EDITORIAL: Attaining Economic Self-Sufficiency
9/11/2013, 3 p.m.
Those who regard communities located in Ward 8 as being the worst off in the city would be surprised to learn that the households in Anacostia have a total income of $370 million a year.
A whopping $370 million annually.
That’s quite an impressive figure and begs the question as to why Anacostia and Ward 8 don’t reflect this bundle of money that flows through the community.
Unfortunately, economists tell us, these millions exit Anacostia and other parts of the ward as quickly as they enter. According to The State of the African-American Consumer report, released last year, by 2015, the cumulative spending power of black America will be $1.1 trillion.
Yet the report – produced byNielsen and the National Newspaper Publishers Association – points out that this economic power is stifled because as researchers at the Selig Center for Economic Growth note, money in the black community only circulates zero to one time then it’s gone, poof! By comparison, a dollar circulates at least six times in the Latino community, nine times in the Asian community and as many as 36 times and more within and around the white community.
We know why. A part of the issue is that blacks have become consumers not producers; there’s the “white man’s ice is colder” syndrome; and then we as a community don’t save and invest in ways that would enhance the economic prospects of the community. Blacks spend their money on groceries, cell phones, hair and nails, clothing and accessories, shoes, liquor, cars, pensions and education.
The economic landscape for African Americans is complicated by social, economic, political and race factors. The average income for African-American households nationwide stands at about $47,290 with 35 percent earning $50,000 or more.
The Pew Research Center, citing 2009 data, has found that the median wealth of white households is 20 times that of black households and 18 times that of Hispanic households. In dollar terms, that translates into $113,149 for white households, $6,325 for Hispanics and $5,667 for blacks. The wealth gap ratio is the most lopsided since the government began researching and publishing such data 25 years ago.
Blacks and Latinos suffered a heavy toll when the housing market bubble burst in 2006 and both groups were battered even more by the subsequent recession that eroded the median wealth among Hispanic households by 66 percent and 53 percent among black households, compared with just 16 percent among white households.
Yet, as the Urban Institute pointed out in a recent study, income inequality only tells a part of the story. Wealth also plays a critical role. “Wealth isn’t just money in the bank, it’s insurance against tough times, tuition to get a better education and a better job, savings to retire on, and a springboard into the middle class. In short, wealth translates into opportunity,” the researchers said.
Yet with an overall aggregate household income exceeding $700 billion, black Americans remain viable consumers with growing collective buying power.
While we see the need and the importance of leveraging our political clout to address institutional and structural inequities which disproportionately affect people of color, we have to do as some experts suggest and really begin to develop and/or extend an economic agenda that as The Rev. Earl Trent of Florida Avenue Baptist Church said, is focused on improving the state of the black economy.
The Rev. Dr. Martin Luther King Jr., realized the need to do this and he spoke of economic parity, economic empowerment and the need for blacks to control their economic destiny.
In 2013, we have no excuse. If black people don’t support black businesses, save and create our own commerce, we cannot expect to create long-term sustainability.