Blacks are in a state of economic emergency!
Forty years ago, the National Urban League published the first edition of its State of Black America report. The report introduced serious consideration of the socioeconomic and social political issues facing African Americans into the national discourse.
Published in 1976, schools had been legally desegregated for 22 years, the Civil Rights Act of 1965 had been in effect for 11 years, and the economy had been in a year of economic recovery from the recession that lasted from November 1973 to March 1975.
Blacks were nearly twice as likely as whites to be unemployed, the median household had just 59 cents for every dollar of white household income, and African Americans were three times more likely to live in poverty than whites.
To go back further and add the statistic provided by the elder statesman on the black economy, Claude Anderson, at the end of slavery in 1876, blacks owned less than one-half of one percent of the total wealth of the US. That figure has remained the same. to this day nearly 150 years later.
General wealth and so-called purchasing power is the focus of our talk today.
The 40-year comparison of the National Urban Leagues from 1976 to 2016 comes as no surprise or surprise to many in the Black community, despite having a Black family in the White House for the last 8 years. The New York Times in 1976 published an article titled “Distress Signal”, reporting on the first edition of the National Urban Leagues State of Black America.
The Times article said at the time: “Beyond the statistics it contains, grim enough in themselves, the report dramatizes a substantial failure of political leadership.” This is what we have to discuss as well to move forward.
The median income for a black family in 1976 was $9,242 and for a white family it was $15,537. In 2016, the median black family earns approximately $35,481 compared to the median white family nationwide at $59,622.
In terms of people living below the poverty line, blacks were 29.4% in 1976 compared to whites at 9.1% in 1976. In 2016 blacks are 27% in poverty who lives below that line, whites are in the top 10%. The unemployment rate for blacks in 1976 was 13.2%, for whites 7%. Today, they say black unemployment averages 9.6% with whites at 4.8%. Homeownership for blacks was 43.7% compared to whites at 67.6%. Due to the recent 2008 recession, blacks were hit hardest in this very important category.
The average American has most of their wealth in their home, so this aspect is critical. Today, black home ownership is 43% and white home ownership is 72.6%. There are other statistics that you can check at http://soba.iamempowered.com/2016-executive-summary.
As we can see from this study, not much has changed economically for blacks in forty years in a row! There are some exceptions, of course. We have many black families earning over $35k. We have many examples of athletes, artists, and personalities who have high-paying jobs. The problem is that there are far more of us living and trapped at or just above the poverty line. The New York Times in 1976 called all of this a “substantial failure of political leadership.” I would have to partially agree with that for those times and today. The problem is in the midst of all these depressing statistics somehow black people as a group are spending over 1 trillion dollars a year on stuff! How can this be possible?! I’m pretty sure the white media published this statistic and it was picked up by the black media and spread throughout the black community. Sounds good and impressive. “Blacks predicted to have $1.1 trillion in purchasing power by 2015.” The comparison of the so-called “purchasing power” with other economies in the world. This would be a fair comparison if blacks in America were truly in lockstep in their spending, as a nation moving as one, taking responsibility for every aspect of our spending. Converting that so-called “purchasing power” into real economic power in politics, agriculture nationally and community by community, building the necessary institutions, owning property and businesses in our own communities, banking, etc.
I began to feel like the $1 trillion expense item was a calling card for other businesses, if they didn’t already know about the “buying power” of the black community. What else could it have been. The economic state of black Americans, as well as blacks throughout the diaspora, is in a dire state of emergency! We have the statistics! I have studied part of the breakdown of where the money was spent. Outside of general living expenses, we’re buying clothes like “The Lifestyle of the Rich and Famous.” Black people are the number 1 consumers of alcohol according to the study and, on the contrary, we love and spend a lot on entertainment. We have no ownership in most of this designated spending, and we do little in not producing. The way the trillion is spent is the equivalent of a rapper with the newest Jordans, tens of thousands of jewels with overpriced booze bottles just throwing loads of money at the strip club right after we get paid. No savings, no investments. No property, no business, no child safety. No real solid plan for economic freedom. Just spending. Actually, the rapper may have his finances in order, savings, 401k, college funds, home ownership, investments. He may have only set aside a small amount just for the club, to create the illusion of wealth to attract more business. If this is true, he would be doing much better than the black collective, basically throwing away billions of dollars every year with no real ROI.
While I do agree that there has been a general failure in the handling of black people, not only by politicians, but also by the US government in general. There are things that could be done now, with what we have, that could turn the tide economically. There are factors that can be applied to our $1 trillion economy that could prepare us to build, grow and sustain an economic platform that will last for generations to come! These same factors can and should be applied to your personal finance fist, your home finances that is your business. Are you running your household finances like a trip to the strip club? There are six principles for living financially that can sustain you as a family. I’ll cover them in a bit more detail in later posts, so stay tuned.