Race, Gender, Ethnicity and Economic Damages
How Can We Avoid Reducing Economic Damages Due To One’s Race, Gender, Or Ethnicity?
What Are Reparations? Why Are They Necessary? How Are They Calculated?
There is increasing national interest in systemic racial discrimination. People have realized that in addition to current discrimination, historical discrimination continues to hurt people today as well.
In response, the U.S. Congress and governments at the state levels have begun to:
- consider the issues of bias and historical discrimination in the financial calculations in “jury awards”
- address historical and current differences in income and wealth due to race, gender, and ethnicity.
JSP&A focuses on:
- how to calculate damages when we cannot use race, gender, and ethnicity in the calculations of civil awards; and
- how to estimate the “reparations bill;” and
- how to design reparations programs.
We divide it two sections – “fair calculations” and “reparations.”
The Fair Calculations Act introduced (12/01/2016) Senate (S.3489) and the House (H.R. 4418) introduced (09/9/2019) seek to prohibit courts from using race, ethnicity, gender, religion, or actual or perceived sexual orientation in awarding damages to plaintiffs in civil actions.
On January 1, 2020, California, based on S B 41, added Section 3361 to its Civil Code. It states:
Estimations, measures, or calculations of past, present, or future damages for lost earnings or impaired earning capacity resulting from personal injury or wrongful death shall not be reduced based on race, ethnicity, or gender.
The District of Columbia is considering similar legislation. The Stormiyah Denson-Jackson Race and Gender Economic Damages Temporary Amendment Act states:
In an action for personal injury or death caused by wrongful act, neglect, or default, estimations, measures, or calculations of past, present, or future damages for lost earnings or impaired earning capacity should not be reduced based on race, ethnicity, or gender.
The most significant economic implication of this legislation is that economists must change how they calculate “damages.” “Damages” is a legal term — it is the amount of compensation injured people (plaintiffs) get for lost income when they are unable to work due to injury or some debilitating condition, which reduces their ability to earn.
The key issue here is how to calculate economic damages under these types of legislation.
Four relatively recent actions in the long history of reparations for African Americans include:
- Hearings held by the U.S. Congress in June 2019 on H.R. 40 would establish a Commission to Study and Develop Reparation Proposals for African-Americans Act. This bill was introduced on January 1, 2019.
- The Ashville, NC City Council, on July 14, 2020, passed a reparations bill. The measure provides funding to promote homeownership and business opportunities but stopped short of stipulating direct payments.
- California Gavin Newsom signed Governor signs AB 3121 on 09/30/2020, which established a first-in-the-nation task force to study and make recommendations on slavery reparations.
- Washington DC Councilmember Kenyan R. McDuffie, on 10/6/2020, introduced the Reparations Task Force Establishment Act of 2020 and the Sense of the Council to Declare Racism A Public Health Crisis in the District of Columbia Resolution of 2020.
Here, the key policy issue is how to significantly close racial income and wealth gaps, thereby reducing other social and physical disparities.