Welcome to America, where Black Americans are more likely to be under-educated, unemployed and imprisoned than their White peers; where Black Americans, in general, have significantly less wealth, dramatically lower-quality housing, much poorer nutrition and sub-standard medical care. This is an America where Black people remain relatively silent while these conditions and a raging economic genocide, eliminates them, their children and their grandchildren from ever participating in the American mainstream!
Recent economic, wealth and employment reports confirm what much of Black America already knows: We are in serious TROUBLE and multitudes of Black people exist in deep poverty. Many Black people in America are not just poor by American standards; many of us are third-world poor. Black Americans are in an economic free-fall with no fiscal backstop. Many Black Americans will live their entire lives without ever having a positive net worth. Most Black people today who work are like “sharecroppers”, men and families who did most or all of the work on a farm, but seldom earned enough to pay their debts and never owned anything of value.
While many economists praise the American economy with talk of low unemployment, record- housing starts and a booming GNP (gross national product), none of this tells the real story of the devastated Black economy within America. Recent data from the Pew Research Center shows the median wealth of Black households dropped an astonishing 34 percent from 2010 to 2013 while that of White households grew, albeit slightly, over that same period.
Pew’s research shows that when automobiles and other durable goods are included, the net worth of White families was $141,900 in 2013 while the net worth of Black families that year fell to $11,000, down from $19,000 in 2007. This means that two years ago White families had 13 times the wealth of Black families in America, a 24-year high for the wealth gap.
But it gets much worse! When you remove vehicles and other durables from the equation, according to New York University economist Edward Wolff, the median Black family worth is just $1,700 (while 40 percent of Black families have zero or negative wealth). The median White family worth (without durable goods) is roughly 69 times more than that of Black families, or about $116,800.
And worst of all, the sad reality is that liquid wealth is largely non-existent within Black families. Liquid wealth is the money used to pay bills, buy food, pay the rent and cover emergency situations. In 2011, the Center for Global Policy Solutions in a report entitled Beyond Broke, showed the median liquid wealth of Black Americans as only $200, compared to $23,000 held by Whites.
More than $100 billion might have been extracted from Black American communities during the recent recession according to a report by the Center for Responsible Lending, Foreclosures by Race and Ethnicity. That money left the bank accounts, housing accounts and pockets of Black people and went somewhere else. While few people are searching for where that $100 billion went, it is almost certain that it will never come back to those Black families. This economic carnage of the Black American economy constitutes a kind of “financial rape” of the African American community, similar to the devastating effects of colonization to the African continent. Black Americans might never recover. Never!
Higher education, once the reliable key to moving from low-income to middle-income status, is no longer an option. The portals that lead away from poverty, crime and despair have closed tight. Generational poverty is inextricably intertwined with race. Hope for breaking the poverty cycle diminishes as generations of Black children are born into inescapable poverty. Many more Blacks in America are slipping into a third-world status—from poverty to deep poverty.
Black America cannot wait for the government, foundations and universities to save us. Annually, Black Americans generate about $1 trillion within the U.S. economy. We must take control of our financial resources and improve Black personal finances, our family wealth and our communities’ economies. Although life might be good economically in America, the majority of Black Americans are living through the worst economic conditions in modern history!
TEN KEY SOLUTIONS FOR BLACK ECONOMIC WELL-BEING:
- Start your own business. By starting your own business, you can hire family, friends and community members.
- Get as much formal education as you can. It usually translates into higher income.
3. Stop renting an apartment. Save enough money to make a down payment on a house. Then buy a house.
4. Get married! Two-person-headed households are more viable economically. Marriage can be an economic advantage when both parties are aligned on financial priorities and share similar fiscal visions.
- Open savings accounts for your children, teach your children the value of money and have them take personal finance classes.
6. First, invest your money and your time in your skills, your knowledge base and your self-improvement. Second, learn how to let big companies work for you rather than you only working for them through stock ownership. And third, invest your money in the U.S. and other global stock markets.
7. Manage your credit carefully and avoid unnecessary debt.
8. Create a living strategy that includes good nutrition, plenty of exercise and proper rest so that you might live a long and healthy life. Health is wealth!
9. Contribute to your faith-based institution and invest in a social organization or social cause.
10. Create a will or trust to pass on your accumulated wealth.
Phillip Jackson is founder and executive director of The Black Star Project in Chicago. You may reach him at 773.285.9600 or by e-mail at firstname.lastname@example.org.