BUSINESS EXCHANGE: Am I My Brother's Keeper?
William Reed | 4/9/2014, 3 p.m.
How many times a day do you put money in another Black person’s hand?
How frequently do you personally put currency into another Black person’s hand for purchase of goods or services? Is a reason that Blacks don’t advance economically because we refuse to work with, for or support each other? The nation’s 43 million African-American consumers have a $1.1 trillion a year collective buying power: despite our enormous buying power, little of our money stays in Black communities or is spent with other Blacks. Do we not patronize each other on purpose? A dollar circulates in Asian communities for a full month, in Jewish communities three weeks. A dollar circulates less than eight hours among African Americans. Only 2 cents of each dollar African Americans spend goes to Black-owned businesses.
Most of the focus of conversations African Americans have among themselves is on politics; we do this to the detriment of discussions on entrepreneurship that would generate their common wealth. Every day, contemporary Blacks commit capitalistic malpractice through our ongoing collective negligence or incompetence. To change our position in America’s economic strata, Blacks need to educate children to become entrepreneurs, not just employees. Black peoples’ “empowerment” is in our own hands and control.
Nearly all of Blacks’ income is spent with people who live away from Blacks. When African Americans get paid, we often go to an Indian business to cash the check, an Asian hair salon, a corner store owned by Arabs and a White-owned department store. Blacks have to learn how to employ the power of networking for developing sales opportunities and contacts. In a network of Blacks supporting each other everyone can obtain and increase wealth as dollars circulate among us.
Too often Blacks are “all flash and no cash.” To become fully equal participants in American society, we have to “buy and bank Black.” We must grasp the fact that Blacks spend 93 percent of our income outside of where we live and be prepared to apply remedies. Fifty percent of African Americans are unbanked or under-banked. Twenty-four percent of Black households in 2009 had no assets other than a vehicle. Blacks on the average are six times more likely than Whites to buy a Mercedes, and the average income of Blacks who buy Jaguars is about one-third less than that of White purchasers. Creating and successfully running businesses creates wealth. Blacks need to create operations to serve and employ people in their own communities. The Black unemployment rate will drop drastically if more of us invested and supported Blacks operating and running their own small businesses. Businesses and communities excel when the dollar circulates and exchange hands multiple times with those in the community. Ghettos form and properties deteriorate when there is no dollar exchange building the community.
It’s time to admit it, Blacks avoid doing business with each other. Some subscribe to the theory that Black goods and services are “inferior.” Others don’t patronize Black-owned businesses out of jealousy. Either way, if we are serious about improving our communities, improving our schools, providing jobs (Black businesses are the 2nd highest employer of African Americans after the government), we must advance and support Black-owned businesses. Blacks’ pooling their economic resources is not unrealistic reverie. During the 1940s through the 1970s, to help build his membership base and save Black farms, the Honorable Elijah Muhammad proposed that Blacks form agricultural distribution chains and urban buying groups. The Nation of Islam set itself apart with urban retail centers. Dr. Jawanza Kunjufu, author of "Black Economics: Solutions for Economic and Community Empowerment," suggests the three ways to develop wealth are entrepreneurial ventures, real estate or stocks.
We all need to commit to “buying Black.” Investments among ourselves are the best ways we can address our socioeconomic disparities. In instances where you do have options as to where to deposit money; or make a purchase – frequent bars and restaurants, patronize clothing and dry cleaning businesses, try to be a conscious Black consumer.
William Reed is publisher of “Who’s Who in Black Corporate America” and available for projects via the BaileyGroup.org.