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    California Panel Sizes Up Reparations for Black Citizens

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    In the two years since nationwide social justice protests followed the murder of George Floyd, California has undertaken the nation’s most sweeping effort yet to explore some concrete restitution to Black citizens to address the enduring economic effects of slavery and racism.A nine-member Reparations Task Force has spent months traveling across California to learn about the generational effects of racist policies and actions. The group, formed by legislation signed by Gov. Gavin Newsom in 2020, is scheduled to release a report to lawmakers in Sacramento next year outlining recommendations for state-level reparations.“We are looking at reparations on a scale that is the largest since Reconstruction,” said Jovan Scott Lewis, a professor at the University of California, Berkeley, who is a member of the task force.While the creation of the task force is a bold first step, much remains unclear about whether lawmakers will ultimately throw their political weight behind reparations proposals that will require vast financial resources from the state.“That is why we must put forward a robust plan, with plenty of options,” Dr. Lewis said.The effort parallels others on a local level, in California and elsewhere, to address the nation’s stark racial disparities and a persistent wealth gap. The median wealth of Black households in the United States is $24,100, compared with $188,200 for white households, according to the most recent Federal Reserve Board Survey of Consumer Finances.In a preliminary report this year, the task force outlined how enslaved Black people were forced to California during the Gold Rush era and how, in the 1950s and 1960s, racially restrictive covenants and redlining segregated Black Californians in many of the state’s largest cities.Californians eligible for reparations, the task force decided in March, would be descendants of enslaved African Americans or of a “free Black person living in the United States prior to the end of the 19th century.” Nearly 6.5 percent of California residents, roughly 2.5 million, identify as Black or African American. The panel is now considering how reparations should be distributed — some favor tuition and housing grants while others want direct cash payments.The task force has identified five areas — housing discrimination, mass incarceration, unjust property seizures, devaluation of Black businesses and health care — in discussions for compensation. For example, from 1933 to 1977, when it comes to housing discrimination, the task force estimates compensation of around $569 billion, with $223,200 per person.Final figures will be released in the report next year; it would then be up to the Legislature to act upon the recommendations and determine how to fund them.The state and local efforts have faced opposition over the potentially steep cost to taxpayers and, in one case, derided as an ill-conceived campaign to impose an “era of social justice.”More on CaliforniaJaywalking Law: California has had one of the strictest jaywalking laws in the nation. Starting Jan. 1, that will no longer be the case.Remaking a River: Taming the Los Angeles River helped Los Angeles emerge as a global megalopolis, but it also left a gaping scar across the territory. Imagining the river’s future poses new challenges.A Piece of Black History Destroyed: Lincoln Heights — a historically Black community in a predominantly white, rural county in Northern California — endured for decades. Then came the Mill fire.Employee Strike: In one of the nation’s biggest strikes in recent years, teaching assistants, researchers and other workers across the University of California system walked off the job to demand higher pay.A two-day public meeting of the state task force this fall, in a makeshift hearing room tucked inside a Los Angeles museum, included a mix of comments from local residents on how they had been personally affected and how the disparities should be addressed, along with testimony from experts who have studied reparations.While even broad-scale reparations would be unlikely to eliminate the racial wealth gap, they could narrow it significantly, and proponents hope California’s effort will influence other states and federal legislators to follow suit.“Calling these local projects reparations is to some degree creating a detour from the central task of compelling the federal government to do its job,” said William A. Darity Jr., a professor at Duke University and a leading scholar on reparations. Even so, Dr. Darity, who is advising the California task force, said “there is an increasing recognition” that the lasting effects of slavery must be addressed.Every year for almost three decades, Representative John Conyers Jr. of Michigan introduced legislation that would have created a commission to explore reparations, but the measure consistently stalled in Congress. After Mr. Conyers retired in 2017, Representative Sheila Jackson Lee of Texas began championing the measure, which passed a House committee for the first time last year, but stalled on the floor.Underscoring the political hurdles, opinions on reparations are sharply divided by race. Last year, an online survey by the University of Massachusetts Amherst found that 86 percent of African Americans supported compensating the descendants of slaves, compared with 28 percent of white people. Other polls have also shown wide splits.Still, several efforts have gotten off the ground recently.In 2021, officials in Evanston, Ill., a Chicago suburb, approved $10 million in reparations in the form of housing grants. Three months later, officials in Asheville, N.C., committed $2.1 million to reparations. And over the summer, the Los Angeles County Board of Supervisors approved a plan to transfer ownership of Bruce’s Beach — a parcel in Manhattan Beach that was seized with scant compensation from a Black couple in 1924 — to the couple’s great-grandsons and great-great-grandsons.“We want to see the land and economic wealth stolen from Black families all across this country returned,” said Kavon Ward, an activist who advocated on behalf of the Bruces’ descendants and has since started a group, Where Is My Land, that seeks to help Black Americans secure restitution.“We are in a moment that we cannot let pass.”A so-called blight law from 1945, the task force’s interim report explains, paved the way for officials to use eminent domain to destroy Black communities, including shuttering more than 800 businesses and displacing 4,700 households in San Francisco’s Western Addition beginning in the 1950s.After work on Interstate 210 began later that decade, the report goes on, the freeway was eventually built in the path of a Black business district in Pasadena, where city officials offered residents $75,000 — less than the minimum cost to buy a new home in the city — for their old homes.And there is Russell City, an unincorporated parcel of Alameda County near the San Francisco Bay shoreline where many Black families fleeing racial terror in the Deep South built lives during the Great Migration. Testimony to the task force by Russell City residents recounts the community’s rise and ultimate bulldozing.A mural honoring the history of Russell City in what is now Hayward, Calif.Jim Wilson/The New York TimesMonique Henderson-Ford grew up hearing stories from her elders about Russell City, where many Black families fleeing racial terror in the Deep South built lives during the Great Migration.Jim Wilson/The New York TimesThe town was demolished to make way for an industrial park.Jim Wilson/The New York TimesUnlike neighboring Hayward and San Leandro, Russell City didn’t have racist housing covenants stipulating that only white families could own certain homes. After World War II, it grew into a small but tight community of Black and Latino families that once included seven churches.On weekends, children played on the unpaved streets as their parents, many of whom worked in the shipyards, sat on porches, and on some foggy nights, Ray Charles and Big Mama Thornton played shows at one of the town’s music venues, called the Country Club.“It was vibrant,” said Monique Henderson-Ford, who grew up hearing stories about Russell City from her mother, grandmother and cousins.After leaving Louisiana in the 1950s, her grandparents lived briefly in San Francisco but were displaced by an urban renewal project. Using savings from years of work at Pacific Gas & Electric, her grandfather paid $7,500 for their property and home in Russell City, and the family soon added three small houses to the homestead for their sons.“This was their American dream,” Ms. Henderson-Ford said in an interview.But it didn’t last long.Lacking sewer lines and reliable electricity, the area was designated as a blight, and officials called for its destruction and the area to be turned into an industrial park. Russell City was annexed into Hayward, and the city and county bought up some properties and seized others through eminent domain. Residents, including Ms. Henderson-Ford’s grandmother, pleaded with officials to be allowed to remain in their homes.“I got a nice place,” she told the Alameda County Board of Supervisors during a public meeting in 1963, according to a transcript. “Allow me a break.”In exchange for their property and homes, county officials gave the family roughly $2,200, less than a third of what it had originally paid, according to Ms. Henderson-Ford.On a recent morning, Ms. Henderson-Ford and her cousin joined a reporter on a walk through what was once Russell City but is now an industrial park.They passed the spot where their grandfather used to fish, yanking up striped bass from the bay as he peered northwest and watched San Francisco’s skyline take its distinctive shape.“Imagine if the houses were still here,” Ms. Henderson-Ford said. “We would all be sitting on a fortune.”Amid the uproar in 2020 over the murder of Mr. Floyd, a Black man, in police custody in Minneapolis, Artavia Berry, who lives in Hayward, knew she had to do something.“We could not look away from what happened right here,” said Ms. Berry, who learned the history of Russell City after moving to the region from Chicago a decade ago.Ms. Berry, who leads the Community Services Commission, a municipal advisory body, composed what would become a formal apology from the City of Hayward to onetime residents of Russell City. Last November, the City Council approved the resolution, as well as several follow-up steps.An aerial view of the area as the industrial park that replaced Russell City, lower right, was under construction in 1971.Hayward Area Historical SocietyA kindergarten class on the playground at a school in Russell City in 1949.Hayward Area Historical SocietyBut in a public letter to city officials, Hayward Concerned Citizens, the group that railed against an “era of social justice,” said the apology was misguided, arguing that Alameda County, not the City of Hayward, had pushed residents out.“We are strongly opposed to any direct financial reparations,” the group wrote.For Gloria Moore, who grew up in Russell City, the words stung.Now 79, she was 3 when her parents arrived in Russell City from Texarkana, Ark. Her mother worked as a cook at a local elementary school and her father worked for Todd Shipyards in the Bay Area. She still has vivid memories of walking to school in the mud when it rained, because the streets weren’t paved and there was no public transportation.After their home was taken for about $2,200, the family members struggled to regain the financial stability and community they had built in Russell City.By the 1970s, Ms. Moore had moved to Los Angeles to begin a career in city government, and she remembered noticing how many of her co-workers owned their own homes. She was renting.Over the years, she and other former residents of Russell City have gathered at a park in Hayward for a Labor Day reunion, where they share stories and often tears.“Sometimes things were suppressed because it was too painful,” she recalled. “But no one ever forgot.” More

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    The Subprime Loans for College Hiding in Plain Sight

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    Many families can borrow most of the cost of college using a Parent PLUS loan. This will not end well.If you want your kids to go to college but you can’t afford the bills, the federal government has a deal for you that will blow your mind.You can borrow the entire cost — minus any other aid your child receives — through something called a Parent PLUS loan. Moreover, your income — and thus your ability to repay the debt — doesn’t matter. As long as you don’t have one of a handful of black marks in your recent credit history, you can borrow six figures even if your take-home pay puts you below the federal poverty level.This is totally bananas. But don’t take my word for it.“The honest truth is that Congress created a subprime lending program unintentionally,” said Rachel Fishman of New America, the left-leaning think tank.“I absolutely hate them,” said Beth Akers, of the American Enterprise Institute, the right-leaning think tank, referring to these loans.“It’s gone completely off the rails,” said Justin Draeger, the president of the National Association of Student Financial Aid Administrators.Most parents don’t pay for college using this loan. But about 3.6 million of them — with about $107 billion in outstanding debt — have. Within that group are a number of low-income Black families at schools that may not have given their kids enough help in the way of scholarships. Many of those families are struggling to repay the money that the federal government so freely offered up.And, really, why wouldn’t moms and dads use a PLUS loan if it appears to be the least horrible option? For many people, parenting means keeping the American promise that children should do better than family members from previous generations. A college degree is a rocket booster that can help make that possible.When Congress created parent PLUS loans in 1980, there were decent reasons for doing so. College costs had increased, and many middle-income families struggled to pay for tuition out of their income. At the time, interest rates were also very high.The PLUS loan, which came with a lower-than-market interest rate, solved a worsening problem. It also made it easier for parents to pay a larger share of the bill and perhaps help their children borrow less.At the time, you could borrow only $3,000 per year. In 1992, that cap went away, thanks, it seems, to a successful push by a higher education lobbying association, according to a report from the Urban Institute report in 2019.What to Know About Student Loan Debt ReliefCard 1 of 5Many will benefit. More

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    What Will Happen to Black Workers’ Gains if There’s a Recession?

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    Black unemployment fell quickly after the initial pandemic downturn. But as the Federal Reserve fights inflation, those gains could be eroded.Black Americans have been hired much more rapidly in the wake of the pandemic shutdowns than after previous recessions. But as the Federal Reserve tries to soften the labor market in a bid to tame inflation, economists worry that Black workers will bear the brunt of a slowdown — and that without federal aid to cushion the blow, the impact could be severe.Some 3.5 million Black workers lost or left their jobs in March and April 2020. In weeks, the unemployment rate for Black workers soared to 16.8 percent, the same as the peak after the 2008 financial crisis, while the rate for white workers topped out at 14.1 percent.Since then, the U.S. economy has experienced one of its fastest rebounds ever, one that has extended to workers of all races. The Black unemployment rate was 6 percent last month, just above the record low of late 2019. And in government data collected since the 1990s, wages for Black workers are rising at their fastest pace ever.Now policymakers at the Fed and in the White House face the challenge of fighting inflation without inducing a recession that would erode or reverse those workplace gains.Decades of research has found that workers from racial and ethnic minorities — along with those with other barriers to employment, such as disabilities, criminal records or low levels of education — are among the first laid off during a downturn and the last hired during a recovery.William Darity Jr., a Duke University professor who has studied racial gaps in employment, says the problem is that the only reliable tool the Fed uses to fight inflation — increasing interest rates — works in part by causing unemployment. Higher borrowing costs make consumers less likely to spend and employers less likely to invest, reducing pressure on prices. But that also reduces demand for workers, pushing joblessness up and wages down.“I don’t know that there’s any existing policy option that’s plausible that would not result in hurting some significant portion of the population,” Mr. Darity said. “Whether it’s inflation or it’s rising unemployment, there’s a disproportionate impact on Black workers.”In a paper published last month, Lawrence H. Summers, a former Treasury secretary and top economic adviser to Presidents Bill Clinton and Barack Obama, asserted with his co-authors that the Fed would need to allow the overall unemployment rate to rise to 5 percent or above — it is now 3.5 percent — to bring inflation under control. Since Black unemployment is typically about double that of white workers, that suggests that the rate for Black workers would approach or reach double digits.In an interview, Mr. Summers said that outcome would be regrettable and, to some extent, unavoidable.“But the alternative,” Mr. Summers argued — “simply pretending” the U.S. labor market can remain this hot — “is setting the stage for the mistakes we made in the 1970s, and ultimately for a far larger recession, to contain inflation.”The State of Jobs in the United StatesEmployment gains in July, which far surpassed expectations, show that the labor market is not slowing despite efforts by the Federal Reserve to cool the economy.July Jobs Report: U.S. employers added 528,000 jobs in the seventh month of the year. The unemployment rate was 3.5 percent, down from 3.6 percent in June.Slow Wage Growth: Pay has been rising rapidly for workers at the top and the bottom. But things haven’t been so positive for all professions — especially for pharmacists.Care Worker Shortages: A lack of child care and elder care options is forcing some women to limit their hours or has sidelined them altogether, hurting their career prospects.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.“These arguments have nothing to do with how much you care about unemployment, or how much you care about the unemployment of disadvantaged groups,” he continued. “They only have to do with technical judgment.”Many progressive economists have been sharply critical of that view, arguing that Black workers should not be the collateral damage in a war on inflation. William Spriggs, an economist at Howard University, cautioned against overstating the Fed’s ability to bring inflation under control — especially when inflation is being driven in part by global forces — and underestimating the potential damage from driving interest rates much higher.Black workers will suffer first under a Fed-induced recession, Mr. Spriggs said. When that happens, he added, job losses across the board tend to follow. “And so you pay attention, because that’s the canary in the coal mine,” he said.In a June 2020 essay in The Washington Post and an accompanying research paper, Jared Bernstein — now a top economic adviser to President Biden — laid out the increasingly popular argument that in light of this, the Fed “should consider targeting not the overall unemployment rate, but the Black rate.”Fed policy, he added, implicitly treats 4 percent unemployment as a long-term goal, but “because Black unemployment is two times the overall rate, targeting 4 percent for the overall economy means targeting 8 percent for blacks.”The Fed didn’t take Mr. Bernstein’s advice. But in the years leading up to the pandemic, Fed policymakers increasingly talked about the benefits of a strong labor market for racial and ethnic minorities, and cited it as a factor in their policy decisions.After Mr. Biden took office, he and his economic advisers pushed for a large government spending bill — which became the $1.9 trillion American Recovery Plan — in part on the grounds that it would avoid the painful slog that job seekers, particularly nonwhite workers, faced after the 2007-9 recession and would instead deliver a supercharged recovery.Federal pandemic relief provided a cushion for Ms. Jordan, at her home near Atlanta with her husband and children. Rita Harper for The New York Times“It’s been faster, more robust for African Americans than any other post-recessionary periods since at least the 1970s,” Cecilia Rouse, the chair of Mr. Biden’s Council of Economic Advisers, said in an interview. Black workers are receiving faster wage gains than other racial and ethnic groups, and have taken advantage of the strong job market to move into higher-paying industries and occupations, according to an analysis of government data by White House economists shared with The New York Times.Menyuan Jordan is among them. Ms. Jordan, who has a master’s degree in social work and was making a living training child care providers in February 2020, saw her livelihood upended when Covid-19 struck.“The money was based off face-to-face professional development that went to zero almost immediately overnight,” she said. “I couldn’t afford the rent.”But pandemic relief packages from the federal government helped cushion the blow of lost earnings. And by last winter, Ms. Jordan had landed a job as a mental health clinician near her home in Atlanta — one that offered training and paid roughly $13,000 more than her prepandemic role, which she estimates brought in $42,000 annually.Administration officials say they are optimistic that Black workers can continue to see higher wages and improving job opportunities even if the labor market cools. But Goldman Sachs analysts, echoing a common view, recently concluded that average wage gains for workers would need to fall much further to be consistent with the Fed’s inflation goals.Fed policymakers are still somewhat hopeful that they can bring down inflation without causing a recession or undoing the gains of the past two years, in part because of a hope that the labor market can slow down mainly through reductions in job openings rather than layoffs.Jerome H. Powell, the Fed chair, has made the case that only by bringing inflation under control can the central bank create a sustainably strong labor market that will benefit all workers.“We all want to get back to the kind of labor market we had before the pandemic,” Mr. Powell said in a news conference last month. “That’s not going to happen without restoring price stability.”Some voices in finance are calling for smaller and fewer rate increases, worried that the Fed is underestimating the ultimate impact of its actions to date. David Kelly, the chief global strategist for J.P. Morgan Asset Management, believes that inflation is set to fall considerably anyway — and that the central bank should exhibit greater patience, as remnants of pandemic government stimulus begin to vanish and household savings further dwindle.“The economy is basically treading water right now,” Mr. Kelly said, adding that officials “don’t need to put us into a recession just to show how tough they are on inflation.”Michelle Holder, a labor economist at John Jay College of Criminal Justice, similarly warned against the “statistical fatalism” that halting labor gains is the only way forward. Still, she said, she’s fully aware that under current policy, trade-offs between inflation and job creation are likely to endure, disproportionately hurting Black workers. Interest rate increases, she said, are the Fed’s primary tool — its hammer — and “a hammer sees everything as a nail.”Reflecting on a dinner she recently attended in Washington with “really high-level, all-white progressive economists,” Ms. Holder, who is Black, said there was a “resigned attitude” among many of her peers, who want positive near-term outcomes for people of color overall but remain “wedded to the use of mainstream tools” and ask, “What else can we do?”Mr. Darity, the Duke professor, argued that one solution would be policies that helped insulate workers from an economic downturn, like having the federal government guarantee a job to anyone who wants one. Some economists support less ambitious policies, such as expanded benefits to help people who lose jobs in a recession. But there is little prospect that Congress would adopt either approach, or come to the rescue again with large relief checks — especially given criticism from many Republicans, and some high-profile Democrats, that excessive aid in the pandemic contributed to inflation today.“The tragedy will be that our administration won’t be able to help the families or individuals that need it if another recession happens,” Ms. Holder said.Morgani Brown, 24, lives and works in Charlotte, N.C., and has experienced the modest yet meaningful improvements in job quality that many Black workers have since the initial pandemic recession. She left an aircraft cleaning job with Jetstream Ground Services at Charlotte Douglas International Airport last year because the $10-an-hour pay was underwhelming. But six months ago, the work had become more attractive.Morgani Brown returned to an employer she had left in Charlotte, N.C., when the hourly pay rose. Damola Akintunde for The New York Times“I’d seen that they were paying more, at $14,” she said, “so I went and applied for Jetstream again.” She remains frustrated with some work conditions, but said the situation had “ended up being better.”With rents rising, she saves money rooming with her boyfriend and another friend, both of whom work at an Amazon fulfillment center. Ms. Brown, who has a baby on the way, is aware that the e-commerce giant has recently cut back its work force. (An Amazon official noted on a recent earnings call that the company had “quickly transitioned from being understaffed to being overstaffed.”)Ms. Brown said she and her roommates hoped that their jobs could weather any downturn. But she has begun hearing more rumblings about people she knows being fired or laid off.“I’m not sure exactly why,” she said. More

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    Inflation Reduction Act to Rewrite Embattled Black Farmer Relief Program

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    To circumvent legal objections, the new law will provide aid to farmers who have faced discrimination, regardless of their race.WASHINGTON — A $4 billion program to help Black and other “socially disadvantaged” farmers that never got off the ground last year amid legal objections will be replaced with a plan to make relief funds available to farmers who have faced discrimination.The changes, which are tucked into the climate and tax legislation that is known as the Inflation Reduction Act of 2022, are drawing backlash from the farmers whom the original debt relief program, part of the $1.9 trillion American Rescue Plan of 2021, was intended to help. The new program is the latest twist in an 18-month stretch that has underscored the challenges facing the Biden administration’s attempts to make racial equity a centerpiece of its economic agenda.Black farmers have been in limbo for months, not knowing if the debt relief they were promised would be granted. Many invested in new equipment after applying last year for money to help defray their debt. Some received foreclosure notices from the Department of Agriculture this year as the program languished.The legislation, which passed the Senate this week and is expected to pass the House on Friday, would create two new funds to help farmers. One, at $2.2 billion, would provide financial assistance to farmers, ranchers and forest landowners who faced discrimination before 2021. The other would provide $3.1 billion for the Agriculture Department to make payments for loans or loan modifications to farmers who faced financial distress.The money would replace the $4 billion program that was intended to aid about 15,000 farmers who received loans from the federal government or had bank loans guaranteed by the Agriculture Department. They included farmers and ranchers who had been subject to racial or ethnic prejudice, including those who are Black, American Indian/Alaskan Native, Asian American, Pacific Islander or Hispanic.Last year’s pandemic relief package included an additional $1 billion for outreach to farmers and ranchers of color and for improving their access to land.White farmers and groups representing them questioned whether the government could base debt relief on race and said the law discriminated against them. The program was frozen as lawsuits worked their way through the courts.The program also faced resistance from banks, which argued that their profits would suffer if the loans they had made to farmers were suddenly repaid.Fearful that the program would be blocked entirely, Democrats rewrote the law to remove race from the eligibility requirements. It is not clear how discrimination will be defined, and the legislation appears to give the Agriculture Department broad discretion to distribute the money as it sees fit.Groups representing Black farmers, who have faced decades of discrimination from banks and the federal government, are disappointed that the money will no longer be reserved specifically for them.What’s in the Climate, Health and Tax BillCard 1 of 8What’s in the Climate, Health and Tax BillA new proposal. More

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    Oakland Cannabis Sellers, Once Full of Hope, Face a Harsh Reality

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    OAKLAND, Calif. — Across from where the Athletics play baseball sits a two-story concrete building painted bright orange and white. It is home to a cannabis dispensary called Blunts and Moore.A pair of inflatable “tube guys” flap crazily on the roof, beckoning customers with their windblown gyrations. A food truck sells tacos in the parking lot under a bright California sun.But there are signs that all is not well here. Bullet holes etched by an assault rifle dot the entrance. Three security guards, dressed in military fatigues, screen customers as they pass through a metal detector. One of the guards, a former infantryman, wears a camouflage Kevlar vest and mirrored sunglasses. A 9-millimeter pistol and 50 rounds of ammunition are strapped to his waist.“It’s crazy to think we need all this war stuff to protect our business,” said the store’s owner, Alphonso Blunt, who is known as Tucky. “But that’s where we are today.”In May 2020, Blunts and Moore was ransacked by thieves with automatic weapons, incurring losses of nearly $1 million, much of which insurance would not cover. The store, which has the air of a high-end boutique, was robbed again in late November, its shelves cleared and the floor speckled with blood from where the thieves had cut their hands on all the smashed glass. Struggling financially, Mr. Blunt turned to his landlord for a rescue but had to give up some managerial control of the store.This is not what Mr. Blunt, the City of Oakland or the State of California had in mind for an ambitious effort to help grow a cannabis industry and provide financial opportunity to struggling neighborhoods with a large number of Black and Hispanic residents.The city’s social equity initiative is designed to help entrepreneurs like Alphonso Blunt, who was arrested for a nonviolent cannabis offense in 2005. He was granted an equity license in 2018 by the city to run his dispensary, Blunts and Moore. Mr. Blunt is among the entrepreneurs in Oakland, many of whom are Black, who were granted equity licenses to run cannabis businesses after California legalized the substance for recreational use in 2016. Applicants who live in areas that had a high number of drug-related arrests or who have a cannabis-related arrest record are given priority to receive the licenses.Race has often been at the heart of the movement to legalize cannabis. Some states legalized the drug largely to stop the cannabis-related arrests that disproportionately ensnared Black and Hispanic people. But there has also been a push by lawmakers in states like California, Illinois and New Jersey to ensure that those same communities can profit from the legalized industry, which has been largely dominated by white owners, some of whom have made a fortune on cannabis.On Thursday, Gov. Kathy Hochul of New York announced that the state planned to give its first cannabis retail licenses to people who had been convicted of a cannabis crime or their relatives.Oakland was one of the first cities to prioritize equity licenses for those like Mr. Blunt, 42, who got teased in high school because his name is a common term for a cannabis cigar. In 2005, he was arrested and accused of possessing several small bags of the drug. The nation’s emerging cannabis industry is being shaped by the broader push for racial justice and the belief that creating business opportunities for Black individuals will help lift communities.But interviews with more than 30 cannabis business owners, investors and regulators in California, an early adopter of equity licenses, show how the hope of fixing historical wrongs is being challenged by the reality of an industry facing troubled business conditions, including issues like high taxes and volatile sales.Billy Martin, left, helping a customer at Blunts and Moore. The store has been robbed at least twice, one of those times by assailants with automatic weapons.Some of the problems are being exacerbated by conflicting state and federal policies. Even as 18 states have legalized the substance for recreational use, the federal government still prohibits it.That means cannabis stores are limited in their access to federally regulated banking services, such as credit cards. Forced to deal largely in cash, the businesses can be a tantalizing target for thieves.The federal prohibition also makes it difficult to obtain bank financing or small-business loans, forcing some Black social equity applicants to enter deals with investors who sometimes end up controlling the business.Another challenge is policing. Some say the police in Oakland, at times, have not switched their mind-set from arresting cannabis dealers to protecting their legal businesses. During a wave of robberies late last year, the police never showed up to some of the crimes, business owners say. The police say a surge in crime during the pandemic has stretched their resources.Insurance companies are also adding to the challenges. Some owners said their claims were denied even though their policies indicated they would be covered. Others said they believe they were treated unfairly during the claims process because they were Black. “You are giving licenses to people who would struggle in any industry, but in cannabis, the deck is further stacked against them,” said John Hudak, deputy director of the Center for Effective Public Management at the Brookings Institution. “States need to do a better job adjusting for the structural racism built into the system.”Since the initiative began in 2017, Oakland has granted cannabis licenses to 282 equity applicants and 328 non-equity applicants. But the city does not keep an ongoing tally of how many of those businesses are currently operating.“While not a panacea, this program is a meaningful step toward embedding fairness and justice in all we do to improve conditions for communities of color,” Greg Minor, an assistant to the city administrator, said in an email. Amid the industry’s struggles, Mr. Minor said, the state recently authorized a $5.4 million grant to support Oakland’s equity program and was considering reducing the cannabis taxes.But for Mr. Blunt, legalization has not produced the boon some might expect. Since he opened his licensed store four years ago, Mr. Blunt has yet to generate a profit.“Social equity sounds like peaches and cream,” Mr. Blunt said. “But I did better selling weed on the street than I am doing right now.”Thin margins and, often, lossesKeith Stephenson started his dispensary, Purple Heart Patient Center, in 2006, but financial difficulties and a robbery in 2020 led him to close it. He hopes to reopen.Keith Stephenson, 53, is a former aviation maintenance technician who is originally from South Los Angeles. He suffers from a severe form of arthritis and takes cannabis to relieve his constant pain.“Cannabis saved my life,” he said.Mr. Stephenson opened his dispensary on Fourth Street in downtown Oakland in 2006, 10 years after California legalized cannabis for medical use.His goal has long been to own a publicly traded cannabis company. But his store has been closed to customers for nearly two years, the result of theft, vandalism and an insurance company that he says treated him poorly because of his race.When Mr. Stephenson started his business, there were few of the generous loans or rent subsidies that the city’s equity initiative now provides. He took out a second mortgage on his house and put up $60,000 in cash as collateral for a secured bank loan. He called the store the Purple Heart Patient Center, inspired by a cannabis strain known as the Granddaddy Purple.Business was rough at first. He was losing $130,000 each month, paying to process the raw cannabis, and for security guards at the front door.Broader legalization brought more customers, but not necessarily higher profits. The state and city impose steep taxes — which can total more than 30 percent of each sale. Some dispensaries take in about $3 million in revenue annually, but their taxes and expenses leave little left over.Mr. Stephenson bought a pair of four-ton safes to store his cash and inventory.Yet there has been a perception around Oakland, he said, that cannabis operators are swimming in money.On May 29, 2020, Mr. Stephenson was watching the news about the murder of George Floyd when he looked at footage from his store’s security camera on his phone. A man was trying to break in through the bulletproof front door.Over the next few days, a band of thieves returned and ransacked the store, stealing everything they could. The police told him they were too busy with the broader unrest provoked by Mr. Floyd’s killing to help.The real fight came months later, when his insurance company reviewed his claims. The adjuster, he said, asked him “leading and insulting” questions, like whether he had left the door open or whether Mr. Stephenson personally knew any of the thieves.“Are you kidding me?” Mr. Stephenson said in recounting the conversation. “Did I leave the door open? Come on, man. Why is the door beaten in?”At one point, the adjuster falsely suggested that money had been taken from an A.T.M. inside the store. Mr. Stephenson believed the adjuster wanted to see if he could catch him in a lie. “It is my belief he would not have said that if I was a white male,” he said.Christy Thiems, a senior director at American Property Casualty Insurance Association, a trade group, said that she did not know the specifics of Mr. Stephenson’s case, but that the claims process could be difficult. Some questioning, she said, could seem offensive to a business owner because adjusters were acting like investigators. Only a limited number of insurance companies are willing to cover the cannabis industry, she added, because of the federal prohibition, and the few insurers operating in the sector are still trying to understand the “unique risk” that the businesses pose.In the end, Mr. Stephenson’s insurer rejected most of his claims. Mr. Stephenson is still planning to reopen his doors to customers late next month or in May.“There is no Plan B,” he said.‘Where are the police?’Amber Senter in the doorway of a secured area at her cannabis facility, damaged by robbers. The police wouldn’t go to the site when she reported the break-in.Weighing a package of cannabis-infused honey at Ms. Senter’s facility.The honey and other extracts can be used in edible products.In the early hours of Nov. 20, a group of 12 people, many of their faces obscured by sweatshirt hoods, streamed into Amber Senter’s cannabis manufacturing facility in East Oakland.This is where Ms. Senter provides space to help social equity cannabis businesses get off the ground.The robbers broke through the first door easily, security footage showed, then a second door and a third. Most of the cannabis product was locked in a cage, which the thieves couldn’t breach. Ms. Senter estimates that the damage totaled $20,000.But when she called the police, they told her to fill out a report online. “Where are the police?” Ms. Senter said. “Why aren’t they helping us?”Over one 24-hour period in November, the police said, they investigated more than a dozen reported burglaries of cannabis businesses across Oakland, including several in which the thieves were armed and one in which officers were shot at as they responded.That rash of robberies followed burglaries and crimes at other cannabis businesses through the spring and summer of 2020.In a statement, a spokesman for the Oakland Police Department said it “treats the cannabis businesses as it does all businesses in the city of Oakland” and added that the police were engaged in “ongoing meetings with cannabis business owners” over safety issues.Ersie Joyner, a security consultant to the cannabis industry, is a former Oakland police captain. He was shot multiple times during a robbery at this Oakland gas station.Ersie Joyner, a retired captain in the Oakland Police Department, said that after arresting drug dealers for decades, some officers still did not respect the cannabis industry as a legitimate enterprise.Mr. Joyner, who supervised Mr. Blunt’s arrest 17 years ago, understands how ingrained drug prosecution is in law enforcement.“The messaging from the highest level of government was that drugs are bad and destroying the community, and law enforcement should have zero tolerance,” Mr. Joyner said. “Looking back, it was absolutely the wrong way of dealing with this societal issue.”Mr. Joyner, who now works as a security consultant to cannabis businesses, said the police needed to adjust their attitudes. He said it took the Oakland police nearly three hours to dispatch officers to the store of one of his clients, whose cannabis business had been robbed.“If this happened to Bank of America, the police would have a more robust response,” said Mr. Joyner, who was nearly killed in a shootout with robbers at an Oakland gas station in late October. The doctors, he said, found 22 bullet holes in his body.In many instances, private security companies are acting as the unofficial police force of the city’s cannabis industry.A door broken in a robbery awaiting repair at Blunts and Moore.One security firm, Black Anchor Tactical Response, operates a set of sport utility vehicles with a color scheme similar to those of Oakland police cruisers. When a client transports cannabis from a warehouse to a store, the company’s guards, some of whom are veterans who served in Iraq and Afghanistan, block off city streets to prevent ambushes. The firm also guards cannabis operators’ homes.While it is difficult to pinpoint what prompted surging crime during the pandemic, the legacy of mass drug arrests still looms over Oakland.About 71 percent of those arrested on suspicion of cannabis offenses in Oakland between 1995 and 2015 were Black, according to an analysis by the city. During that time, Oakland’s Black population was 30 percent.The robberies and property damage are compounding the cannabis industry’s other challenges, such as high taxes.“Why would I want to transition to the legal market if I know I am going to go broke?” said Chaney Turner, a member of the city’s Cannabis Regulatory Commission.Chaney Turner, a member of the city’s Cannabis Regulatory Commission, said the legal, heavily taxed industry had a hard time competing with the lower prices charged on the street.‘This is not sustainable’When Tucky Blunt was selected for one of Oakland’s first equity cannabis licenses in early 2018, he remembers shouting out his gratitude to the crowd gathered at City Hall.“Praise you all,” Mr. Blunt said.Mr. Blunt, who started selling cannabis to his co-workers at a grocery store when he was 16, also remembers being surrounded that day by representatives from established cannabis companies looking to be his partner. Some wanted to lend him money in exchange for an ownership stake in his store; he wanted to own it outright.But he didn’t have the money needed to start a licensed business. So he agreed to do a deal with a larger cannabis operator, Grizzly Peak, started by a real estate contractor from San Diego named Dave Gash.Grizzly Peak, which focuses on cultivating cannabis, was denied a dispensary license in Oakland and was looking for a partner to open a store.Faced with financial difficulties, Mr. Blunt, left, accepted help from his landlord but ceded more managerial control. He still owns the business.Mr. Blunt was proud of his store’s appearance: glass cases displaying cannabis cigarettes and brightly colored packs of gummies and lots of natural light.But Mr. Blunt also struggled with the rising taxes; the cost of the armed guards, who are each paid about $30 an hour; and the looting in the late spring of 2020.The bigger problem, he said, was that one of his partners, who oversaw the books, stopped paying taxes and vendors. A year ago, Mr. Blunt had to close for several months because the store’s finances were a shambles.Grizzly Peak agreed to bail him out, but Mr. Gash told Mr. Blunt, “We have to do it our way, and we need total control.”Mr. Gash’s company has now taken tighter oversight of the store and will split any profits with Mr. Blunt, who still owns a majority stake in the store but is paid a salary as a consultant.“I am grateful that Grizzly Peak believes in me,” Mr. Blunt said. “I wouldn’t be in business without them.”In late November, business was looking up. The store’s finances had been stabilized. But then, a few days before Thanksgiving, Mr. Blunt’s store was robbed for the second time in 18 months. The thieves cleared out much of the store.“This,” he said, “is not sustainable.”“My guys are seeing things they saw in combat,” said Gerritt Jones, center, who served in the Army and is the founder of Black Anchor Tactical Response, which provides security services to cannabis businesses. 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    Black Farmers Fear Foreclosure as Debt Relief Remains Frozen

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    Lawsuits from white farmers have blocked $4 billion of pandemic aid that was allocated to Black farmers in the American Rescue Plan.WASHINGTON — For Brandon Smith, a fourth-generation cattle rancher from Texas, the $1.9 trillion stimulus package that President Biden signed into law nearly a year ago was long-awaited relief.Little did he know how much longer he would have to wait.The legislation included $4 billion of debt forgiveness for Black and other “socially disadvantaged” farmers, a group that has endured decades of discrimination from banks and the federal government. Mr. Smith, a Black father of four who owes about $200,000 in outstanding loans on his ranch, quickly signed and returned documents to the Agriculture Department last year, formally accepting the debt relief. He then purchased more equipment for his ranch, believing that he had been given a financial lifeline.Instead, Mr. Smith has fallen deeper into debt. Months after signing the paperwork he received a notice informing him that the federal government intended to “accelerate” foreclosure on his 46-acre property and cattle if he did not start making payments on the loans he believed had been forgiven.“I trusted the government that we had a deal, and down here at the end of the day, the rug gets pulled out from under me,” Mr. Smith, 43, said in an interview.Black farmers across the nation have yet to see any of Mr. Biden’s promised relief. While the president has pledged to pursue policies to promote racial equity and correct decades of discrimination, legal issues have complicated that goal.In May 2021, the Agriculture Department started sending letters to borrowers who were eligible to have their debt cleared, asking them to sign and return forms confirming their balances. The payments, which also are supposed to cover tax liabilities and fees associated with clearing the debt, were expected to come in phases beginning in June.But the entire initiative has been stymied amid lawsuits from white farmers and groups representing them that questioned whether the government could offer debt relief based on race.Courts in Wisconsin and Florida have issued preliminary injunctions against the initiative, siding with plaintiffs who argued that the debt relief amounted to discrimination and could therefore be illegal. A class-action lawsuit against the U.S.D.A. is proceeding in Texas this year.The Biden administration has not appealed the injunctions but a spokeswoman for the Agriculture Department said it was continuing to defend the program in the courts as the cases move forward.The legal limbo has created new and unexpected financial strains for Black farmers, many of whom have been unable to make investments in their businesses given ongoing uncertainty about their debt loads. It also poses a political problem for Mr. Biden, who was propelled to power by Black voters and now must make good on promises to improve their fortunes.The law was intended to help remedy years of discrimination that nonwhite farmers have endured, including land theft and the rejection of loan applications by banks and the federal government. The program designated aid to about 15,000 borrowers who receive loans directly from the federal government or have their bank loans guaranteed by the U.S.D.A. Those eligible included farmers and ranchers who have been subject to racial or ethnic prejudice, including those who are Black, Native American, Alaskan Native, Asian American, Pacific Islander or Hispanic.After the initiative was rolled out last year, it met swift opposition.Banks were unhappy that the loans would be repaid early, depriving them of interest payments. Groups of white farmers in Wisconsin, North Dakota, Oregon and Illinois sued the Agriculture Department, arguing that offering debt relief on the basis of skin color is discriminatory, suggesting that a successful Black farmer could have his debts cleared while a struggling white farm could go out of business. America First Legal, a group led by the former Trump administration official Stephen Miller, filed a lawsuit making a similar argument in U.S. District Court for the Northern District of Texas.Last June, before the money started flowing, a federal judge in Florida blocked the program on the basis that it applied “strictly on racial grounds” irrespective of any other factor.The delays have angered the Black farmers that the Biden administration and Democrats in Congress were trying to help. They argue that the law was poorly written and that the White House is not defending it forcefully enough in court out of fear that a legal defeat could undermine other policies that are predicated on race.Those concerns became even more pronounced late last year when the government sent thousands of letters to minority farmers who were behind on their loan payments warning that they faced foreclosure. The letters were sent automatically to any borrowers who were past due on their loans, including about a third of the 15,000 socially disadvantaged farmers who applied for the debt relief, according to the Agriculture Department.Leonard Jackson, a cattle farmer in Muskogee, Okla., received such a letter despite being told by the U.S.D.A. that he did not need to make loan payments because his $235,000 in debt would be paid off by the government. The letter was jarring for Mr. Jackson, whose father, a wheat and soybean farmer, had his farm equipment foreclosed on by the government years earlier. The prospect of losing his 33 cows, house and trailer was unfathomable.“They said that they were paying off everybody’s loans and not to make payments and then they sent this,” Mr. Jackson, 55, said.The legal fight over the funds has stirred widespread confusion, with Black and other farmers stuck in the middle. This year, the Federation of Southern Cooperatives has been fielding calls from minority farmers who said their financial problems have been compounded. It has become even harder for them to get access to credit now, they say, that the fate of the debt relief is unclear.“It has definitely caused a very significant panic and a lot of distress among our members,” said Dãnia Davy, director of land retention and advocacy at the Federation of Southern Cooperatives/Land Assistance Fund.Mr. Smith bought more equipment for his ranch when he thought aid was finally on the way. But now he’s deeper in debt.Montinique Monroe for The New York TimesThe Agriculture Department said that it was required by law to send the warnings but that the government had no intention of foreclosing on farms, citing a moratorium on such action that was put in place early last year because of the pandemic. After The New York Times inquired about the foreclosure letters, the U.S.D.A. sent borrowers who had received notices another letter late last month telling them to disregard the foreclosure threat.“We want borrowers to know the bottom line is, actions such as acceleration and foreclosure remain suspended for direct loan borrowers due to the pandemic,” Kate Waters, a department spokeswoman, said. “We remain under the moratorium, and we will continue to communicate with our borrowers so they understand their rights and understand their debt servicing options.”The more than 2,000 minority farmers who receive private loans that are guaranteed by the U.S.D.A. are not protected by the federal moratorium and could still face foreclosure. Once the moratorium ends, farmers will need to resume making their payments if the debt relief program or an alternative is not in place.Some Black farmers argue that the Agriculture Department, led by Secretary Tom Vilsack, was too slow to disburse the debt relief and allowed critics time to mount a legal assault on the law.The Biden administration has been left with few options but to let the legal process play out, which could take months or years. The White House had been hopeful that a new measure in Mr. Biden’s sweeping social policy and climate bill would ultimately provide the farmers the debt relief they have been expecting. But that bill has stalled in the Senate and is unlikely to pass in its current form.“While we continue to defend in court the relief in the American Rescue Plan, getting the broader relief provision that the House passed signed into law remains the surest and quickest way to help farmers in economic distress across the nation, including thousands and thousands of farmers of color,” Gene Sperling, the White House’s pandemic relief czar, said in a statement.For Black farmers, who have seen their ranks fall from more than a million to fewer than 40,000 in the last century amid industry consolidation and onerous loan terms, the disappointment is not surprising. John Boyd, president of the National Black Farmers Association, said that rather than hearing about more government reports on racial equity, Black farmers want to see results.“We need implementation, action and resources to farm,” Mr. Boyd said. More