Wealth Gap Between Blacks And Whites Extremely Disproportionate
Wow. So black families are worth less than $5,000 and white families are worth more than $110,000…
According to The Advocate:
The median net worth — not income — of black families in the U.S. is less than $5,000 compared with more than $110,000 for comparable white families, said small business officials.
Democratic congressional members are emphasizing the economy cannot be rectified without helping the nation’s growing minority demographics lift themselves. White, black, Hispanic and Asian families are all losing family net worth, according to the U.S. Census Bureau, but the gap is greatest between whites and blacks. In 2010, the net worth for black families was $4,995, compared with $12,100 in 2005. The median white family net worth in 2005 was $135,000.
So what is the plan to start bridging this gap??
Atlanta Mayor Kasim Reed emphasized the need to focus the need to rebuild the nation’s economy by helping minorities thrive with financial independence. As the population growth rate of minorities continues to outpace whites, the nation will not be able to succeed with such gaps in wealth.
“We’ve got to move this conversation, so the opposition we face is not so withering and fierce,” Reed said. He did not use the hot-button “affirmative action” phrase.Rep. Chaka Fattah, D-Pa., said the American government has given advantages to Iraqi-owned businesses during the Iraq reconstruction bidding process but will not do enough of the same for minority-owned businesses domestically.
“We need to stop having selective amnesia,” Fattah said. Among the ideas mentioned were: Creating and better funding more mentoring programs, friends or family pooling funds for business ideas, adding more business incubators, and changing the criteria in some instances for determining loan eligibility.
Chancellor Llorens said Southern University plans to start renovations next year on a new small business incubator on campus that would house five to seven startup businesses. Southern’s existing Small Business Development Center helps small businesses and aspiring entrepreneurs with business advice and technical assistance on acquiring loans, capital and more, Llorens said. Ron Busby, president of the U.S. Black Chamber, Inc., said a major problem is that the majority of black-owned businesses are self-employed people without any additional employees.
“I say mom and pop (businesses), but it’s really mom’s or pop’s,” Busby said. If these businesses all just hired one additional employee, he said, then a sizable chunk of the nation’s unemployment problems would disappear. Kevin Hicks, partner of Blackman and Associates Franchise Consulting Firm, said the problem goes beyond raising capital, because there is a financial “information gap” as well. Hicks said he has consulted millionaire NBA players after they have gone broke.
“It’s really important we focus not just on wealth creation, but also transference and preservation,” Hicks said.