(ThyBlackMan.com) There are numerous books, journals, articles, and theories that speak of the economic woes of African Americans and the means to overcome them. There is an emergence of self-help manuals created by African Americans that provide step-by-step guidance to achieve economic prosperity. Though I applaud the effort of these concerned entrepreneurs, the instructions leave out the hardships of ownership and the characteristics of hard work, self-motivation, endurance, ambition, ingenuity, and accountability entrepreneurs possess.
If government officials truly wanted the population to be financially savvy they would provide mandatory classes to create a financially responsible and literate public. However, such lessons may not be that beneficial, since our government has a horrendous record of financial irresponsibility. With that said, here are the 13 reasons most African Americans will never get their financial houses in order.
- EVERY GENERATION STARTS FROM SCRATCH
There is a myth circulating amongst blacks that all white people have it easy and mommy and daddy paid for everything, which is false. A large portion of the white population are poor and disenfranchised just like blacks. The majority of so-called middle class whites are burdened by debt to maintain the illusion of financial stability. Though some with the means do ease the financial pressure of the future generation through financial sacrifice. One can blame socio-economic factors that have resulted in the conditions of Blacks in America. Though, at some point, we must take responsibility for our lack of research and sacrifice for the financial future of the next generation. I have heard numerous stories from financial planners about blacks who have made enormous amounts of money only to squander it on mindless consumption leaving, their offspring with nothing. Failure to build wealth leaves the next generation with an inheritance of debt (student loans, funeral expenses, unpaid mortgage) having to start from scratch themselves. Blacks who are fortunate enough to graduate college are usually at a financial disadvantage to their fellow citizens, due to accumulation of debt, because of the absence, of financial assistance from family. Anyone familiar with student loans and credit card debt, coupled with basic living expenses cannot compete with someone entering the workforce without debt.
- BEING A LOAN OFFICER TO FAMILY AND FRIENDS
Unfortunately for too many African Americans, upon “making it” they miraculously turn into loan officers. Everyone wants to borrow money and the newly appointed loan officer is pressured into complying. The people who are borrowing money fail to realize you’re not making that much money as they think. Also you have your own bills coupled with student loans. Here is my theory of loaning money. If a person borrows $ 500 they really need $1,000. The $500 for what they needed and the $500 to pay you back. If they don’t have $500 where are they going to get $1,000? If you want to donate money feel free, but stop deceiving yourself as if the loan will be returned because 99% of the time it is not.
- FINANCIAL ILLITERACY
Sit back and think, who the ever told you about money? Our understanding of wealth has come from the capitalist media, which professes consumerism is the key demonstration of wealth. This ideology has resulted in a culture that believes untamed consumerism is a demonstration of one’s wealth. This illusion of financial progression leaves too many in the African American community broke with luxury items. Spending money does not make you wealthy. Terminology such as Annuities, FICO Score, Escrow, Fixed Rate Mortgage, Interest Rate, Certified Deposits, Money Markets, Interest, Compound Interest, Full or Term Life Insurance, Standard Deduction are terms never uttered in the African American household. If you would like to familiarize yourself with financial terminology a good free resource is Investopedia.com .
- LABORER, STAFF, MANAGER, EMPLOYEE=FIXED INCOME
Despite feel-good stories from “financial gurus” who provide tactics for financial independence and accumulation of millions, the majority of African Americans will be employees and remain employees until they are no longer employable. Since the emergence of corporations and Industrial Revolution, wealthy entrepreneurs and speculators needed a controlled labor force. There are different levels of labor ranging from unskilled labor to managerial positions. Despite society’s varying levels of praise for different occupations, employees for the most part are dependent on one stream of income. After taxes and health care employees are left with a fraction of their income as disposable income. This dependence on one stream of income is key hindrance in the financial freedom African Americans aspire to. The 9-5 was never designed to provide the population with the financial freedom so often mentioned in expensive financial improvement materials. Some critics of the American workforce may refer to employees as wage slaves, similar to indentured servants of the colonial period. I feel that categorization to be both harsh and misleading. Though employees do trade their most important asset, time, for financial compensation that for most is not sufficient for their basic necessities.
- BALLERS ( BROKE WITH THINGS)
Anyone who grew up in an African American community knows we equate wealth with what a person drives or wears. We have heard the mantra before, “Mike is doing good man, saw him the other day in a Mercedes.” Mike works at a 9-5, on fixed income, and is paying a monstrous car payment that is eating up majority of his paycheck. Despite Mike’s fancy car, big mortgage, nice threads, Mike is living paycheck to paycheck, and if he was terminated from his job Mike would be on the street. Ballers are broke, because they spend all their money balling. Once their money stops flowing the game is over. If you are making $60,000 a year you have no business in a luxury car or wearing luxury items. Sorry to burst your bubble. Listen to a rap song bragging about balling and add the cost of the activities and purchases up and you will see not even the rapper can afford the fantasy he speaks of.
- CIVIL RIGHTS ACT OF 1964
“We Shall Overcome….. Yeah Someday…”
The integration of Americans has been devastating to the economic situation of African Americans. Despite the eloquent chapters in history books and emotional documentaries shown in high schools, this act has destroyed black colleges and black entrepreneurship. Prior to integration, the majority of skilled blacks attended all-black colleges because they had no choice. Blacks purchased and received services from black-owned groceries, clothing, electronic, butcher, pharmacies, physicians, law firms, banks, theaters, hotels, restaurants, and hardware stores for they had no choice. The money was spent within the community and redistributed amongst blacks by employing blacks and spending gained income amongst blacks. Now all those resources are spent with owners from outside of the community who do not live or spend money in the community. The most talented scholars and athletes who once flooded the campuses of HBCUs are now attending Stanford and Yale, working for Morgan Stanley, no longer playing in the Negro Leagues but Major Leagues.
African Americans are huge consumers of expensive electronic devices. Ironically these companies’ workforces have very few African Americans, mainly due to the exploitation of foreign labor in third world countries.
Technology not only depletes your mental capability (how many phone numbers do you remember?), it also makes much needed jobs obsolete. Since the 1970s wages have basically frozen while living expenses have skyrocketed. Industries have utilized technology to do away with human labor. Numerous jobs available to humans are soon to be extinct, leaving numerous unskilled and skilled citizens permanently unemployed. Numerous cities are mere artifacts of their once thriving industrial economies. Cities like Detroit and Camden use to be hotbeds of production but are, now dens of crime and hopelessness. This trend will continue to emerge across America as more jobs are eliminated due to the rise of automation and robots. “Please use the self-checkout line over there, miss. Thank you.”
- CHURCH TAX ALSO KNOWN AS TITHES
Church members, through the use of fear and guilt, are manipulated into paying a 10 percent membership fee to fund the lifestyle of their usually unemployed leader. This 10 percent is added to the mandatory state taxes they have to pay, leaving many people with less than 60 cents for every dollar they make. If the almighty God wants to get something done I am pretty sure he can get it done without your much-needed money. Modern churches are not only in the business of saving souls, but investment banking. Promising their sheep immense returns on their investments.
What church members don’t realize is regardless of what you pay, you will not receive your financial blessing. The pastor’s blessing comes from your weekly donation that pays his bills, while no one is donating to you to pay your bills.
- NOT SUPPORTING BLACK OWNED BUSINESSES
The people extracting money from the black community have a much more advanced, understanding of group economics than that of present day African Americans. You find a diverse group of people pooling their resources with the goal of financial progression. While they work diligently to provide goods and service to African Americans, African Americans work diligently to spend their pay checks with them. African Americans will purchase chips from a Puerto Rican- owned bodega, rent from a Jewish landlord, get nails done by a Korean, purchase clothes and electronics form a Middle Easterner, and buy pizza from an Italian. The problem is none of these races purchase products or services from African Americans. Wealth is leaving the community while none is coming in.
- CORPORATE AMERICA’S RACISM AND NEPOTISM
Regardless of the alleged progress some say blacks have achieved in America, the inequality in salary still keeps the wealth gap growing between white and blacks. One must also acknowledge the human trait of nepotism, which keeps many blacks from reaching positions of power in corporations. It would be illogical to believe people are going to assist you before they assist their own. If you had your own business and your child was in need of employment, despite their lack of qualification, would you employ your child or a stranger? So why are African Americans so shocked at the discriminatory hiring practices of companies owned by those of European descent?
Marketers manipulate Americans to feel insecure which heightens the possibility that they will purchase a product to remedy their insecurity. African American insecurity is both financial and psychological. It comes with the burden of being black in America where everything equated with your being is “sub-human.” To compensate, many blacks turn to consumerism to remedy the insecurity and uncomfortableness they feel being Black in America. African Americans feel they can purchase their way into a prejudice free zone, where white Americans will accept them as equals. Many have tried all have failed.
The problem with the accumulation of debt is the rapid accumulation. Anyone who has experienced debt knows things can quickly get out of hand. The jeans purchased on sale for $50 can easily turn into a credit card payment of $227. Debt is nothing unique to Americans for we are debt-enslaved society. The African American experience with debt is actually more pleasant than that of white Americans for melanin seems to be a wonderful deterrent for financial institutions offering credit. Though I believe if we were given the same amount of credit as our Caucasian brethren our financial situation would be much worse.
- CONSUMER CULTURE AND CONSPICUOUS CONSUMPTION
Americans are constantly bombarded all day every day, by persuasive advertising tactics professing that one’s self-worth rests in the attainment of material goods. These goods are supposed to increase one’s happiness and status in society, while also increasing the citizen’s debt to financial institutions. The majority of African Americans unfortunately believe this mantra that they have been trained to believe, leaving them on the never-ending cycle of working and spending.
“Conspicuous consumption” is a term coined by economist Thorstein Veblen (Theory of the Leisure Class) that basically states citizens are praised for wasting money, purchasing items not for their usefulness but as a means to demonstrate one’s wealth. One example is the purchase of a luxury vehicle. People need a car to travel but the luxury car is supposed to demonstrate one’s purchasing power. The wealthy can play this game due to their income but, when the employee does, he usually ends up broke. He who has the most toys is the coolest and usually the “brokest.”
Staff Writer; Linton Hinds Jr.
Official website; http://Livity.info/