is far from complete. The fact that today, more than 150 years after the end of slavery, the median wealth of white households is nearly eight times that of Black households is not because of random luck or hard work. The profound differences we continue to see in economic opportunity are the result of a failure to establish public policy grounded in the belief that all men are created equal.
This is especially true when it comes to economic policy. The Freedman’s Saving and Trust Company—or the Freedman’s Bank—was created in 1865 to offer financial services to newly freed slaves soon after Juneteenth. At its height, the bank had more than 30 branches and served more than 60,000 depositors. But like so many of the promises and institutions created to support recently freed slaves, the Freedman’s Bank ultimately failed due to speculation and mismanagement. It is just one example of the posture of separate and unequal treatment that pervaded this country for generations, including in financial services.
This is why President Biden is committed to advancing racial equity not only as a moral priority for his administration but also as a critical economic priority. Today, at the same Treasury Department that failed recently freed slaves 150 years ago, we are implementing programs that represent historic investments in America’s communities of color. For example, through the Emergency Capital Investment Program (ECIP) and other programs, we are investing nearly $12 billion in America’s community development financial institutions and minority depository institutions. These organizations have a long track record of serving communities of color and reaching those the financial sector has too often left behind, providing financing for affordable housing development and loans to small business owners in these communities.
Similarly, through the State Small Business Credit Initiative, a revival of a successful Obama Administration program, we are providing funding to states, territories, and Tribal governments to support investments in small businesses in their communities. This program includes $2.5 billion in capital and incentive funding to support investments in underserved businesses, including those owned by people of color — a billion more than the value of the entire program the first time around. Programs like this provide the resources needed for small businesses to grow, individuals to build wealth and communities to thrive.
Our hope is that these programs will lay the foundation for a generational shift in opportunity for America’s Black and Brown communities. Breaking down these barriers will not only create opportunity in communities of color — it will drive prosperity for all Americans who benefit from the increased innovation, job creation and purchasing power this shift will unleash.
However, if my time in government has taught me anything, it is that our greatest successes come when government initiatives are augmented by private sector and philanthropic actions rooted in the same goals and commitments. For example, the historic mobilization of resources to fight climate change — more than $600 billion annually, on average — has been driven by a joint public and private recognition of the urgency and opportunity presented by the move toward a green economy.
On this Juneteenth — the second time we have officially celebrated this day as a federal government — I am calling on the private sector to help us take the same approach to racial equity and economic opportunity that it is taking on climate change. Helping to unlock the unrealized potential in communities of color by equalizing their access to capital, customers, and employment and training opportunities is one of the best levers available to us to power America’s economic future. McKinsey estimates that closing the racial wealth gap could add up to $1.5 trillion to U.S. GDP over 10 years.
In the summer of 2020, in the wake of George Floyd’s murder, companies and financial institutions committed more than $200 billion to racial equity and investments in communities of color. Those commitments were heartening, and they echo the ambitions of the Freedman’s Bank more than 150 years ago. But two years after the fact, not all of these commitments have been realized and not enough have focused on the structural changes needed to fundamentally shift the ways capital flows into under-resourced communities. I applaud those companies who have taken action, but I want to call attention to the bold, transformational investments still needed by these communities and families. Our goal should be to make the investments today needed to build a different kind of economy a decade from now — one that is both stronger and more equitable.
Juneteenth is many things to many people: a celebration of the day emancipation reached the furthest corners of our country, a recognition of the rich role that the descendants of slaves have played in our country’s history and a day to reflect on the racial inequity that still persists in America today. I would like to add to that list that Juneteenth should be a catalyst for further action to support communities of color across the country. This must be a moment when the public sector and private sector come together — not just for the benefit of Black and Brown communities but as a way to drive growth and opportunity for the American economy as a whole.
Wally Adeyemo is the Deputy Secretary of the U.S. Department of the Treasury.