BLACK LABOR-WHITE WEALTH

The Philadelphia Inquirer staff writer, Jerry W. Byrd, reports on June 26, 1995: Banding Together Is Way To Survival, A Black Author Says Claude Anderson Says Discrimination Against Black Businesses Is Historic. With The Decline Of Affirmative Action, Blacks Must Develop New Strategies, He Warns.

Black-owned businesses have never had an easy time of it. Often under- capitalized, usually under-patronized, even by their natural constituency, hundreds of them still managed to survive the Slave Codes, the Black Codes, anti-black riots in dozens of American cities, and torpedo legislation.

Maryland forbade black carpenters. Mississippi prohibited black printers and preachers. Georgia said no black pharmacists or mechanics. The District of Columbia, South Carolina and Kentucky would grant blacks no business licenses at all.

The social prohibitions were even harsher, designed to keep black Americans down while whites got free land, free or cheap labor and a government that worked for and in their interests. Claud Anderson, author of Black Labor, White Wealth: The Search for Economic Justice, can cite it all, chapter and verse.

He will grant, without too much prodding, that the laws put in place to help right 350 years of wrongs are virtually dead. Affirmative-action laws, he says, were effectively destroyed when the aggrieved party became, not African Americans but minorities, most of whom bore none of slavery's scars.

Anderson said the argument for righting wrongs was lost when African Americans forgot that oppressive laws applied to all of them, not to individuals.

"We should never have let ourselves be fooled into trying to prove individual cases of discrimination," he said. "You can't win when you try to do that. You can't win."

Anderson is on a mission. In Philadelphia last Thursday as a guest of the African American Chamber of Commerce, he repeated the message he lays out in his book: Black labor, in all its forms, is becoming obsolete.

Map of the percentage of black-owned businesses across the USA

Unless African Americans put together a coherent educational and economic strategy, they risk becoming a permanent underclass within 20 years, Anderson said. Black businesspeople will have to lead, he added.

Percentage of white owned businesses across the USA

Anderson, a former Commerce Department appointee in the Carter administration, is traveling the country to emphasize the warnings he makes in Black Labor, White Wealth.

He also is stumping for money, at least $250,000 by Aug. 1, to support a black think tank, the Harvest Institute, which opened in Washington last week.

"Conservatives have a hundred think tanks out there churning out racist reports on us, and you know those same people told me black folks would never support a project like this," Anderson said.

He said groups that survive through the next century will be self- supporting. "The new world order is about who controls resources," Anderson said. "We're the only group that doesn't have a strategy for economic survival."

At a luncheon in the Wyndham Franklin Plaza later in the day, Anderson, who holds a doctorate in education, confirmed what many among the 100 black business owners in attendance had quietly suspected.

"You must build an alternative economic and educational system as soon as you can," he said, jabbing his finger toward them. "For 400 years, we've been in the lowest levels of a real-life Monopoly game. You do not have enough wealth and power to be competitive. And time is running out on you."

Integration, the goal of so many civil-rights groups, isn't the answer, he said.

"Integration cut off the head of black people. The thinking part lives in the suburbs, while the body lives in the city. We're going to put both parts back together."

Anderson's book makes the same points in finer detail. He writes that the political climate will only grow worse.

But it's not all bad. "I'm deeply indebted to the right-wing movement, to (Senate Majority Leader Robert) Dole, (House Speaker Newt) Gingrich and the rest," Anderson said. "In my travels, I've never seen blacks more united." (source: Philadelphia Inquirer)

EXCERPTS FROM BLACK LABOR-WHITE WEALTH

Dr. Claude Anderson

"The root problem in black communities across America is race and the unjust distribution of our nation's wealth, power and resources. Whites live in privileged conditions, with nearly 100 percent ownership and control of the nations wealth, power, business and all levels of government support and resources." "Legal and extra-legal measures were taken to keep both free blacks, like the slaves, in a dependent state and excluded from enjoying the fruits of a nation that their labor was building." (p.11).

"…black conservatives who place their personal advancement above the welfare of their race often gain significant personal and financial benefits, recognition and access to power." (p.17)

"Free blacks were not permitted to establish culture-based businesses … Even after Emancipation, that remained the case. Blacks were prohibited by the legal and social sanctions that withheld capital, market opportunities, access to resources and education from establishing businesses. (pp.91-92).

In the concept of vertical integration, a single entity or group controls all aspects of the creation, and sale of a service or product, including obtaining the raw materials, processing and manufacturing, then distributing, marketing and selling the finished products… The Black community could adapt these concepts to the music and sports industries and thereby spread millions of dollars into black business throughout the nation." (p.208)

Claud Anderson in Baltimore, MD

"The Housing Crisis and African-American Wealth"

"The Drive for Economic Equality…Stuck in Neutral," by Christian Dorsey and James Lin:

The 40th anniversary of Dr. Martin Luther King’s assassination has caused many to ponder our progress in achieving his vision of economic equality. While income inequality between whites and blacks is a commonly referenced statistic, it tells an incomplete story. Wealth, or net worth, serves as a better indicator of a family’s ability to achieve economic security and upward economic mobility. When seen in this light, the gap between black and white is incredibly wide.

In 2004, blacks held $11,800 in net worth, or about 10% of the $118,300 held by whites (see Chart). When home equity is subtracted, blacks held, at the median, only $300 in net financial assets, or less than 1% of the $36,100 held by whites. Contrary to conventional wisdom, the picture has not improved in recent years. The wealth gap was narrowest in 1992, and even then, median total wealth for blacks was a mere 16% of their white counterparts.

It is unclear how the housing crisis will affect the wealth gap. However, with most black wealth concentrated in home equity, and with the disproportionate number of foreclosures in black households,1 the wealth divide may continue to widen. Four decades after Dr. King’s death, African Americans will have achieved little in the way of shared and equitable prosperity.

Policy makers can develop policies aimed at building wealth in low-wealth households to guard against income shortfalls and provide them with the means to invest in education and appreciating assets—keys to economic growth. Addressing the wealth gap directly will not only alleviate an acute symptom of racial inequality, it will better position the U.S. economy to reach its full potential. (Economic Policy Institute)

The importance of saving America's middle class has become part of the nation's dialogue, but as you point out, there isn't "one" middle class.

Oliver: People have talked about this a lot. There's a hollowing out of the middle of the class stratum in American society. There are more people who are doing quite well, and there are more people who are doing quite worse. There are fewer people in the middle than before. And it is this middle that keeps society going.

What characterizes a third-world country is extremes of rich and poor. America has always been a country with a strong middle class, and we're seeing that diminution. The black middle class has always been a very vulnerable group and when I talk about the three legged stool -- income, wealth and transfer payments -- they're not doing that well now. They didn't have a lot of wealth, and that's close to being gone. (source: Saint Louis Beacon)

From Oliver and Shapiro’s acclaimed book: Black Wealth, White Wealth: The relationship between residential segregation and the gross differential in Black Wealth and White Wealth.(Remember: Net Worth included all assets minus debts, including house you own and car, Net Financial Asset is the same without house and car)


"The Housing Crisis and African-American Wealth"

The Color Of Wealth: The Racial Wealth Divide

For every dollar owned by the average white family in the United States, the average family of color has less than a dime. Why do people of color have so little wealth? The Color of Wealth lays bare a dirty secret: for centuries, people of color have been barred by laws and by discrimination from participating in government wealth-building programs that benefit white Americans.

This accessible book—published in conjunction with one of the country’s leading economics education organizations—makes the case that until government policy tackles disparities in wealth, not just income, the United States will never have racial or economic justice.

Written by five leading experts on the racial wealth divide who recount the asset-building histories of Native Americans, Latinos, African Americans, Asian Americans, and European Americans, this book is a uniquely comprehensive multicultural history of American wealth. With its focus on public policies—how, for example, many post–World War II GI Bill programs helped whites only—The Color of Wealth is the first book to demonstrate the decisive influence of government on Americans’ net worth.

The authors are all part of United for a Fair Economy, a national nonpartisan organization based in Boston, Massachusetts, that campaigns against growing income- and wealth inequality and inspires action to reduce economic inequality.

The Color of Wealth co author Meizhu Lui

Median Wealth for Single African American Women at $5.00

Study finds median wealth for single black women at $5.00

Tuesday, March 09, 2010

By Tim Grant, Pittsburgh Post-Gazette

Women of all races bring home less income and own fewer assets, on average, than men of the same race, but for single black women the disparities are so overwhelmingly great that even in their prime working years their median wealth amounts to only $5.00.

In a groundbreaking report released Monday by a leading economic research group, social scientists turned a spotlight on the grave financial challenges facing an often overlooked group of women, many of whom could not take an unpaid sick day or repair a major appliance without going into debt.

"It's rather shocking," said Meizhu Lui, director of the Closing the Gap Initiative based in Oakland, Calif., who contributed to the report "Lifting as We Climb: Women of Color, Wealth and America's Future." (Read more: http://www.post-gazette.com/pg/10068/1041225-84.stm#ixzz1LFxNAKmq)

Among the most startling revelations in the wealth data is that while single white women in the prime of their working years (ages 36 to 49) have a median wealth of $42,600 (still only 61 percent of their single white male counterparts), the median wealth for single black women is only $5.

"Even for those of us who have been looking at the wealth gap for a while, we were shocked and amazed at how little women of color have," Ms. Lui said.

Researchers at the Insight Center for Community Economic Development, based in Oakland, Calif., analyzed data from the 2007 Survey of Consumer Finances, a voluminous report the Federal Reserve Board issues every three years that examines household finances in this country.

Wealth, or net worth, measures the total of one's assets -- cash in the bank, stocks, bonds and real estate; minus debts -- home mortgages, auto loans, credit cards and student loans. The most recent financial data was collected before the economic downturn, so the current numbers likely are worse now than at the time of the study.

Black women, in general, were more likely to have participated in the subprime loan crisis with upper-income black women being five times more likely to have received a high-cost mortgage than upper-income white men.

"The popular image is they spend too much, which is the reason they are running up credit card and consumer debt, but the cost of living has risen faster than income, and they need to go into debt for basic daily necessities," Ms. Lui said. "It's compounded because unemployment is twice as high in the black community than it is in the white community."

For all working-age black women 18 to 64, the financial picture is bleak. Their median household wealth is only $100.Hispanic women in that age group have a median wealth of $120.

"That means half of [black women] have a net worth of more than $100 and half have a net worth of less than $100," Ms. Lui said. "So that gives you an idea of how far in debt some women of color are."

Married or cohabitating white women have a median wealth of $167,500. Married or cohabitating black women have a median net worth of $31,500.

The reasons behind the daunting financial challenges black women face are numerous and complex.

"There are excuses and circumstances that have evolved in society, which put black women where they are," said Esther Bush, executive director of the Urban League of Greater Pittsburgh, who said in Pittsburgh more than 70 percent of African-American families are headed by single women.

The recession has hit single mothers especially hard.

According to a recent report by the Institute for Women's Policy Research and the Women and Girls Foundation of Southwest Pennsylvania, more than four out of 10 families headed by single mothers in Pittsburgh and more than one in three in Pennsylvania, live in poverty.

In Pittsburgh and across the country, the financial burdens of single parenthood fall mostly on women, but black women are more likely to endure the work and responsibility of raising children on their own. They are more likely to be the backbone of their families and communities, with greater responsibilities to support struggling friends and families.

In a 2008 study of black women and their money, the ING Foundation found that black women -- who frequently manage the assets of their households -- financially support friends, family and their houses of worship to a much greater degree than the general population.

They also are more likely to be employed in jobs and industries -- such as service occupations -- with lower pay and less access to health insurance. And when their working days are done, they rely most heavily on Social Security because they are less likely to have personal savings, retirement accounts or company pensions. Their Social Security benefits are likely to be lower, too, because of their low earnings.

Rather than strictly comparing income, researchers in the Insight study looked at the wealth gap. The current economic crisis has shown that a person's wealth affects not only retirement security, but also a person's ability to handle financial setbacks such as a job loss or a health emergency.

High unemployment and high incarceration rates for black men also lower the likelihood of single black women finding a partner to help build a more secure financial future.

Ms. Lui said the Insight report would be used to encourage the government to close the wealth gap and improve the outlook for women of color, just as it did for Americans who received land through the Homestead Act, and education through the GI bill.

"If wealth was based on hard work, African-Americans would be the wealthiest people in our nation," she said. "It's not about behavior. It's about government policies. Who does the government help and who is it not helping?

"Our government knows how to build wealth for people. They've done it for others and they can do it for all of us. They need to focus some attention on women of color. Look at the situation and see what we need." (Read more: http://www.post-gazette.com/pg/10068/1041225-84.stm#ixzz1LFxfWv7J)