ETHNICITY, Black ownership of wealth
Cynthia has a quote that says, of the entire pie of U.S. wealth, Blacks own 0.5%. This is the same percentage as in 1865.
posted by Carl Nyberg at
6:05 PM
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It was little less than 15 years ago that Dr. Claud Anderson,
former Assistant Secretary of the U.S. Department of Commerce (now President of The Harvest Institute, a black research, education and advocacy organization) wrote:
“Though black Americans reside in the richest nation on earth, their standard of living is comparable to that of a Third World nation. Blacks own and control less than two percent of the wealth, power and resources of the nation, so they have little control over their lives and the conditions in which they are forced to live.” --- Black Labor, White Wealth : The Search for Power and Economic Justice by Claud Anderson.
I also own a copy of Powernomics, which is billed as a continuation of Black Labor, White Wealth. While provocative in its recommendations, there is, in my opinion, an element that is lacking in terms of practicality. Anderson is firmly opposed to the formation of coalitions between blacks and the more financially resourceful liberal interests, an establishment that he feels ultimately co-opts the primary thrust toward effecting change. Yet, he seems to think that some sort of salvation rests from within an ethnic monolith that is comparatively bankrupt.
Blacks indeed stand relatively powerless in terms of the current demographic and societal conditions in the United States. In addition, there are developments in the emerging global competitive sphere which, “...will either catapult individuals, companies, communities and countries into (even greater) prosperity, or relegate them to (even greater) poverty, obscurity and extinction”. There is no time, in my opinion, to focus or give weight to what in essence are illusory goals.
Recnt remarks by Federal Reserve Vice Chairman Roger W. Ferguson, Jr. at the commemoration of Black History Month (February 24, 2006) more or less highlight what are the relevent issues.
...the linkage between education and economic opportunity is typically measured by the relationship between education and earnings.
Earnings are an important measure of one's success in the labor market, but broader measures of income and ultimately net worth are even more significant yardsticks for gauging the financial health of households.
The Federal Reserve's Survey of Consumer Finances, which collects data every three years on the balance sheets of American families, provides comprehensive information on household income, assets, and liabilities (see: Brian K. Bucks., Arthur B. Kennickell, and Kevin B. Moore, "Recent Changes in U.S. Family Finances: Evidence from the 2001 and 2004 Survey of Consumer Finances (444 KB PDF)," Federal Reserve Bulletin, February 2006).
Data from the most recent survey show that, from 2001 to 2004, real (or inflation-adjusted) family income was little changed for both African American and (non-Hispanic) white households. And the gap between median incomes for the two groups remained quite large.
Specifically, the median income of black households was about $29,000--only 58 percent of the median for white households.
The gap was somewhat narrower among households headed by an individual with a college degree; median income for African American households in this group was close to $54,000, which is 75 percent of the median for whites.
Although black households have gained ground over the past decade, income inequality continues to be a concern. Lower income makes it more difficult for black families to acquire assets and to create wealth.
The 2004 results show that economic progress for blacks, as measured by real net worth, has been substantial over the fifteen years that the surveys have been conducted.
(Still) Real median net worth for African-American households in 2004, at $20,400, was more than three and one-half times as great as it was in 1989. That said, the wealth gap between blacks and whites, whose median real net worth stood at $140,700 in 2004, remains sizable (approx 7X).
A substantial part of the wealth gap between black and white families is associated with their ownership of assets.
Although the racial wealth gap is significant at the top of the wealth distribution, a more important difference is that a much greater proportion of African-American families than whites have zero or near-zero real net worth.
The increase in ownership of nonfinancial assets for black households in recent years occurred primarily in residences, other real estate, and privately held businesses.
Because none of these types of assets is owned by a large share of black families, any wealth gains arising from them will not be widely distributed across black families.
...an important consideration in terms of wealth creation is the amount of equity that families have in their homes--that is the difference between the value of the home and any debt secured by it.
Over the most recent survey period, during which property values have risen rapidly, the median value of home equity for African-American homeowners increased an impressive 24 percent.
Business ownership, too, remains an important avenue of wealth creation for African Americans. The median net worth of black families with business assets was about $174,000 in 2004, a level more than eight times the median net worth for all black families.
Furthermore, the survey results show far less inequality in median net worth and income between black and white business owners than between black and white families overall.
All told, the findings from our most recent survey, along with the other trends discussed earlier, highlight noticeable gains in the economic well-being of African Americans. However, they also clearly show that much more needs to be accomplished.
Education is believed to be the key to further progress.
By
Anonymous, at 8:49 AM, March 28, 2006
What form should reparations take?
Who should pay? Who should get the reparations?
crome_dome, why don't you consider Cynthia a credible source? Because she's a blogger? Because she's related to Chris Welch?
I did miss Saviour's Day. If you give me the date I'll put it in my PDA.
I used to believe education was the key to uplifting people. But when I went to the Philippines I met many people who were well educated, but poor.
And it's pretty common for families to have at least one person who is working a job significantly below their education level.
By
Carl Nyberg, at 11:28 AM, March 28, 2006
Carl: Just like you, I used to believe education was the key too. However, many of the Africans that come to this country are well educated and many are driving cabs or doing other menial jobs.
I just wanted to say, there are some thing that I disagree with Claud Anderson, but the basic premise behind his argument I think is true.
FYI: From what I heard on the Cliff Kelly Show, I think they are more in line with that Covenant With Black America piece that is going around.
By
Anonymous, at 12:45 PM, March 28, 2006
Things are getting better for African Americans since Clinton's welfare reform. That was the best piece of legislation for African Americans since the 60's.
By
Anonymous, at 7:06 PM, March 29, 2006
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