All Articles Tagged "african american income"
by Randy Williams
As recent data has shown, the net worth of Whites is now about 20 times that of African-Americans. Between 2005 and 2009 the household wealth of African-Americans fell a staggering 53%. Maybe more detailed numbers will put the canyon that is the Black wealth gap in greater perspective: The average White household in the United States has $113,149 in wealth while the average Black household has only $5,677. In spite of what the statistics say, closing the wealth gap is still possible, but several changes must be made in order for this to happen. Here are seven words that can completely transform the economic outlook for African-Americans.
Collaboration – How can one of the most imitated and influential cultures ever suffer from such drastic economic frailty? Historically, our culture is one that stresses individuality and harbors a “I-have-mine-now-you-get-yours” mentality that has weakened black families for decades. As studies have shown, Black families have very few resources individually; however, by pooling our resources together we dramatically increase the power of our communities. Essentially, this power can then be used to build businesses, promote social interests and lessen the individual burdens that many of us face. Collaboration also becomes a breeding ground for new ideas and concepts that were previously unavailable. Studies predict that by the year 2013, the spending power of African-Americans is expected to reach $1.2 trillion, proving that together we are a force to be reckoned with.
The dwindling wealth of black families is very real. Marketwatch highlighted this issue recently pointing out that the recession has hit black families harder than other racial groups. Median household income for blacks fell 7.2% from 2007 to 2009, as compared to 4.2% decline for whites or the 4.9% drop in Hispanics’ income, according to the Census Bureau. In addition, the Marketwatch report points out that “the typical black family had about three times as much wealth in 1983 than it did in 2009 — $6,300 in inflation-adjusted terms in 1983 compared with just $2,200 in 2009.”
Why is it that, with more opportunities and with the technology revolution, has our wealth dwindled?Part of the reason is that Blacks didn’t take advantage of the home ownership. After peaking near 50% in 2004, the ownership rate for blacks fell to 47% by the time the bubble burst in 2006, according to the Census Bureau. Couple that with the fact that those who did own their homes were most susceptible to sub-prime mortgage loans and predatory lending. The lack of wealth puts each generation in a deficit of sorts. With children of these families having to take out bigger student loans than their counterparts, they graduate with more pressure and more debt that they will hope to reconcile by the time they have kids.
But it’s not all bleak, depending on how you look at it. ABC news released its own report, asserting that the number of black-owned businesses in the U.S. increased by 60.5% to 1.9 million between 2002 and 2007, more than triple the national rate according to U.S. Census data released Tuesday. The number of businesses across the country increased by 18% in the same amount of time.How is it that we own more businesses but cannot claim more wealth? The business activity may be there but we can’t assess how well those businesses are being run.
To read more, check out Marketwatch