After the release of my article on May 24th entitled “Broken Dreams and Financial Illusions: The Secret Depression of Black Men”, several people commented about the need for more solutions. The fact that the piece has been shared more than 23,000 times on Facebook alone confirms that this is a serious issue in our communities.
The responses and messages that I have received from men and women across the country have been overwhelming. The consequences of decades of economic marginality go beyond what meets the eye. It cuts deep beneath the surface. The pressure and frustration that people are feeling are very real.
We have to be honest about our economic situation in order to generate the kind of attention, energy, and focus needed to address it. No amount Instagram flauging can override the actual wealth data that encapsulates our situation in hard numbers. As racial wealth gap guru Antonio Moore reported in a Newsmax article, the median Black family is worth $1,700. We can’t address the problems in a collective manner until we are honest about our situation.
This is not an all-encompassing set of recommendations, but rather a mix of policy, personal, and community actions that can help to move us forward. A somewhat broad overview of some important topics is listed below. More in-depth inquiries into each of these topics will be forthcoming in future articles.
Encourage Flexible Credit Requirements for Homeownership
Homeownership has historically been one of the key wealth building vehicles in American society. The intentional efforts of the Federal Housing Administration to cut off avenues of home purchasing, restrict areas where Blacks could buy, and subsidize the development of Whites-only communities has contributed enormously to the racial wealth gap that we see today.
One of the biggest barriers to homeownership today for Blacks is inflexible credit requirements for reasonable interest rates on home mortgages. A more flexible credit evaluation that takes other measures into account would responsibly expand access to homeownership for millions of Americans. The numbers suggest Blacks are much less likely to have any reserve funds available in the case of an emergency. Most are living paycheck to paycheck. Thus, when the inevitable “rainy days” come their credit is likely to be adversely affected.
The report entitled “A Policy Agenda for Closing the Racial Wealth Gap” recommended the use of “alternative credit models rather than relying on the exclusive use of FICO scores for homeownership credit assessments.” The models use “use alternative risk profiles such as rent, childcare, utilities, and medical care to better understand a client’s risk-taking behavior.”
Contracts and Workforce Participation
The area with arguably the greatest level of potential for the expansion of large scale economic opportunity is public sector contracts and development initiatives. Public entities spend billions of dollars a year on different projects and services. There should be a renewed focus on how these dollars are distributed. Communities should be asking what percentage of public contracts in the city go to Black-owned companies? What percentage of the workforce is Black for the companies that get the contracts? How does that match up with the percentage of Blacks in the area?
You have to have data in order to address this issue. Elected officials should use their leverage to assist in the acquisition and promotion of this data. The percentage of Blacks who get contracts and who get jobs on publicly funded projects does not even come close to the percentage of the Black population in most cities. This must be addressed if the beleaguered economic predicament of communities of color is to change.
Focus Buying Power and Partner on Entrepreneurial Ventures
Channeling our buying power will also be a key to increasing economic opportunity. The Obama administration closed out its tenure with 75 consecutive months of private sector job growth. Employment opportunities in the private sector are likely to continue to grow in comparison to public sector jobs due to the $3.6 trillion in budget cuts proposed by the Trump administration over the next decade. This increases the importance of organizing around corporate diversity practices. A resurgence of the Southern Christian Leadership Conference’s (SCLC) Operation Breadbasket model that included don’t buy campaigns, leafleting, picketing, demonstration, and negation with private industry.
It will also be necessary to increase our partnerships with each other in the area of entrepreneurship. The general lack of access to capital in Black communities serves as a deterrent for many from attempting to start business enterprises and engaging in entrepreneurial pursuits. It will be necessary to expand our tradition of making a lot out of a little and finding creative ways to sustain and excel.
Many successful business owners will often tell grand stories about how their success is attributable to their business acumen and expertise. The story that they seldom tell is exactly how they get the initial capital to launch their businesses.
Blacks are much less likely to be able to call upon family members to gift them the substantial amount of money that is often required to start and sustain successful businesses. The lack of familial wealth causes some to garner the initial capital to operate businesses by any means necessary. We must find multiple means to pool our resources to build an independent economic base. Some models that have shown some success are co-ops and small business incubators.
The unintended consequence of integration was the death of many Black-owned businesses. Blacks began to patronize White-owned establishments more frequently after the barriers were lifted, but it was not reciprocated by Whites for the most part. The Black community relinquished a great deal of their economic empowerment and autonomy as we were more integrated in American society. In retrospect, a more balanced approach that didn’t include a large scale abandonment of Black businesses and institutions would have been more prudent.
Let us learn from the failures and successes of the past to lay the foundation for the long-term contributions to a more vibrant and potent economic base where people feel like they have to capitulate to injustice and inequity to survive financially.
Increase Financial Literacy
Increasing our level of financial literacy can only help our predicament. I admittedly had a low level of financial literacy, which contributed to the deepening of some financial holes. Unfortunately, basic principles of financial literacy like the impact of credit, investing in the stock market, retirement funds, etc. are not taught in schools on a broad level. We should push for this to be added to the school curriculum and to be emphasized with families and communities.
It must be emphasized, however, that financial literacy alone is not an adequate solution to economic marginalization. It is one piece of a much larger set of policies and practices that should be revamped. Contrary to popular belief, studies show that Blacks actually save at a higher rate than their White counterparts. It is other factors like inheritance, money transfers, and other unearned benefits that made the bulk of the difference. Economists have estimated that up to eighty percent of the wealth that is accumulated during a lifetime can be directly attributed to past generations (inheritances, transfers, etc.)
Avoid Huge College Debt If You Can
I ran up a tremendous amount of debt in the process of getting my Ph.D. Because of this, I want to caution people to avoid huge student loan debt if you can. The need for people to obtain a post-secondary education of some kind is abundantly clear. Most of the new jobs that will be created will require some kind of higher education. It is imperative, however, for those considering higher education opportunities to investigate a multitude of different options to get that additional schooling and take cost into account.
We cannot continue to make the mistake of majoring in anything and blindly going into enormous amounts of debt, assuming that we will get some lucrative opportunity to pay that debt off in the future. Thousands of college students are graduating and either finding themselves unemployed or severely underemployed. This is especially true for Blacks and Hispanics who are twice as likely to be unemployed and stay jobless for longer periods of time. Additionally, empirical studies have shown that applicants with white sounding names are 50% more likely to get call backs for interviews than applicants with black sounding names.
We also cannot ignore the demands of the labor market when selecting a major. We need to be realistic about the kind of opportunities are likely to be available when we graduate with a degree in a particular field. Too many of us are deluded into believing that there will be an economic “yellow brick road” laid out for us when we graduate. This leads to major disappointment and huge student loan bills.
Push for Immediate Record Expungement
Too many people are prevented from employment opportunities because of a nonviolent offense in their past. Even after they have served their time, they are still on punishment. A biased policing practice that heavily surveils and criminalizes Black men has led to a permanent disadvantage when seeking employment.
The disclosure of a prior criminal record is a disqualifying factor in many cases that even immigrants who come from other countries in search of work don’t have to contend with. It is simply not fair to continue to punish an individual who may have served time for a petty drug charge after they have already served their debt to society. There should be a push for legislation to be passed to remove the shackles from these individuals so that they can be freed from an additional barrier that may prevent them from being economically viable.
A more immediate step that can be taken while the longer criminal justice policy reform battles are being waged is the banning of the box on employment applications to prevent employers from considering a person’s criminal history until after an offer has been made. Localities can follow the example of cities like Austin, Texas who have put “ban the box” measures in place. Some progress is better than no progress.
Finally, it is important to value and appreciate who and what you do have. The struggle and pressure of everyday life can be suffocating. It has the capacity to destroy the self-esteem of some and crush the aspirations of others.
Dr. Martin Luther King Jr. who lead the charge for the passage of monumental civil rights legislation also gave us an internal charge that is still relevant today: “Believe in yourself and believe that you are somebody......Nobody else can do this for us, no document can do this for us…..If the Negro is the be free he must move down into the inner resources of his own soul and sign with a pen in the ink of self asserted manhood his own Emancipation Proclamation…..Don’t let anybody take your manhood.”
Marcus Bright, Ph.D. is a Scholar and Activist