The G.I. Bill created a prosperous middle class that was altogether too white.
In 1944 President Franklin Roosevelt signed into law the Servicemen’s Readjustment Act, popularly known as the G.I. Bill. The G.I. Bill doubled the number of bachelor’s degrees in 1950 compared to 1940 (i.e., before the United States entered the war) and allowed veterans to buy houses with low interest rates and no money down, expanding homeownership from 44 percent of households in 1940 to 55 percent in 1950. The bill prevented a return to the Great Depression, lifted millions of American families into the middle class, and paved the way for Baby Boomers to become the richest generation in American history, with an average household net worth of $1.64 million. If you are white, grew up in the suburbs, and belong today to the professional class, the G.I. Bill very likely put you there.
It certainly did for me. My father, who passed away in June, was the first Noah to hold a college degree and the first to own his own home, going back at least as far as July 1863, when my great-great-grandfather Morris Noah, who made his living rolling cigars in store windows, emigrated from London to Jersey City. Today all my father’s children hold bachelor’s degrees, all have owned their own homes, and none is at any foreseeable risk of financial ruin. Some would say that’s thanks to a U.S. economy more vibrant than that of the Old World, but before the G.I. Bill, prosperity eluded three generations of Noahs in America. So thank you, President Roosevelt.
African Americans have less cause to feel grateful for the G.I. Bill. That’s because the bill was drafted by Representative John Rankin, a segregationist white Democrat from Mississippi and chairman of the House Veterans Committee, to minimize the availability of benefits to the 1.2 million Black soldiers who fought in World War II. This was achieved by administering benefits at the state level. The worst abuses, of course, were in the South, where 79 percent of all Black veterans lived; in some Southern states, a group representing Black veterans said in 1947, postmasters wouldn’t even deliver to Black households the applications necessary to receive terminal leave pay for wartime service.
But of course the G.I. Bill’s effectiveness was hampered in the North too through discriminatory admissions policies by colleges and through redlining by banks. In New York and New Jersey, 67,000 mortgages were insured through the G.I. Bill. Of those, fewer than 100 went to nonwhites. Levittown, the most famous postwar suburban development, explicitly excluded Blacks. As one Levittown lease stated, “The tenant agrees not to permit the premises to be used or occupied by any other persons than members of the Caucasian race.”
The American Academy of Arts and Sciences, in an excellent new report titled “Advancing a People-First Economy,” suggests we do something about this.