The Economic Legacy of Racism in Oregon

By Nathan Sosa, WashCo Dems Communications Team

American history rests on the image of an intrepid pioneer heading west to seek his fortune on the frontier. Oregon in particular has played a prominent role in this mythology. Its climate, thick forests, and rich soil drew thousands of settlers in covered wagons. Its coastline and rivers lured merchants from all over the world who turned it into a gateway for the wealth of the Pacific. For nearly two centuries, Oregon has glistened as the promised land for millions of people who’ve journeyed here in the hope of building a better life.

Unfortunately, the promise has often been illusory for people of color who’ve found few opportunities in the midst of such splendor.

In 1850, the U.S. Congress passed the Oregon Donation Land Act which offered free, 320-acre parcels to adult male citizens who were white. Native Americans, who were not considered citizens, did not qualify for ownership. (1) Over the next five years alone, 2.8 million acres of land were conveyed to such settlers who forcibly removed the native inhabitants. (2) In the end, as a result of the Donation Land Act and the subsequent Homestead Act, over 10.5 million acres were thus expropriated. (3) At the same time, the government forced the natives onto ever-smaller reservations located on less desirable land.

In 1858, Oregon became a state and its constitution explicitly concentrated wealth in the hands of whites. One provision stated:

No free Negro, or Mulatto, not residing in this state at the time of the adoption of this constitution, shall come, reside, or be within this state, or hold any real estate, or make any contracts, or maintain any suit therein; an the Legislative Assembly shall provide by penal laws, for the removal, by public officers, of all such Negroes, and Mulattos, and for their effectual exclusion from the state, and for the punishment of persons who shall bring them into the state, or employ, or harbor them. (4)

Another section stated, “No Chinaman, not a resident of the state at the adoption of this constitution, shall ever hold any real estate, or mining claim, or work any mining claim therein.” (5) In 1923, the Alien Land Law prohibited Japanese American immigrants from owning or leasing land and denied them business licenses. (6) Thus, for the first 75 years of its status as a territory and then a state, Oregon’s richest lands and business opportunities were expressly kept out of the hands of minorities.

Beginning in the 1920s, as more people moved to the cities, Oregon used racially restrictive covenants and single-family zoning to create segregated neighborhoods. Once confined to these areas, minorities were often denied credit based on the demographic composition of their neighborhood. As a result, households of color were prevented from gaining home equity or improving their properties. (7)

During the 1930s, New Deal reforms sought to uplift people who were still suffering from the Great Depression. The Fair Labor Standards Act of 1938 (FLSA) mandated a 40-hour work week, banned child labor, and established a federal minimum wage and overtime requirements. Yet, it exempted many agricultural, domestic, and service workers who were overwhelmingly minorities. (8) Moreover, the National Labor Relations Act of 1935 strengthened organized labor’s campaign for higher wages, better benefits, and safer working conditions, but the law also excluded agricultural as well as domestic employees and did not ban discrimination within unions. (9) Thus, many of the groundbreaking reforms which catapulted low income whites into the middle class did not apply to workers of color.

In 1944, the Servicemen’s Readjustment Act, commonly known as the “G.I. Bill,” was passed to provide college tuition, low-cost home loans, and unemployment insurance to veterans returning from World War II. Yet, the benefits were denied to Black veterans in a variety of ways. First, many colleges banned Black applicants and the promise of free tuition was thus illusory. Second, the low-interest loans promised to servicemen still had to be obtained from private banks that were free to discriminate based on race. Third, redlining often kept minorities from moving outside of segregated neighborhoods while financial institutions refused to provide mortgages or insurance in these areas. Finally, Southern postmasters were accused of refusing to deliver the forms for unemployment benefits to Black applicants. (10)

As a result, the governmental program which laid the groundwork for decades of postwar prosperity was withheld from African Americans.

It wasn’t until the middle of the twentieth century that things began to change. In the late 1950s, Oregon finally ratified the 15th Amendment to the U.S. Constitution which provided that no government may prevent a citizen from voting based on that citizen’s “race, color, or previous condition of servitude.” It also passed the Oregon Fair Housing Act which made it illegal for property owners or their agents receiving any public funding to discriminate “solely because of race, color, religion, or national origin.” (11) The following decade, the U.S. government passed the Civil Rights Act of 1964 as well as the Voting Rights Act of 1965 to end racial segregation and guarantee voting rights for minorities. While these measures helped to expand opportunities for people of color, they did little to uproot the socio-economic system that racist policies had produced.

In the years since, efforts have been made to integrate public schools, encourage minorities to obtain higher education, and promote ethic as well as cultural diversity. Nonetheless, the economic legacy of racism persists. Consider the following facts specific to Oregon:

Median Household Income by Ethnicity / Race (12)

• White – $59,521
• Asian – $72,282 (13)
• Black – $35,723
• Hispanic – $46,180
• Native American – $38,436

Poverty Rate (14)

• White – 12%
• Asian – 13%
• Black – 28%
• Hispanic – 23%
• Native American – 23%

Homeownership Rate (15)

• White – 65.08%
• Asian – 59.39%
• Black – 32.19%
• Hispanic – 40.82%
• Native American – 44.78%

These statistics reflect the cumulative effect of decades of economic marginalization.

There are those who may wonder why minorities have not been able to close the gap since legal discrimination has been banned for decades. The reasons for this are multi-faceted, but there are two things that stand out. First, in many cases, inter-generational wealth within the white population has been collectively passed down with its attendant economic, educational, and psychological advantages while the burdens of multi-generational poverty have had the opposite impact on many communities of color. Second, the prohibition of legal discrimination did not dispel implicit biases which remain potent today. Job applicants with equal qualifications whose names sound Black are 50% less likely to be called for a job interview than those whose names sound white. (16) Renters who are Black or Hispanic are often charged higher deposits, fees, and rents as compared to similarly-situated leasees who are white. (17) There is also the well-documented problem of mass incarceration which disproportionately impacts minority communities.

Oregon still shines as a land of hope for the hundreds of thousands of people who have set off in recent years on their modern-day version of the Oregon Trail.

For our state to fulfill its true promise, however, there remains more work to be done to end the economic legacy of racism. This centuries-old problem can only be overcome if we confront it honestly as well as openly and work together as a society to find long-lasting solutions.

Footnotes:

(1) — Margaret Riddle, Donation Land Claim Act, spur to American settlement of Oregon territory, takes effect on September 27, 1850, HistoryLink.org (August 09, 2010) https://www.historylink.org/File/9501

(2) — Eric Cain and John Rosman, Broken Treaties: An Oral History Tracing Oregon’s Native Population, Oregon Public Broadcasting (March 20, 2017) https://www.opb.org/artsandlife/series/brokentreaties/oregon-tribes-oral-history-broken-treaties/

(3) — U.S. Bureau of Land Management, Shaping America’s History, The Homestead Act, Commemorating 150 Years (1862-2012) https://www.blm.gov/or/landsrealty/homestead150/files/HomesteadingFactSheet_2012.pdf

(4) — Oregon State Archives, Transcribed 1857 Oregon Constitution, https://sos.oregon.gov/archives/exhibits/constitution/Documents/transcribed-1857-oregon-constitution.pdf

(5) — Id.

(6) — Oregon Secretary of State, Oregon History:  Chronology — 1902 to 1950, Oregon Blue Book https://sos.oregon.gov/blue-book/Pages/facts/history/chronology-1902-1950.aspx

(7) — Oregon Legislative Policy and Research Office, Report on Addressing Barriers to Home Ownership for People of Color in Oregon (December 2019) https://www.oregonlegislature.gov/committees/2019I1-JARDHO/Reports/JARDHO%20Final%20Report%20December%202019.pdf#%5B%7B%22num%22%3A156%2C%22gen%22%3A0%7D%2C%7B%22name%22%3A%22XYZ%22%7D%2C70%2C742%2C0%5D

(8) — Danyelle Solomon, Connor Maxwell, and Abril Castro, Systematic Inequality and Economic Opportunity, Center for American Progress (August 07, 2019) https://www.americanprogress.org/issues/race/reports/2019/08/07/472910/systematic-inequality-economic-opportunity

(9) — Id.

(10) — Erin Blakemore, How the GI Bill’s Promise Was Denied to a Million Black WWII Veterans, The sweeping bill promised prosperity to veterans.  So why didn’t Black Americans benefit?, History.com, (September 30, 2019) https://www.history.com/news/gi-bill-black-wwii-veterans-benefits

(11) — Looking Back In Order to Move Forward, An Often Untold History Affecting Oregon’s Past, Present and Future, Timeline of Oregon and U.S. Racial, Immigration and Education History, https://www.portlandoregon.gov/civic/article/516558

(12) — Janet Bauer, Despite overall economic gains, communities of color in Oregon lag economically, Oregon Center for Public Policy (September 14, 2017)  https://www.ocpp.org/2017/09/14/20170914-nr-poverty-median-income-race/

(13) — There are significant economic disparities between the dozens of groups classified collectively as “Asian.”  See A Community of Contrasts: Asian Americans, Native Hawaiians and Pacific Islanders in the West, Asian Americans Advancing Justice (2015) https://advancingjustice-aajc.org/sites/default/files/2016-09/AAAJ_Western_Dem_2015.pdf

(14) — Audrey Mechling, A Portrait of Poverty in Oregon, Oregon Center for Public Policy (August 7, 2020) https://www.ocpp.org/2020/08/07/poverty-oregon/

(15) — Oregon Legislative Task Force Addressing Racial Disparities in Homeownership, Homeownership Data Analysis for August 14, 2019 meeting, https://olis.leg.state.or.us/liz/201911/Downloads/CommitteeMeetingDocument/206352

(16) — Marianne Bertrand and Sendhil Mullainathan, Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination, The American Economic Review (September 2004) https://cos.gatech.edu/facultyres/Diversity_Studies/Bertrand_LakishaJamal.pdf

(17) — Nikole Hannah-Jones, Portland housing audit finds discrimination in 64 percent of tests; city has yet to act against landlords, The Oregonian (May 10, 2011) https://www.oregonlive.com/portland/2011/05/a_portland_housing_audit_finds.html