Tag Archives: black billionaires

Jay-Z’s Billionaire Ascension Highlights The Black-White Billionaire Wealth Gap In America


“I want to inspire people. I want someone to look at me and say “Because of you I didn’t give up.” – Reginald F. Lewis

Forbes Magazine recently declared that Shawn Carter AKA Jay-Z AKA Hova officially has the net worth to enter billionaire status. We wonder if there will be a follow-up to 50 Cent’s I Get Money song that was remixed and called the Billionaire Remix or Forbes 1-2-3 where Jay-Z, Diddy, and 50 Cent who at the time were worth a combined $1 billion between the three of them. Now, Jay-Z can do the song all by himself. Unfortunately, while social media celebrated Mr. Carter’s new found billionaire status, it does open up an additional layer to the conversation on the racial wealth gap in America. Of course, no one who is a billionaire is going to garner sympathy from Main Street America, but the lack of African American billionaires certainly can be argued as a point of why there is continued institutional weakness among Main Street African America.

African Americans make up 15 percent of the American population, but of the Forbes 400 wealthiest Americans there are only three who make the cut – Mr. Carter is not one of those three. This amounts to less than 1 percent representation. According to the website, “The minimum net worth to join this exclusive club hit an all-time high of $2.1 billion while the average net worth for a Forbes 400 member rose half a billion to a record $7.2 billion.” The only three African Americans present on the Forbes 400 are Robert Smith, who recently made headlines by promising to pay off all of Morehouse’s 2019 class student loan debt. Then there is David Steward, a man who could walk into almost every room in African America and would not be recognized, but has made his $3 billion fortune through co-founding an information technology firm that is integrated in the highest levels of corporate and government. Lastly, Oprah Winfrey, who ironically is not even the wealthiest HBCU graduate but is the wealthiest African American HBCU graduate. It would take 60 African American billionaires with a net worth exceeding $2.1 billion to be representative according to our population’s percentage. Overall, there were 680 billionaires in the United States in 2018 and only four of those at the time were African American, Michael Jordan being the fourth who is also a recently minted billionaire and also is a case study in himself of just how astonishing the wealth gap is among African American and European American billionaires, but more on that later. The irony of representation for African Americans is that the United States in 2018 comprised almost 25 percent of the world’s billionaires despite being less than 5 percent of the global population according to Wealth-X.

In 2014, the median wealth for African America stood at $9,590 versus $130,800 for European Americans, according to the U.S. Census Bureau. This means that for every $1 that African Americans have European Americans have approximately $14. This in itself is an astonishing number until you examine the gap among the billionaire class. The five wealthiest European Americans (Bezos, Gates, Buffett, Zuckerberg, & Ellison) have a combined net worth of $427.7 billion versus $13.4 billion for our billionaire five of Smith, Steward, Winfrey, Jordan, and Carter. It is a ratio of the aforementioned having $31 to every $1 of the latter, which is almost 2.5 times greater than the overall gap. For the gap to be progressively worse as the wealth goes higher is in some ways astonishing and in a lot of ways expected because of how the wealth is being created. Re-enter, Michael Jordan.

There is the man who built Nike and the man who owns Nike and they are not the same. Very few will argue that had Michael Jeffrey Jordan not signed with Nike in 1984 the company, founded and majority owned by Phil Knight, probably never becomes more than a two-bit player behind the likes of Adidas, Reebok, and New Balance. Jordan was a paradigm shift. The financial gods aligned the stars in 1984 for Phil Knight with the signing of the man who would become arguably the greatest NBA player of all-time, the NBA’s continued meteoric rise in popularity, cable television, and ESPN. All of these ingredients came together to take Nike from a company that in 1984 was doing $867 million in revenue to the behemoth that it is 35 years later with revenues of $36.4 billion. An increase of 4200 percent over the time period. Jordan’s brand accounts for almost 10 percent of the company’s revenues today despite Jordan himself not having played in the NBA for almost 20 years. No other brand comes close to the singular importance that Jordan still holds for Nike, and therefore Phil Knight. Yet, Knight’s net worth is almost $34 billion, while Jordan’s is only $1.9 billion. Ultimately, Jordan who earns around $100 million annually from Nike or 3.2 percent of the Jordan brand revenues is simply well compensated labor, while Knight, the owner, truly reaps the fruits of His Airness.

Consequences of these gaps is not unnoticed institutionally within communities. Billionaires tend to be major donors to institutions like education, healthcare, and more philanthropically. These are areas of institutional infrastructure for African America that are severely under built and underfunded.  Never mind the investments they make in the order of private equity or venture capital that spawns new generations of wealth and influence, which tends to lead into immense political influence in the form of political contributions that shapes policies for hundreds of millions. Phil Knight has contributed well over $2 billion to his former alma maters, the University of Oregon and Stanford Graduate School of Business,  an amount equal to the value of all 100 plus HBCU endowments combined. He has so much influence that the state of Oregon has changed laws just to accommodate his giving to the University of Oregon.

Unfortunately, coming back to one of Jay-Z’s most prolific lyrics tells a lot of the issues facing African American wealth accumulation where he says “I’m not a businessman, I’m a business, man.” For many this line is interpreted as Mr. Carter braggadocios that he is bigger than just being Phil Knight, he is Nike – and he is right and that is where he is also wrong. Instead of controlling the company and brand, he is the company and brand. In other words, if he does not work, then he does not eat in a sense. Many of Mr. Carter’s businesses are built on their relationship to him. They are what is considered a lifestyle brand and he is the lifestyle brand you aspire to be. You drink his liquor or wear his clothes because this allows you to share in his coolness. For his business to continue to produce, then he himself must remain relevant. Three of the five African American billionaires have made their money via sports/entertainment and mainly off their own image, while four of the five European American billionaires have built their companies via technology and scaled those businesses to something that the entire world wants and needs. Even Mr. Buffett, who has largely made his money through investments and lords over companies like Geico, Wells Fargo, and many other companies is so integrated into people’s lives, often in ways they do not even realize on a day-to-day basis. Their companies and brands are far more well known to the world than the founders themselves. Governments buy Microsoft software. In fact, Microsoft Windows still accounts for use on almost 80 percent of the computers worldwide. They have created systemic companies, while our billionaires have created mostly popularity brands and as we know popularity eventually fades as new generations arise. The fact that Mr. Carter has remained relevant this long is a testament to him for sure (and his wife), but not something anyone should assume can last a lifetime. There is also the reality that even if it does, he can not pass his social capital along to his children, but Jeff Bezos’ children can and will most likely inherit Amazon even if they choose to not run it.

The situation is also not isolated to African America. Worldwide, the sons and daughters of Africa are battling the same fate. Asia is experiencing a meteoric rise in their billionaire class and now trails only Europe/US with the Diaspora with the most billionaires. Africa, one of the world’s fastest growing economies, has less than 2 percent of the world’s billionaires but contains over 15 percent of the world’s population – mainly, due to Asian and European interest continuing to siphon the continent of resources and burden it with predatory debt to their own interest and benefit. Simply put, we are not going to sing, dance, or chase balls in closing the wealth or power gap overall or the gap in the pantheons of the two. We are going to have to build institutions that wield wealth and power on a mass scale not just in small silos. Mr. Carter and Jamie Dimon are financially worth roughly the same, but Mr. Dimon is the CEO/Chairman of J.P. Morgan bank that controls almost $3 trillion in assets. An amount that is 600 times all African American owned banks combined. Mr. Dimon is not a business, man. He is “just” a businessman.

A multilayered cake is what the wealth gap entails like so many other issues that African America is looking for solutions to as a community. This data ultimately just gives us another layer to examine to help level the playing field. Mr. Carter’s billionaire status while admirable also should raise pertinent strategic questions for the community in its economic development. How is African American wealth being created? Is it scalable? Is it replicable? Are we seeing the wealth circulated back within the our community’s institutions? The reality of what it means that the gap at the apex of wealth is so pronounced must be examined and what it can tell us is still to be determined, but we do know that while men lie, women lie, numbers do not.

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Can HBCUs Produce Billionaires?


By Jarrett Carter, Sr.

Ideas can be life-changing. Sometimes all you need to open the door is just one more good idea. – Jim Rohn

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Oprah Winfrey (pictured above) – The only African American billionaire & HBCU alum. Her most recent Forbes’ net worth is $2.9 billion. Who will be the next HBCU alumni to join her?

Colleges With The Most Billionaire Alum & Combined Wealth:

  • Harvard – 52; combined wealth of $205 billion
  • Pennsylvania – 28; combined wealth of $112 billion
  • Stanford – 27; combined wealth of $76 billion
  • New York – 17; combined wealth of $68 billion
  • Columbia – 15; combined wealth of $96 billion
  • M.I.T. – 15; combined wealth of $114 billion
  • Cornell – 14; combined wealth of $35 billion
  • Southern California – 14; combined wealth of $32 billion
  • Yale – 13; combined wealth of $77 billion
  • Cambridge – 11; combined wealth of $48 billion

Last year, Dillard University President Walter Kimbrough asked newly minted (allegedly) billionaire Dr. Dre about the missing love for historically Black colleges and universities following a sizable gift he made to the University of Southern California. The question was legitimate from most cultural angles – how does a Black man who made money making Black music for Black audiences boost the endowment of a predominantly white university?

But the question also demands a broader perspective on Black wealth and how it is created. Dr. Kimbrough’s argument was for the sake of Black wealth remaining in Black ecosystems of wealth creation. The center of those ecosystems, of course, is the Black college. But can the Black college serve as an economic engine powerful enough to create the next billionaire, or handful of billionaires?

On its surface, the answer would appear to be a resounding ‘no’. The HBCU was borne out of a white elitist obligation to make of former slaves and their descendants the teachers, preachers, and farmers that would serve as a generational of professional midwives to a humble, quiet existence amid the burgeoning industrial revolution. Along the way, HBCUs evolved into institutions where African-Americans would train to become physicians, engineers, combat heroes, scientists, lawyers, and pastors – all of the makings of a generation of emerging wealth for Black communities.

But as that generation was coming of age in industrial and financial independence, the nation again divided on the common problem of race, requiring the whole of its brain trust to dedicate mind and money to the cause of equity for all. At the end of the battle, desegregation was won. But the casualty of the battle was the cultural allegiances that birthed innovation and productivity for Black communities, and took the precious, dwindling commodity of racial pride out into predominantly white companies, neighborhoods, and values.

Today, the HBCU attracts but a portion of the best and the brightest from Black America; the rest remain lured by the false promises of diversity, equal opportunity, and post-racial societal ease. The training, nurturing, and programmatic development of the HBCUs falls on only a small segment of Black America’s collective and emerging intellectual capital. The youth are fractured, their networks are frayed and the genius that is unbridled innovation is capped by the promise of a six-figure job at a firm or company that, in rare cases, is owned by an African-American. To the last point, there are 5.7 million American firms with paid employees, but African Americans only own 1.9 percent of them.

The question is not if an HBCU can create a billionaire, but rather, can an HBCU create the network that helps to spawn billionaire potential? Facebook was founded, in part, by a group of friends at Harvard. Apple was founded by a group of college students. In fact, Silicon Valley was founded by Stanford University and originally known as Stanford Research Park. Other notable companies that have come out of colleges Google, Microsoft, Dell, and FedEx. Sam Walton and Jeff Bezos, titans of retail, were able to begin their careers thanks to sizable loans from family. The latter founded Amazon with a $300 000 loan from his parents.

Do HBCU students, families, and communities have the kind of commitment to pooling human and financial resources to cultivating substantial wealth? The answer is yes; but have HBCUs been built and marketed to serve as the incubators for this kind of thinking and development? Based upon current teaching, social and cultural structures on the Black college campus, the answer is no.

And that is something even Dr. Dre can’t cure.