REMEMBERING THE MILLIONS THE AMERICAN DREAM LEFT BEHIND
By Phillip Jackson
Wednesday, September 10, 2008.
A report by the Heartland Alliance confirms what much of black America already knows: Black America is in serious trouble economically, and many black people are living in "deep poverty."
Black people in America are not just poor by American standards; many of us are "third-world" poor.
While some economists praise the American economy with talk of low unemployment, record housing starts and a booming gross national product, none of this tells the real story of a quickly declining black economy within America. For instance, 30 percent of black Americans in Illinois live in poverty compared with only 8 percent of white Americans.
According to the Children's Defense Fund, nearly one million black children in the United States are living in extreme poverty. While the official national unemployment rate is 4.4 percent, the official unemployment rate for blacks is 10 percent. Of course, the official unemployment rate does not include people who have given up looking for work and those who are underemployed. In 2003 in New York City, 48.2 percent of black men ages 16 to 64 were officially unemployed!
As American cities become more expensive to live in, black people, with our declining wealth, are forced by economics to leave these cities. Although things might be good economically in America, the majority of black people are living through their worst economic depression since slavery!
Ironically, even as black people earn more money in the United States, the wealth gap between blacks and whites grows dramatically. Misery indices in the Black community -- poor and useless educational preparation, mass unemployment, low-quality housing stock, disintegrating communities, and failing families -- are rising. According to a 2004 study by the Pew Hispanic Trust, between 1996 and 2002, the median net worth of blacks dropped by 16 percent.
Black net worth declined to a paltry $5,998 per household, while the net worth for white households grew by 17 percent during the same period to $88,651. Twenty percent of black median net worth was in cash, approximately $1,200, with the balance comprised of home equity. The housing foreclosure crisis of the past eight years has caused Black America to lose between $72 billion and $93 billion in housing-equity wealth.
"Black families lost 25 percent of their wealth during the jobless recovery from the recent recession," said Thomas Shapiro, a Brandeis University professor of law and social policy.
This means that more black people are struggling in 2006 with such basic conditions as securing employment, paying rent or a mortgage, paying utilities and insurance, obtaining affordable health coverage and buying food.
Shapiro also stated that only 26 percent of black families could survive more than three months after a major income interruption. The other 74 percent would be forced to seek government assistance, dip deep into savings, sell off assets, relocate with a friend or relative, file bankruptcy or become homeless!
In this economic depression, college is an unaffordable luxury for many black people. 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 are closing or have already closed.
Generational poverty is inextricably intertwined with race. Hope for breaking the poverty cycle diminishes and another generation of the impoverished is born. Many blacks in America are slipping from poverty to deep poverty into a third-world status.
Black American families cannot wait for the government to save us. Annually, black Americans generate about $700 billion within the U.S. economy. However, a 2005 report by the Target Market Group shows that we don't use our dollars wisely to improve our plight in America.
For example, in 2004, we had collective purchases that included $22 billion for clothes, $10.7 billion for furniture, $28.7 billion for cars, $14 billion for phone service, $3.7 billion for consumer electronics (not computers) and $2.3 billion on alcoholic beverages.
Unfortunately, the only area where we showed restraint in our spending was on books, where we spent only $257 million, down from $303 million in 2002. We spent more on our fingernails and our hair -- $6.3 billion on personal care -- than on books and reading materials.
We must take control of our economic destinies to improve black personal finances, our family wealth and our community economies, and to help lift many blacks out of deep poverty.
TEN KEY SOLUTIONS FOR BLACK ECONOMIC WELL-BEING:
1. Start your own business. By starting your own business, you can hire family, friends, and community members.
2. Get as much education as you can.
3. Stop renting an apartment. Save enough money to make a down payment on a house. Then buy a house.
4. Open savings accounts for your children, teach your children the value of money and take personal finance classes.
5. 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 global stock markets.
6. Manage your credit carefully and avoid unnecessary debt.
7. 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 fiscal realities.
8. Create a living strategy that includes good nutrition, plenty of exercise and proper rest so that you can share your good fortune in a long and healthy life. Health is wealth!
9. Contribute to your faith-based institution or invest in a social cause.
10. Create a will to pass on your accumulated wealth.
Phillip Jackson is founder and executve director of the Black Star Project in Chicago, Illinois. You can reach him at 773.285.9600 and at email@example.com
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