Wednesday, January 12, 2022

Is Supporting Black Businesses Economic Survival Going Forward in 2022?

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Supporting Black Businesses Is NO longer An Option - It is ECONOMIC Survival!
Photo Credit: Freddy Kearney | Unsplash

By Kamau Austin, Publisher Black News Scoop

Today I was on a popular Black group on a mainstream social media site and saw the question: Why should Blacks support Black business?  I must admit was a bit annoyed by one of the responders giving some push back on supporting black business.

It has been our work, as a media company, to advocate economic and business development to help enhance Black wealth. Our company AMS Digital has profiled and showcased over 3,600 feature stories on Black businesses, cultural institutions, and community organizations in the last few years.  This is an essential topic to our economic survival so I am sharing the following thoughts on subject.  

It is economic survival. Do you know Blacks in the US only have 1/10th of the wealth of whites?   Do you know Black college grads make less average income than white high school graduates?

Do you know Blacks get less than 3% of venture capital and fed contracts for business?  Do you realize if present things don't change Blacks will have a average median wealth of zero (0) by 2053?  This is reported on by Black Enterprise

One of the responders commented that other ethnic groups stay in their communities and shop because it is convenient.  They seem to feel that other ethnic groups have little planning to purposefully avoid supporting Black businesses.

However, I wonder why is it other ethnic groups tend to stay in their communities and support their businesses out of convenience and economic development however these same ethnic groups rarely come to even upscale Black communities to support our businesses?

Other ethnic groups may live in their communities but come to our community to often start their businesses to get our dollars?  So it seems they can stay in their communities except when it comes to making money - then they come to our communities?

Our society is obviously structured so Blacks are marginalized in terms of business ownership and primarily put in positions of consumerism and investment of other racial groups and mainstream corporations. In the US whites have almost I've seen any where from $96 trillion to $100 trillion dollars in wealth while Blacks collectively only have a few trillion.

So given our social and economic conditions it begs the question: why don't we support and invest more in our own businesses?  Because what we're doing now definitely isn't working. 

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Article On Reasons To Support Black Businesses Continues Below...

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As much as 80% of wealth is built through real estate ownership in the United States.  However, Blacks today are losing hundreds of billions of dollars in wealth and have lost trillions of dollars in the past.  Real estate is an essential investment and business in the US.

These aren't my stats.  The Brookins Institute did a study and found out Black Real Estate is undervalued on average by $48,000 per unit amounting to an $156 billion dollar short fall in Black wealth.  These are recent figures not past inequities.

Newsday, a newspaper in the Long Island region of New York, also did an undercover study in Long Island and came up with a similar study that black housing on Long Island is undervalued by about $48,000 for compatible housing that was owned by whites. In some studies they had Black home owners offered less than white families by as much as $150K for the same house in the same neighborhood by switching the persons race presented as owners.  For more info on this click here

Black home owners even in white neighborhoods or integrated neighborhoods like across Long Island according to the Newsday, undercover research - were offered less money and the white home owners were offered a lot more money.   In my experience Blacks even in white communities take down pictures and cultural items when selling their homes.

Redlining is well known in most RE circles which is why they have the Community Reinvestment Act.  Also Black veterans weren't offered inexpensive real estate after the World Wars which helped whites to amass significant wealth today.  All these factors help explain the extreme imbalance of Black wealth in contrast to white wealth in our country.

Black towns like Greenwood, Rosewood, Ocala, and many others that became very successful upscale Black communities were burnt to the ground by whites or the residents driven away.  Much of Black wealth in land ownership and real estate was taken or residents paid to leave in ways that drastically undervalued their property.

Examples of this are like the Black community in Central Park called Seneca Village, or Manhattan Beach in CA which was taken by imminent domain according to widely reported accounts in media.  More extensively these patterns and practices are revealed in the media efforts related to Bloomberg's Greenwood Initiative.

Shockingly according to Bloomberg media properties about 98% of Black land wealth was lost by imminent domain takeover of their land or because of lack of wills and estate legal protection. And this isn't my sentiments this research was just spoken about by Bloomberg news with its Bloomberg's Greenwood inspired videos.

Furthermore, most Black business owners convey (80% of them surveyed) don't have access to capital - even with good credit.  These are reasons probably why Dr. Claude Anderson, says "Black Businesses get boycotted" by other businesses.

It has been widely reported that less than 1% of black businesses get angel investors, venture capitalists, or IPOs to scale their business. Black women get less than 1/2 of 1% of this type of capital.  What makes this even more ironic is Black women are becoming entrepreneurs at a higher rate than any other demographic in the US (and also are obtaining more education than most other demographics in the US).

This isn't just speaking off the cuff. This is research not anecdotical information.

You can find it on Google from reputable research groups.  Plus I added a number of resource material links throughout this article from reputable groups.

Some Black business advocacy groups claim Black dollars only circulate a few hours in our community, while other racial and ethnic groups circulate dollars in their communities for days, weeks, and even months.  While some might claim this isn't proven...

Think about it.   Who are Blacks spending most of their income with on a daily basis? Who are we paying crushing college debt (almost as much as mortgage debt now), mortgage debt, most of our food, utilities, buying 401Ks, stocks, clothing, medical insurance with in most cases?  And how many Black companies are we really spending our monthly income or money with on an ongoing basis?

Blacks through pension funds invest billions in local government and corporate organizations and rarely is this money even managed by Black companies (even with stellar track records of investing).  Blacks rarely get corporate or government contracts amassing into hundreds of billions of dollars in available sizable business deals.

These are issues often brought up on the digital media news source Roland Martin Unfiltered with his panel of experts and insightful thought leaders.

The Popular And Well Researched Digital Show
"Roland Martin Unfiltered," Covers Provocative
Issues On The Need To Support Black Business.
See A Short Video Example Below...

So my question to you is if we don't invest in our businesses who else is going to do it for us?  Even with the lack of capital and corporate contracts noted in this article, Black business is one of the largest employers of Black people in the US.

Imagine, If we had viable Black businesses in Black communities, rather than blighted economic areas or strips, how much would that add to Black property values in addition to creating jobs in our community?

The lack of Black businesses and economic success, as many research groups have claimed are systemic in banking, and also according to independent research in real estate, federal contracts, state contracts, investing and many other sectors needs immediate redress.  This redress needs to take many forms like:
  • Reparations
  • Investing In Black businesses
  • Pressuring Politicians to give Black businesses more government contracts
  • Expansion of supplier diversity in corporate America but...
But first we must support our own businesses.  How do we expect others to support our businesses if we don't support them and help them grow to scale?

While some Blacks feel the right reasons to consider supporting Black businesses are things talent, portfolio, knowledge, etc.   I feel the most salient issue is economic survival i.e. "by 2053" according to The Brookins Institute the median wealth of Blacks will be zero (0).

So again if other people are indifferent or antagonistic to Black business or economic development then we should proactively put our economic survival front and center...

To not do so is a luxury we cannot afford!

Moreover, some Blacks feel whites and other ethnic groups aren't plotting or sitting around thinking about boycotting Black businesses.  They feel Black businesses and wealth is marginalized by systemic racism and we shouldn't personally seek to respond by choosing Black businesses "based on hue."

I just don't get some Black's dismissive attitude that systemic racism isn't a valid cause to support and invest in our own businesses.

Personally I'm not so concerned about individual bias or indifference to Black economic development by other groups.  I don't give a crap about whether other ethnic groups dislike us personally, or are individually scheming to stop us.

The bigger issue to me is the systemic racism.  I am more concerned about the fact it can do much more devastating things to the Black community than the personal biased feelings of individuals within other racial and ethnic groups.

I feel this way because in effect they have systems in place to marginalize us economically on auto-pilot.

Lastly other ethic groups like latinos/x and certain Asian groups have felt the same way as me and other Black unity or collective economic groups. Other ethnic groups are collectively working towards and supporting their own economic development.

This is not a stereotype or urban legend.  In the Latino/x community they started a finance organization called Accion and in Indo-Asia regions also Grameen Bank (I wrote a book on this).

These ethnic finance and business development organizations supported their own businesses and economic development and grew to provide tens of billions of dollars each in finance to their communities and are now on a global scale.  However, it unfortunately is some Blacks who now give push back on Blacks supporting and investing in their businesses first (1st) and foremost.

The economic system has been rigged in the US (past and present) to offer less Black owned business options.  The insidious efforts have been brutal and vicious at times (i.e. Black Wall Street AKA Greenwood, Rosewood, and Ocala) and other times more subtle like redlining and predatory loans.

Whether brutal or subtle means were used both have been devastating in marginalizing Black business and wealth.  I've attempted to illustrate this broadly in this article.

We have to consciously work to build out our wealth including investing in strong Black business support.

Globally and locally and we still have to buy from others, where it makes sense.  However, I will look to support Black businesses and wealth creation 1st and even sometimes travel to other states to do so because if we don't do it who will?

Let's support each other more collectively in business and investments towards a more blessed and prosperous New Year.  Our collective economic fortunes certainly depend on it!

Writer's Bio:  Writer Kamau Austin, is the award winning Publisher of the Black News Scoop and Scoop Publications, a division of AMS Digital Media.  He is a long time activist, entrepreneur, and author.  Austin has been featured in Black Enterprise, Fortune Magazine Small Business, CNN, radio, cable, and countless newspapers and blog sites. 

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Posted by community events coordinator, Nzinga Lonstein Austin, is a prolific blogger who writes on the entertainment industry and issues for people with developmental and physical challenges.

She is presently in high school looking to have a career in video, film, and media. You can see more of her entertainment writing on Lonstein Movies.

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1 comment:

  1. Mr. Austin. This amazing and informational article, "Is Supporting Black Business Economic Survival Going Forward in 2022," speaks to the declining economic financial dilemmas African Americans are facing today in 2022! Yes, I strongly agree, as a people, we need to invest daily in Black businesses, especially real-estate driven properties: land, farming, construction and technology, plus put money back into our communities. Urgently, we have to build generational income and wealth, instead of generational debt and burdensome poverty.

    In the meantime, Your Tuesday essay is a must read! I am texting you ... Dr. George Fraser's YouTube video, "Black People are Heading Back into Slavery."

    Also, Mr. Austin, I enjoyed reading Black News Scoop's article, "Africa And The World Mourns Anti-apartheid Hero Desmond Tutu" By Afrikan Correspondent Thandisizwe Mgudlwa.

    Sincerely, Dr. Charles L. Singleton


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