by Kenny Anderson
In his final speech, April 3, 1968, a day before his political assassination, at the Mason Temple Church in Memphis, Tennessee, Martin Luther King stated: “We must begin the process of building a greater economic base in Negro communities.” Indeed this was a clear leadership directive to initiate Black economic development by establishing businesses.
For the most part as Black people we have never or barely associated Martin Luther King’s leadership with economic development other than Affirmative Action. We don’t associate him with confronting economic injustice, economic boycotts, struggling for economic justice, and particularly advocating for Black business development.
What we know of King has been reduced to his "I Have A Dream" speech, but what we don’t know is that this speech was connected to his main theme of ‘the March on Washington for Jobs and Freedom’.
King’s speech and overall leadership was never about civil rights alone, but was also about from the beginning a campaign for jobs and income, because King understood that economic injustice prevents ‘real freedom’ and was the most crucial issue that Black people would continue to face.
Throughout the civil rights movement, King and other Black activists had always been engaged with economic issues, from using economic tactics like the Montgomery bus boycott and the boycotts of places like Woolworth's that accompanied the lunch counter sit-ins. King stressed the connection between racism and economic injustice: “Many white Americans of good will have never connected bigotry with economic exploitation. They have deplored prejudice, but tolerated or ignored economic injustice. But the Negro knows that these two evils have a malignant kinship.”
King would often reiterate that economic advocacy and development is a crucial part of our struggle against racial oppression. King began to focus more strongly on economic justice issues in the last few years of his life because even with so-called civil rights Black people were still at the bottom of the economic ladder. King once remarked: “What benefits is civil rights to a Negro to be able to go into an integrated restaurant, yet he does not have a job to afford a hamburger.”
It is obvious as Black people we’ve abandoned King’s legacy by ‘neglecting’ and ‘failing’ to follow through on his final economic directive to us. Yes, it is crystal-clear that we did not follow King’s order, we’ve ignored him to the fullest. Yes, the overwhelming majority of Blacks today live in neighborhoods dominated by non-Black ethnic national businesses that make billions of dollars off us.
King not only gave us an economic directive, he threw down an economic gauntlet, telling us: “American Negroes have greater economic potential than most of the nations – perhaps even more than all of the nations of Africa. The Negro challenge in America is to organize the economic power we already have in our midst.” Today Black people have nearly a trillion dollars in our mist.
According to a September 2011 Report, ‘The state of the African-American Consumer’, published jointly by Nielsen and the National Newspaper Publishers Association (NNPA), cites with a buying power of nearly $1 trillion annually, if African-Americans were a nation, they’d be the 16th largest purchasing power (GDP) nation in the world; a greater GDP than the current 16th rank nation of Turkey.
Over 40 years-ago, long before this 2011 report on Black purchasing power, King stated: “Always anchor our external direct action with the power of economic withdrawal. Now, we are poor people, individually, we are poor when you compare us with white society in America. We are poor. Never stop and forget that collectively, that means all of us together, collectively we are richer than all the nations in the world, with the exception of nine. Did you ever think about that? After you leave the United States, Soviet Russia, Great Britain, West Germany, France, and I could name the others, the Negro collectively is richer than most nations of the world. We have an annual income of thirty billion dollars a year, which is more than all of the exports of the United States, and more than the national budget of Canada. Did you know that? That’s power right there, if we know how to pool it.”
Though we have nearly a trillion dollars of purchasing power in our midst, we as Black people our a national body of economically colonized consumers, who spend only 2 cents of every dollar with Black businesses of the nearly trillion we spend, 98 cents goes to create economic development and wealth for non-Blacks.
There are over 42 million Blacks in America that have more purchasing power than 72 million Turks. As Blacks let us take a look at the nation of Turkey who we rank over economically. Turkey has the 16th largest GDP, that Merrill Lynch, the World Bank, and The Economist magazine describe as a newly industrialized country with an emerging market economy.
Turkey is among the world's leading producers of agricultural products; textiles; motor vehicles, ships, and other transportation equipment; construction materials; consumer electronics and home appliances.
Turkey is the world's largest producer of hazelnut, cherry, fig, apricot, quince, and pomegranate; the second largest producer of watermelon, cucumber, and chickpea; the third largest producer of tomato, eggplant, green pepper, lentil, and pistachio; the fourth largest producer of onion and olive; the fifth largest producer of sugar beet; the sixth largest producer of tobacco, tea, and apple; the seventh largest producer of cotton and barley; the eighth largest producer of almond; the ninth largest producer of wheat, rye, and grapefruit, and the tenth largest producer of lemon.
Turkey’s livestock products, including meat, milk, wool, and eggs, contributed to more than ⅓ of the value of agricultural output. Fishing is another important part of the economy; in 2005 Turkish fisheries harvested 545,673 tons of fish and aquaculture. Turkish brands like BEKO and Vestel are among the largest producers of consumer electronics and home appliances in Europe.
Turkey's Vestel Electronics is the largest TV producer in Europe, accounting for 21% of all TV sets manufactured and sold on the continent in 2007. By January 2005, Vestel and its rival Turkish electronics and white goods brand BEKO accounted for more than half of all TV sets manufactured in Europe. Another Turkish electronics brand, Profilo-Telra, was Europe's third largest TV producer in 2005.
Turkish companies made clothing exports worth $13.98 billion in 2006; more than $10.67 billion of which (76.33%) were made to the EU member states. Turkish automotive companies like TEMSA, Otokar, and BMC are among the world's largest van, bus, and truck manufacturers.
Turkey has a large and growing automotive industry, which produced 1,024,987 motor vehicles in 2006, ranking as the 7th largest automotive producer in Europe; behind Germany (5,819,614), France (3,174,260), Spain (2,770,435), the United Kingdom (1,648,388), Russia (1,508,358) and Italy (1,211,594), respectively.
In 2008 Turkey produced 1,147,110 motor vehicles, ranking as the 6th largest producer in Europe (behind the United Kingdom and above Italy) and the 15th largest producer in the world. With a cluster of car-makers and parts suppliers, the Turkish automotive sector has become an integral part of the global network of production bases, exporting over $22,944,000,000 worth of motor vehicles and components in 2008.
Turkey is also one of the leading shipbuilding nations; in 2007 Turkish shipyards ranked 4th in the world (behind China, South Korea, and Japan) in terms of the number of ordered ships, and also 4th in the world (behind Italy, USA, and Canada) in terms of the number of ordered mega yachts.
What stands out glaringly about the Gross Domestic Product (GDP) of Turkey and Black people, is theirs is based on production output, while ours is based on total expenditure in buying – consuming products. Turkey’s GDP is expressed in business – manufacturing and production, creating jobs and wealth for their nation; while Black dollars buy consumer goods that we don’t manufacture or produce. Blacks spend billion of dollars on clothes, shoes, jewelry, hair styles, food, cell phones, and entertainment.
While Blacks are spending nearly a trillion dollars, yet in too many Black communities unemployment and poverty levels are soaring over 50 percent. Unfortunately Blacks have a spending spree outlook and very little of our purchasing power is transferred into investment capital to fund business development. We buy from the world, but we don’t produce or sell to the world like Turkey.
This economic suicide mentality coupled with racism reflects why there are so few Black owned businesses in our communities. Commenting on this underdevelopment King stated: “The economic highway to power has very few entry lanes for Negroes. Nothing so vividly reveals the crushing impact of discrimination and the heritage of exclusion as the limited dimensions of Negro business in the most powerful economy in the world. America’s industrial production is half of the world’s total, and within it the production of Negro business is so small that it can scarcely be measured on any defineable scale.”
The fact that Black people have purchasing power of nearly a trillion dollars that overwhelmingly goes to others on one hand is embarrassing, but it can also be very misleading regarding the racial disparities of wealth in America. In a recent study, ‘The Great Recession’, by the Economic Policy Institute, exposed that the recent recession period Blacks had an annual income of $13,400 compared to whites income of over a $134,000.00.
The EPI study states in terms of dollars – Blacks have 2 cents compared to whites 98 cents. A Black World study reports during this recessionary period that 25% of Blacks lost their homes and 38% have lost their jobs. Anothern recent wealth gap study by the Pew Research Center, reveals that the median wealth of whites in 2009 was $113,149.00 compared with $5,677.00 for Blacks.
According to the Pew Research the wealth gap between whites and Blacks have grown to their widest levels in 25 years. Leaving whites on average with 20 times the net worth of Blacks. As Blacks we cannot continue to participate in so-called American democracy just as oppressed and exploited nearly trillion dollar consumers.
Our current plight during this recession in America demands a program for economic empowerment as King advised us: “One point in the Negro’s program should be a plan to improve his own economic lot. Through the establishment of credit unions, savings and loan associations, and cooperative enterprises the Negron can greatly improve his economic status. He must develop habits of thrift and techniques of wise investment. He must not wait for the end of the segregation that lies at the basis of his economic deprivation; he must act now to lift himself by his own bootstraps.”
Wednesday, November 30, 2011
Wednesday, July 27, 2011
Wealth Gaps Between Whites and Minorities Widest Levels in 25 Years
The wealth gaps between whites and minorities have grown to their widest levels in a quarter-century. The recession and uneven recovery have erased decades of minority gains, leaving whites on average with 20 times the net worth of blacks and 18 times that of Hispanics, according to an analysis of new Census data.
The analysis shows the racial and ethnic impact of the economic meltdown, which ravaged housing values and sent unemployment soaring. It offers the most direct government evidence yet of the disparity between predominantly younger minorities whose main asset is their home and older whites who are more likely to have 401(k) retirement accounts or other stock holdings.
"What's pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African-Americans who bought homes in the last decade – because that was the American dream – are seeing big declines," said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in income inequality.
The median wealth of white U.S. households in 2009 was $113,149, compared with $6,325 for Hispanics and $5,677 for blacks, according to the analysis released Tuesday by the Pew Research Center. Those ratios, roughly 20 to 1 for blacks and 18 to 1 for Hispanics, far exceed the low mark of 7 to 1 for both groups reached in 1995, when the nation's economic expansion lifted many low-income groups to the middle class.
The white-black wealth gap is also the widest since the census began tracking such data in 1984, when the ratio was roughly 12 to 1. "I am afraid that this pushes us back to what the Kerner Commission characterized as `two societies, separate and unequal,'" said Roderick Harrison, a former chief of racial statistics at the Census Bureau, referring to the 1960s presidential commission that examined U.S. race relations. "The great difference is that the second society has now become both black and Hispanic."
Stock holdings play an important role in the economic well-being of white households. Stock funds, IRA and Keogh accounts as well as 401(k) and savings accounts were responsible for 28 percent of whites' net worth, compared with 19 percent for blacks and 15 percent for Hispanics.
According to the Pew study, the housing boom of the early to mid-2000s boosted the wealth of Hispanics in particular, who were disproportionately employed in the thriving construction industry. Hispanics also were more likely to live and buy homes in states such as California, Florida, Nevada and Arizona, which were in the forefront of the real estate bubble, enjoying early gains in home values.
But those gains quickly shriveled in the housing bust. After reaching a median wealth of $18,359 in 2005, the wealth of Hispanics – who derived nearly two-thirds of their net worth from home equity – declined by 66 percent by 2009. Among blacks, who now have the highest unemployment rate at 16.2 percent, their household wealth fell 53 percent from $12,124 to $5,677.
In contrast, the median household wealth of whites dipped a modest 16 percent from $134,992 to $113,149, cushioned in part by a stock market recovery that began in mid-2009. "The findings are a reminder – if one was needed – of what a large share of blacks and Hispanics live on the economic margins," said Paul Taylor, director of Pew Social & Demographic Trends. "When the economy tanked, they're the groups that took the heaviest blows."
The latest data come as President Barack Obama and congressional leaders try to reach a deal to avoid a U.S. default on its financial obligations after Aug. 2. Democrats and Republicans have been wrangling over proposals that could cut trillions of dollars from programs such as Medicare and Social Security; they are divided over whether to bring in new tax revenue, such as by closing corporate tax loopholes or increasing taxes for the wealthy.
The NAACP and other black groups urged Obama to resist deep cuts to housing assistance or safety net programs, saying it would disproportionately hurt urban areas with high poverty and unemployment. The U.S. poverty rate currently stands at 14.3 percent, with the ranks of the working-age poor at the highest level since the 1960s. Some analysts believe the poverty rate will climb higher when new figures are released in September.
"Typically in recessions, minorities suffer from being last hired and first fired. They are likely to lose jobs more rapidly at the beginning of the recession, and are far slower to gain jobs as the economy recovers," said Harrison, who is now a sociologist at Howard University. "One suspects that blacks who lost jobs in the recession, or who have tried to help family members or relatives who did, have now spent whatever savings or other cashable assets they had."
Other findings:
*About 35 percent of black households and 31 percent of Hispanic households had zero or negative net worth in 2009, compared with 15 percent of white households. In 2005, the comparable shares were 29 percent for blacks, 23 percent for Hispanics and 11 percent for whites.
*Asians lost their top ranking to whites in median household wealth, dropping from $168,103 in 2005 to $78,066 in 2009. Like Hispanics, many Asians were concentrated in states like California hit hard by the housing downturn. More recent arrivals of new Asian immigrants, who tend to be poor, also pushed down their median wealth.
*Across all race and ethnic groups, the wealth gap between rich and poor widened. The share of wealth held by the top 10 percent of U.S. households increased from 49 percent in 2005 to 56 percent in 2009. The threshold for entry into the wealthiest top 10 percent, however, dipped lower: from $646,327 in 2005 to $598,435.
The numbers are based on the Census Bureau's Survey of Income and Program Participation, which sampled more than 36,000 households on wealth from September-December 2009. Census first began publishing wealth data from this survey, broken down by race and ethnicity in 1984.
The analysis shows the racial and ethnic impact of the economic meltdown, which ravaged housing values and sent unemployment soaring. It offers the most direct government evidence yet of the disparity between predominantly younger minorities whose main asset is their home and older whites who are more likely to have 401(k) retirement accounts or other stock holdings.
"What's pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African-Americans who bought homes in the last decade – because that was the American dream – are seeing big declines," said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in income inequality.
The median wealth of white U.S. households in 2009 was $113,149, compared with $6,325 for Hispanics and $5,677 for blacks, according to the analysis released Tuesday by the Pew Research Center. Those ratios, roughly 20 to 1 for blacks and 18 to 1 for Hispanics, far exceed the low mark of 7 to 1 for both groups reached in 1995, when the nation's economic expansion lifted many low-income groups to the middle class.
The white-black wealth gap is also the widest since the census began tracking such data in 1984, when the ratio was roughly 12 to 1. "I am afraid that this pushes us back to what the Kerner Commission characterized as `two societies, separate and unequal,'" said Roderick Harrison, a former chief of racial statistics at the Census Bureau, referring to the 1960s presidential commission that examined U.S. race relations. "The great difference is that the second society has now become both black and Hispanic."
Stock holdings play an important role in the economic well-being of white households. Stock funds, IRA and Keogh accounts as well as 401(k) and savings accounts were responsible for 28 percent of whites' net worth, compared with 19 percent for blacks and 15 percent for Hispanics.
According to the Pew study, the housing boom of the early to mid-2000s boosted the wealth of Hispanics in particular, who were disproportionately employed in the thriving construction industry. Hispanics also were more likely to live and buy homes in states such as California, Florida, Nevada and Arizona, which were in the forefront of the real estate bubble, enjoying early gains in home values.
But those gains quickly shriveled in the housing bust. After reaching a median wealth of $18,359 in 2005, the wealth of Hispanics – who derived nearly two-thirds of their net worth from home equity – declined by 66 percent by 2009. Among blacks, who now have the highest unemployment rate at 16.2 percent, their household wealth fell 53 percent from $12,124 to $5,677.
In contrast, the median household wealth of whites dipped a modest 16 percent from $134,992 to $113,149, cushioned in part by a stock market recovery that began in mid-2009. "The findings are a reminder – if one was needed – of what a large share of blacks and Hispanics live on the economic margins," said Paul Taylor, director of Pew Social & Demographic Trends. "When the economy tanked, they're the groups that took the heaviest blows."
The latest data come as President Barack Obama and congressional leaders try to reach a deal to avoid a U.S. default on its financial obligations after Aug. 2. Democrats and Republicans have been wrangling over proposals that could cut trillions of dollars from programs such as Medicare and Social Security; they are divided over whether to bring in new tax revenue, such as by closing corporate tax loopholes or increasing taxes for the wealthy.
The NAACP and other black groups urged Obama to resist deep cuts to housing assistance or safety net programs, saying it would disproportionately hurt urban areas with high poverty and unemployment. The U.S. poverty rate currently stands at 14.3 percent, with the ranks of the working-age poor at the highest level since the 1960s. Some analysts believe the poverty rate will climb higher when new figures are released in September.
"Typically in recessions, minorities suffer from being last hired and first fired. They are likely to lose jobs more rapidly at the beginning of the recession, and are far slower to gain jobs as the economy recovers," said Harrison, who is now a sociologist at Howard University. "One suspects that blacks who lost jobs in the recession, or who have tried to help family members or relatives who did, have now spent whatever savings or other cashable assets they had."
Other findings:
*About 35 percent of black households and 31 percent of Hispanic households had zero or negative net worth in 2009, compared with 15 percent of white households. In 2005, the comparable shares were 29 percent for blacks, 23 percent for Hispanics and 11 percent for whites.
*Asians lost their top ranking to whites in median household wealth, dropping from $168,103 in 2005 to $78,066 in 2009. Like Hispanics, many Asians were concentrated in states like California hit hard by the housing downturn. More recent arrivals of new Asian immigrants, who tend to be poor, also pushed down their median wealth.
*Across all race and ethnic groups, the wealth gap between rich and poor widened. The share of wealth held by the top 10 percent of U.S. households increased from 49 percent in 2005 to 56 percent in 2009. The threshold for entry into the wealthiest top 10 percent, however, dipped lower: from $646,327 in 2005 to $598,435.
The numbers are based on the Census Bureau's Survey of Income and Program Participation, which sampled more than 36,000 households on wealth from September-December 2009. Census first began publishing wealth data from this survey, broken down by race and ethnicity in 1984.
Black Economic Gains Wiped Out During ‘The Great Recession 2007 - 2009
Before the recession hit in 2008, millions of African Americans had found their way out of poverty and into the middle class. After the recession, many of them have been knocked right back to where they came from.
Black unemployment stands at a staggering 16.2 percent after the latest economic report, and even more stunning has been the disappearance of decades of wealth creation through the value of home ownership.
“For me to live that life we were so comfortable in, we never had to worry about finances, we always had money where I can help my kids and my grandchildren — to go to calling my daughter to borrow $100 because I can’t pay a bill …” said Deborah Goldring, as she described to USA Today how her family has been hit by this recession.
Economists say that the Great Recession lasted from 2007 to 2009. According to the Economic Policy Institute, median net worth of white households was $134,280, compared to just $13,450 for African Americans.
By 2007, African Americans went from having a net worth that was 1/10 that of whites to having a net worth that was 1/97th of white Americans.
Algernon Austin, director of the EPI’s Program on Race, Ethnicity and the Economy, said the following: “In 2009, for every dollar of wealth the average white household had, black households only had two cents.”
Since the start of the recession, overall unemployment has dropped from 9.4 percent to 9.1 percent, while black unemployment has risen from 14.7 percent to 16.2 percent. From my perspective the recession is not over for black folks says Austin.
Austin argues that even for educated African Americans, who face discrimination in the workplace, drops in wealth and employment opportunities will continue. He also cites the fact that African Americans are over represented in government jobs, which are going to be cut in the near future as the government deals with a massive budget deficit.
Discrimination plays a role in the outcomes on the job market as well. A 2003 study at The University of Chicago showed that whites with felony records were more likely to get callbacks than black applicants without criminal records.
Some civil rights leadership have claimed that a lack of targeted policy on behalf of Washington politicians has led to the wealth gap increasing over the last three years. They also argue that dealing with hiring discrimination and supporting urban businesses can go a long way toward correcting the imbalance.
To date, the Obama Administration and Congress have made no mention of targeted policy to deal with racial gaps in economic outcomes.
Black unemployment stands at a staggering 16.2 percent after the latest economic report, and even more stunning has been the disappearance of decades of wealth creation through the value of home ownership.
“For me to live that life we were so comfortable in, we never had to worry about finances, we always had money where I can help my kids and my grandchildren — to go to calling my daughter to borrow $100 because I can’t pay a bill …” said Deborah Goldring, as she described to USA Today how her family has been hit by this recession.
Economists say that the Great Recession lasted from 2007 to 2009. According to the Economic Policy Institute, median net worth of white households was $134,280, compared to just $13,450 for African Americans.
By 2007, African Americans went from having a net worth that was 1/10 that of whites to having a net worth that was 1/97th of white Americans.
Algernon Austin, director of the EPI’s Program on Race, Ethnicity and the Economy, said the following: “In 2009, for every dollar of wealth the average white household had, black households only had two cents.”
Since the start of the recession, overall unemployment has dropped from 9.4 percent to 9.1 percent, while black unemployment has risen from 14.7 percent to 16.2 percent. From my perspective the recession is not over for black folks says Austin.
Austin argues that even for educated African Americans, who face discrimination in the workplace, drops in wealth and employment opportunities will continue. He also cites the fact that African Americans are over represented in government jobs, which are going to be cut in the near future as the government deals with a massive budget deficit.
Discrimination plays a role in the outcomes on the job market as well. A 2003 study at The University of Chicago showed that whites with felony records were more likely to get callbacks than black applicants without criminal records.
Some civil rights leadership have claimed that a lack of targeted policy on behalf of Washington politicians has led to the wealth gap increasing over the last three years. They also argue that dealing with hiring discrimination and supporting urban businesses can go a long way toward correcting the imbalance.
To date, the Obama Administration and Congress have made no mention of targeted policy to deal with racial gaps in economic outcomes.
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