Wednesday, July 27, 2022

Does Addressing The Racial Wealth Gap Demand A HIGHER Consciousness Of Woke Financial Literacy?

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Why In A World Of Systemic Racism Financial Literacy Requires A HIGHGER Woke Level Of Consciousness To Be Truly Empowering

By Kamau Austin, Publisher Scoop Publications

In June, 2022 a compelling meme circulated on Facebook alluding to the 400-year head start whites have over Blacks in the US economic system.  It was ironic in that it was being shared in a Black group on a social media platform with a leaning towards conservative "pull yourself up by your own bootstraps" types.  You know the types - they regurgitate the usual ole tropes about Blacks.

This Meme On Social Media ignited negative tropes about Black people. 

For instance the following are some stereotypical tropes perpetuated by Black conservatives or financial coaches about the lack of Black financial success:
  • Blacks can't achieve financial literacy because we're trying to achieve acceptance with consumerism.
  • Blacks don't achieve wealth because we don't understand investments and buy real estate.
  • Blacks aren't knowledgeable or disciplined in terms of credit. 
These tropes, while having some truthful claims about some Blacks, puts the onus of the present inequality in wealth concentration between whites and Blacks squarely on clueless or undisciplined African Americans.  These stereotypes side step the fact Blacks, in the past and presently, are fighting systemic economic racism, marginalized business ownership, and industry isolation.

It should be obvious individuals can't beat systems by themselves so financial literacy should evolve beyond just having insights on getting a mortgage, Debt to Income (DTI) ratios, and investing in stocks and bonds.  Financial literacy for Blacks should also extend to new technical tools, political, social, and economic advocacy to gain more economic empowerment and collective wealth creation.  Let's review a small synopsis of systemic racism in the past and in more present times that contributes to the lack of Black wealth.  Let's touch on some solutions beyond the typical ones floated to develop more Black wealth... 

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Topics Discussed:
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  •     New NCAA Ruling that allows Black Student-Athletes to Get Paid
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  •     Age Comparison of Black Millionaires
  •     Chances of Becoming a Black Millionaire
  •     Other Races Prospering in America
  •     White Supremacy and White Dominance 
  •     Rich Black Men Marrying White Women
  •     Black Student Loan Debt
  •     Black Business Success/Failure
  •     The Real “BIG LIE” in America
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Article On A HIGHER Woke Level Of Financial Literacy Continues Below...

It is hard to catch-up in the race for wealth when - even today, the average white high school graduate and also high school drop-outs makes more income than Black college graduates.  Plus Black college grads accrue more debt paying for their education.

Rolling Out quotes a study from The New School.  It claims "A comprehensive study completed by researchers at the New School titled “Umbrellas Don’t Make it Rain: Why Studying and Working Hard Isn’t Enough for Black Americans” is debunking the myth that "classism is the new racism."  The research comes to a shocking conclusion for many African Americans and others of color: the average white high school drop out earns more than the average Black college graduate."

There is over an annual $20,000 difference between Black family and white family income.  For instance according to Pew Research "As of 2020, black families have a median household income of just over $41,000, whereas white families have a median household income of more than $70,000."

What are some of the reasons for this wealth disparity?  Obvious reasons for the wealth discrepancy is hundreds of years of slavery, share cropping, and Jim Crow discrimination.  But there are also less known racial procedures and reasons.

Like how white veterans were given access to capital to buy homes after WW2, that wasn't given to Black veterans.  Moreover, whites were given large amounts of land in the US that is now worth billions.

Blacks until very recently didn't receive reparations.  Actually, some whites where given reparations for slavery in the past.  This is because Blacks were considered property and that whites with warped reasoning were losing their income and perceived human property.  The isolated reparations given today are very limited to some small counties and mainline churches in the US.

Blacks even with credit scores as good as whites were ironically targeted with predatory loans. Prosperous Black towns like Greenwood AKA Black Wall Street,  were burnt to the ground, residents terrorized, property taken, or killed in places like Detroit, Ocoee, Florida, and St. Louis. Cities even used eminent domain laws to displace Blacks from high value real estate in Manhattan Beach, California, and also Central Park, New York.

Blacks pay hundreds of billions of dollars in taxes a year but less than 2% get Federal government contracts.  Blacks with corporate and government jobs pay in the neighborhood of a hundred billion dollars in investments like 401Ks and pension plans but less than 1.5% of Blacks get access to capital from angel investors or more importantly venture capital firms that use pension fund money.

And I haven't even mentioned robbing Black banks like the Freedman Bank.  There are today 2.6 million Black businesses but over 90% are sole proprietorships with no employees.  Most Black businesses like small businesses complain it is hard to get access to capital.

In the history of the stock market only 13 Black companies have ever gone public. Today only 8 Black businesses have gone public out of 3,671 or only 0.22% according to a report by Investopedia. 

Presently, only 43% of Blacks own a home (down from 50% before 2008).  Furthermore, the real estate of Black homeowners is often devalued by an average of $48,000 a unit in comparison to similar white owned real estate compounding to a $156 billion dollar shortfall in wealth or equity according to research from the Brookins Institute.

In other RE studies like an undercover study in Long Island, New York, by Newsday newspaper: Blacks are still 
discriminated against in buying real estate.  Note this is even in a northern area like Long Island, New York.

So no way is there an even playing field when it comes to starting small businesses or buying real estate in the US to help build wealth. That's a myth.

This has contributed to a wealth gap where whites have about 8 to 10 times the wealth of Blacks (depending on the study).  For instance a headline on the Forbes website posted on June 18th, 2021 by Palash Ghosh, featured a headline "Black Americans Earn 30% Less Than White Americans, While Black Households Have Just One-Eighth Wealth Of White Households."  I've read white wealth in the US is over $103 trillion dollars while Black wealth is a few trillion.

And now very successful Blacks with advanced degrees can't buy homes because in part they have high student loan debt.  This is the situation after selling us the dream that going to college was the pathway to financial success.

It seems to me financial literacy for Blacks has to go beyond saving and investing in the stock market. It is to realize the systemic marginalization of Blacks economically in this country and to collectively work together to build viable Black businesses with involvement with crowd equity funding, supporting Black banks, starting Black stock markets and utilizing smart technology tools like The Good Stewart (TGS financial system).

Sure there is an increasing number of Black billionaires and millionaires.  There are about seven (7) billionaires and about a million Black families with a net worth of a million dollars.  However, this is a very small percentage of Black people who have this affluence.  There are presently over 15 million Black families in the US (about 41 million Black people).

However, our mindset and strategies are changing. For example in NYC we decided to start voting in people committed to economic development for Black people. One Black construction firm got a contract for $30 million dollars another got a contract for tens of millions of dollars rebuilding our 2 major NYC airports.

This is a Black business that got amongst other things a $30 million dollar construction contract to rebuild one of the large NYC airports. This happened because Black activists and media like ours pushed politicians to give Black companies major contracts.

Former Mayor Maynard Jackson, did a similar thing in Atlanta and that is why in ATL you have a large successful number of Black businesses.  There is even in Chicago, a Black stock market called the Dream Exchange emerging.

With Blacks having less than 4% wealth in the US shouldn't we be primarily concerned with our ethnic group getting economic opportunities?  This is essential especially since our communities have been abused and economically marginalized for 400 years?

For far too long we've often enriched everyone else but ourselves.  And new insights, attitudes, and tools can help us turn the tide away from poverty.

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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