Tag Archives: White Privilege

Systemic Racism and Unconscious Bias in America

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“I look to a day when people will not be judged by the color of their skin, but by the content of their character.” Reverend Dr. Martin Luther King, Jr., “I have a dream speech”

Over the past centuries, Americans have permitted systemic racism and unconscious bias to affect how an entire race and class of people are mistreated – by the justice system, by the penal system, by the social welfare system, by the education system, by the financial system, and the list goes on – because of the color of their skin, stated Chamath Palihapitiya, founder and CEO of Social Capital. In no reasonable, moral worldview is this acceptable.

The salient point is that equality, for all Americans, is an essential pillar of the US democracy and its capitalist economy…not a discretionary feature that can be arbitrarily turned off and turned on based on the whim of public and private leaders.

Conversely, we, as a nation, can’t fix what we don’t acknowledge and we need to acknowledge that systemic racism and unconscious bias have happened and continues to happen, and begin the hard work of finding solutions.

One solution

“We can’t solve problems by using the same kind of thinking we used when we created them.” Albert Einstein

In the past eighteen months since George Floyd murder at the knee of law enforcement, many private sector companies are embracing their role in creating more equitable workplaces, addressing societal racial inequality and even donating to causes working to end racism. Robert F. Smith, Founder, CEO and Chairman of Vista Capital, argues that if we want to see lasting, meaningful change, the private sector’s efforts to address structural racism, we need the private sector to step up and deploy “permanent capital” — meaning investments and commitments that are scalable and focused on the long-term. 

Specifically, companies should designate 2% of their yearly earnings to closing racial opportunity gaps, diversifying their boards and pension managers, making higher education more affordable, and addressing disparities that they’re uniquely qualified to help solve.

For example, telecommunications companies have a “special responsibility to end connectivity deserts” where one in three Black households have no broadband internet or computer access, according to Smith.

Health care companies can work to address racial health inequities, and software companies can make affordable tools to help Black sole proprietors and small business owners better handle payroll and customer acquisition. 

“It is all too easy to let the urgency of a moment fade away with little to show for it,” Smith said. “Let’s meet this moment. We have the tools, the technologies and the access to capital to do it. All we need is the willpower to see this through.” 

References:

  1. https://www.socialcapital.com/annual-letters/2020
  2. https://www.washingtonpost.com/opinions/2020/07/15/how-companies-can-make-practical-commitments-achieve-economic-justice/

Closing the Black Wealth Gap

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Black families have one-eighth the wealth of white families as a result of economic discrimination and institutionalized racism.

This year marks the 100th anniversary of the Tulsa Race Massacres. Over two days, a white mob in the city’s Black district of Greenwood killed an estimated 300 Black Americans and left nearly 10,000 destitute and homeless. The Greenwood area was known as Black Wall Street, an epicenter of Black business and culture.

The Tulsa Race Massacres is just one many thousands of violent and economic incidents throughout American history that created the wealth gap. As such, the Black wealth gap was created through centuries of institutional racism and economic discrimination that limited opportunities for African-Americans.

Wealth was taken from these communities before it had the opportunity to grow. This history matters for contemporary inequality in part because its legacy is passed down generation-to-generation through unequal monetary inheritances which make up a great deal of current wealth.

The racial wealth gap is a chasm with Black families owning one-eighth the wealth of white families. According to the Survey of Consumer Finances, in 2019, the median net worth of Black households was $24,000 as opposed to $189,000 for white households. This shortfall in financial wealth creates a cascade of inequalities in education, homeownership, and simply saving for emergencies.

Historically, Blacks were limited to certain neighborhoods and had more trouble borrowing to buy a home than white home buyers. Additionally, Black workers don’t advance to the top positions in companies at a proportional rate as other groups.

Moreover, African American families have had fewer opportunities to build generational wealth through home ownership, investments and inheritance. In this century, many Black families were stripped of their wealth and financial security by by both public and private institutionalized racism whether called Jim Crow or redline policies.

There are other factors: Many African-Americans, particularly older ones, are too conservative as investors. Only 34% of Black families own stocks, while more than half of white families do, according to a Federal Reserve. It is important to help African American investors get more comfortable with owning risk assets such as equity stocks, ETF and mutual funds that build wealth over the long term.

Do not seek shortcuts to build wealth

You must build wealth over time. If you’re saving 15% or 20% of your income over 30 years, there’s a good chance you will be wealthy. These methods truly work whether you’re making $50,000 or making $500,000 a year.

‘We just had an 11-year bull market. If you didn’t take the appropriate amount of risk, you’re significantly behind,” says Malik Lee, an Atlanta financial advisor whose clientele is more than 90% African-American.

American Dream for Black families

The heart of the American Dream for Black families is financial wellness, independence and freedom. There are many ways to express the American Dream, including owning their home, not living paycheck to paycheck, and being able to travel. Today, 69% of African American families are confident the American Dream is still attainable, according to MassMutual’s ‘State of the American Family’ survey.

Financial wellness for most families is the heart of the American Dream. American families tend to view financial wellness in terms of five common financial priorities:

  • Having an emergency fund
  • Feeling confident in both short-term and long-term financial decision making
  • Not carrying a lot of debt
  • Being financially prepared for the unexpected
  • Not living paycheck to paycheck

Black families are taking steps to secure their financial future and dreams, but more needs to be done to keep the American Dream alive. The top financial regret across all consumer groups surveyed is “not starting early enough.”

References:

  1. https://www.barrons.com/articles/this-advisor-wants-to-close-the-black-wealth-gap-accepting-risk-is-key-51625077456
  2. https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Net_Worth;demographic:racecl4;population:1,2,3,4;units:median;range:1989,2019
  3. https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/
  4. https://www.massmutual.com/static/path/media/files/mc1133aa_09248mr-final.pdf
  5. https://www.forbes.com/sites/brianthompson1/2021/06/17/the-key-to-closing-the-racial-wealth-gap-black-entrepreneurship/

Without another round of financial assistance, Black business owners facing tough choices | Bizwomen

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Without another round of financial assistance, Black business owners facing tough choices

Caitlin Mullen, Bizwomen contributor, Sep 14, 2020, 9:01am EDT

The pandemic has presented challenges for most business owners, but new research indicates recovery could take longer for Black-owned businesses. 

About 4 in 10 Black small business owners who received Paycheck Protection Program loans have had to lay off staff or cut worker pay as that money has run out, Goldman Sachs discovered. By comparison, 32% of all respondents said they had done so. 

Although just 16% of all business owners surveyed reported less than one-quarter of their pre-Covid revenues have returned, more Black business owners said this — almost 33%, reports Business Insider. 

The situation has prompted Grammy-winner Alicia Keys to create a $1 billion fund to support Black-owned businesses; the NFL is one of the organizations contributing to the fund, per Billboard. 

“As an artist, I’m always thinking about how can I use my platform to further racial equity. This fund is one of the answers and our goal is to empower Black America through investing in Black businesses, Black investors, institutions, entrepreneurs, schools and banks in a way to create sustainable solutions,” Keys told Billboard. 

Keys acknowledged the initial $1 billion goal won’t close the economic gap, but it’s a start.

“The next steps are to reach out to different industries to invite them to invest in racial justice and create a multi-billion dollar endowment across business sectors,” Keys told Billboard. 

A National Bureau of Economic Research working paper released earlier this year indicated the spring’s pandemic lockdown was particularly devastating for Black business owners: The number of working Black business owners went from 1.1 million in February to 640,000 in April. 

Black business owners also have faced discrimination as they’ve sought coronavirus-related financial assistance. About 95% of Black-owned businesses had little chance of receiving funds in the first wave of PPP loans, the Center for Responsible Lending said. 

The National Community Reinvestment Coalition found Black business owners had a tougher time securing loans at banks and faced bias their white counterparts did not, reports The New York Times.

The Federal Reserve Bank of New York recently noted counties with the highest concentration of Covid-19 also have the highest concentration of Black businesses and networks, and there were clear PPP coverage gaps in those communities.   

“Covid has basically been a very severe, devastating scenario for Black-owned businesses that were already struggling to survive,” Kenneth L. Harris, national president and CEO of the National Business League, a trade association representing Black businesses, told the Detroit Free Press.

The NBER working paper noted the pandemic’s effect on these businesses could result in near-term impacts on economic advancement and job creation, and long-term effects on wealth inequality. 

Congress has yet to agree on legislation that would provide another round of funds and unemployment benefits. If Congress doesn’t take action this month, 43% of Black small business owners say their cash reserves will run out by the end of the year, Goldman Sachs found; 30% of all respondents said this. 

And 40% of Black small business owners said they’ll have to cut wages or lay off workers without another round of stimulus funds; 36% overall expect they’ll have to do this.

Babson College and David Binder Research conducted the Goldman Sachs survey of 860 small business owners in the U.S. and U.S. territories in early September; 55% of respondents were women.

Main Street America has said almost 7.5 million businesses could close permanently this year due to the pandemic, leaving 35.7 million workers without jobs.

Source: https://www.bizjournals.com/bizwomen/news/latest-news/2020/09/without-more-assistance-black-business-owners-fac.html

Punishing Reach of Racism for Black Men | New York Times

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The burden of race and racism in America. Racial disparities in income and generational wealth are among the most visible and persistent features of American society.

The defining feature of the American Dream is upward mobility – the aspiration that all children have a chance at economic success, no matter their background. However, there are substantial barriers to economic opportunity that prevent Americans, specifically Black males, from rising out of poverty and achieving better life outcomes. “Black and white boys have very different economic outcomes even if they grow up in two-parent families with comparable incomes, education, and wealth, live on the same city block, and attend the same school,” according to the Equality of Opportunity Project.

In 99% of neighborhoods in the United States, black boys earn less in adulthood than white boys who grow up in families with comparable income.

Black boys raised in America, even in the wealthiest families and living in some of the most well-to-do neighborhoods, still earn less in adulthood than white boys with similar backgrounds, according to a sweeping new study that traced the lives of millions of children.

White boys who grow up rich are likely to remain that way. Black boys raised at the top, however, are more likely to become poor than to stay wealthy in their own adult households.

According to the study, led by researchers at Stanford, Harvard and the Census Bureau, income inequality between blacks and whites is driven entirely by what is happening among these boys and the men they become. Though black girls and women face deep inequality on many measures, black and white girls from families with comparable earnings attain similar individual incomes as adults.

African-Americans made up about 35 percent of all children raised in the bottom 1 percent of the income distribution. They made up less than 1 percent of the children at the very top. White children are more likely to start life with economic advantages. But we now know that even when they start with the same advantages as black children, white boys still fare better, only reinforcing the disparities seen here.

In reality, whites and blacks are not represented equally across the income spectrum. More than two-thirds of black boys are raised by poor or lower-middle-class families, while more than half of white boys are raised by rich or upper-middle-class families.

The most promising pathways to reducing the black-white income gap are efforts such as mentoring programs for black boys, efforts to reduce racial bias among whites, interventions to reduce discrimination in criminal justice, and efforts to facilitate greater interaction across racial groups.

Essentially, society needs to create the same opportunities for black men to thrive as you see for white men. That would involve things like mentoring programs, reducing racial bias, creating more racial integration within schools and within neighborhoods, so black and white kids have similar opportunities.

Read more: https://www.nytimes.com/interactive/2018/03/19/upshot/race-class-white-and-black-men.html

Source:

  1. “Race and Economic Opportunity in the United States: An Intergenerational Perspective” by Raj Chetty, Nathaniel Hendren, Maggie R. Jones and Sonya R. Porter; the Equality of Opportunity Project.
  2. https://opportunityinsights.org/race/
  3. https://www.pbs.org/newshour/show/black-men-face-economic-disadvantages-even-if-they-start-out-in-wealthier-households-new-study-shows

Police Called on Man Writing ‘Black Lives Matter’ on His Own Property

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White Woman Calls Cops on Man of Color Writing ‘Black Lives Matter’ on His Own Property in San Francisco

James Juanillo, who is Filipino, was stenciling “Black Lives Matter” with chalk in front of his Pacific Heights home when he was confronted by Lisa Alexander and her walking companion who eventually called the police.

Alexander and her partner, Robert Larkins, accused James Juanillo of vandalizing the property and claimed that Juanillo didn’t live there. Juanillo says to Alexander “you don’t know if I live here or if this is my property,” to which Alexander responds, “We actually do know, that’s why we’re asking.”

Lisa Alexander, former CEO of the La Face skin care line, reportedly is already suffering professional consequences since video showing her and her partner confronting James Juanillo in the posh Pacific Heights neighborhood went viral. Her partner was fired from his job at financial services firm Raymond James.

https://youtu.be/d4pk6-eQptM

“When I watch the video I am shocked and sad that I behaved the way I did,” Alexander said. “It was disrespectful to Mr. Juanillo and I am deeply sorry for that. I did not realize at the time that my actions were racist and have learned a painful lesson. I am taking a hard look at the meaning behind white privilege and am committed to growing from this experience.”

References:

  1. https://www.blackenterprise.com/white-couple-lose-their-jobs-after-calling-cops-on-neighbor-for-writing-black-lives-matter-on-his-property/
  2. https://sanfrancisco.cbslocal.com/2020/06/14/black-lives-matter-pacific-heights-video-confronted-lisa-alexander-jaimetoons/
  3. https://sanfrancisco.cbslocal.com/2020/06/14/ceo-apologizes-for-pacific-heights-confrontation-over-black-lives-matter-sign/
  4. https://www.huffpost.com/entry/lisa-alexander-james-juanillo-black-lives-matter_n_5ee751b4c5b69f21912152ca