Tag Archives: poverty

A Mother Of Three, Two Fathers, A Boyfriend, And 20 Dollars: The Harsh Reminder Of African America’s Financial Existence


Poverty is the worst form of violence. – Mahatma Gandhi

 

Warning: This story contains images with offensive language.

If you have not heard by now, there is a text conversation (pictured below) that went viral among #BlackTwitter concerning a (assumed African American) mother of three who asked her boyfriend for twenty dollars so her three kids who were not his could go on a field trip since their fathers supposedly did not have it to give her and she did not have it herself. Needless to say people were appalled from every angle. Many men could not believe she was asking her boyfriend to pay for kids that were not his and many women could not believe the boyfriend would not give his girlfriend the money since it was in many opinions – JUST twenty dollars. The two fathers were largely spared much critique aside, but according to the mother neither had it to give her, which is what made her turn to the boyfriend in a last resort. That four (assumed) African American adults could not come up with twenty dollars seems almost unbelievable, but there is a reality that this may have been exactly the case.

The addage that men lie, women lie, but numbers do not maybe quite fitting here. One in four of all Americans have no money in savings according to a recent study by Bankrate.com. Although the study does not break out race, it is often seen in every statistical category about wealth and income that whatever cold America has, African America tends to have pneumonia. It is fair to say that the likely percentage of African America with no savings is possibly well over 50 percent, but the numbers and story does not end there. A few other economic statistics to note:

  • African American poverty is almost three times the size of the national rate at 22 percent versus 9 percent, respectively.
  • African Americans are still the only racial group making less than they did in 2000.
  • African American median income is $39,490, while America’s median income is $59,039 and Asian America’s median income is $81,431.
  • Average savings account balance for African Americans is $1,000 versus white America’s $7,140 and Hispanics $1,500.

Now, put that last statistic against the average rent in the U.S. as of 2016, which is $1,050 and in essence African Americans exist in a perpetual negative financial existence. That none of those four individuals potentially had twenty dollars to spare is the harsh reality of most African Americans, a situation that becomes even more acute among low-income and working class African Americans whose education and job choices may leave them in a constant state of uncertainty financially. This is to say nothing of the impact that the children’s potential deficit of exposure and beneficial experience the field trip would have provided them, a serious issue worthy of its own exploration when it comes to the development aspect of African American children.

For many of us, the number could change to 50, 100, or 200 dollars and we would find ourselves in a similarly uncomfortable conversation. It also speaks to the lack of support system around this mother and her children from her own family who may also be facing financial angst. There are a lot of layers to this story that much we can be for certain. We can certainly explore the systemic issues and lack of financial aptitude that face our community and the like, but what we should not be is quick to judge any of the individuals in this situation without truly understanding the full breath of our community’s reality.

 

Advertisements

City Bus Stops: An Underutilized Force For Education


Users do not care about what is inside the box, as long as the box does what they need done. – Jef Raskin

By William A. Foster, IV

It was one evening some years ago that my father and I had a debate in my  parents living room about an article that I read in the New York Times concerning prep schools versus public schools and how much they spend per student. The New York Times stated that Philips Exeter Academy in 2008 spent $63,500 per student annually, while a report from the Organization for Economic Cooperation and Development shows that the U.S. as a whole spends about $12,000 per student annually. My father could not understand what PEA could possibly be spending over five times the amount on. I said to him it was the difference between showing a kid a map of India and taking them there. That being said, as someone who comes from a family of educators and being a community college professor for a period of time and seeing just what happens when an adult has had a weak K-12 experience, I often ponder ways in which communities can go about closing education gaps among groups and strengthening the education infrastructure.

Perhaps the worst kept secret is that groups who come from disadvantaged backgrounds have a chronic gap when it comes to education. By age three, children from lower income homes have heard 30 million fewer words. The national high school graduation rate for African Americans is 73 percent, which is almost 10 percentage points lower than the national average and 14 percentage points lower than European Americans. There have been calls for a universal Pre-K, which sounds good in theory but probably will ultimately do just as much harm as the current system. Many have argued that the U.S. does not spend enough on education, this despite the OECD saying that the U.S. actually spends more than any other country on education. The report according to CBS News that, “In 2010, the United States spent 7.3 percent of its gross domestic product on education, compared with the 6.3 percent average of other OECD countries.” This appears to be not a case of not spending too much, but spending it poorly. As an economist and investor myself, one of the most important things for my firm is capital allocation. It is not just a matter of how much we are spending, but where and how we are allocating that spending. Simply spending more is not always an answer to fixing problems as many on the political left suggest, but neither is allowing students to go to better schools through vouchers a sensible alternative as those on the political right suggest which would have devastating effects on the economics of poor and middle class communities. In essence, what is needed is a better creation of supplemental education for those communities. Supplemental education is the ability to access learning away from the four walls of a school.

For many upper income families, museums, summer camps, and private tutors provide the moonshot to the education they receive during their K-12 matriculation. These experiences and building blocks add to a substantive educational gap between the haves and have nots and while there are always many fascinating high brow proposals of how to fix education for underserved communities, we often ignore the simplest. Two things of note should be focused on to that respect. First, provide supplemental education where the people you hope to reach spend their time. Secondly, keep it simple. Academics, again I come from a family of them, while I admire their ability to convey information, they are at times too smart for their own good. In other words, they can make one plus one into the next coming of Einstein’s theory of relativity if you give them enough time. For underserved communities though it is often at the foundational level where they are most deficient. An issue that then cascades and compounds year after year as they progressed through secondary and then into adulthood. It was the simple foundation that they missed and that their kids are missing that could have moved their trajectory. So how do cities both meet the people where they are and more importantly where their time is “hostage” and and also keep it simple? Bus stops.

1 Million Milestone

That is right, bus stops. New York City has 16,350 of them, Los Angeles has 15,967 bus stops, Chicago has 10,813 bus stops, and Houston has approximately 9,000 according to a Twitter inquiry. These are the four largest urban cities in the United States of America with a combined population of 17.5 million, a number equivalent to 5.4 percent of the entire U.S. population. The four cities ability to serve low income and middle class families is obviously magnified just by the probability of the sheer size of the populations they have that will fall within those confines. The poverty levels for the four aforementioned cities is also surprisingly inversely correlated to their public transpiration size with New York City’s 20.3 percent, L.A.’s 22 percent, Chicago’s 22.6 percent, and Houston’s 22.9 percent. According to Pew Research Center, “Americans who are lower-income, black or Hispanic, immigrants or under 50 are especially likely to use public transportation on a regular basis.” There is not enough research to show a correlation to public transportation’s reduction in poverty, but one can access that the easement of which labor can move farther distances allows for more economic opportunities to be gained. Therefore, if a low-income community has access to affordable public transportation and their own community lacks economic opportunity, the ease by which they can move into areas of stronger economic prowess may allow them work opportunities they may not otherwise have available. However, while there maybe no correlation, there is opportunity to educate and we know that correlates to reducing poverty.

Imagine for a moment that each bus stop, both children and adults, are introduced to a digital screen (think those annoying “commercials” at gas station pumps) that circulates a plethora of vocabulary words, basic mathematics problems,  and science and history clips. Just the basics, but again fundamental. If a city really wants to get out of the box, even introducing lessons in financial, health, and government literacy. If done in concert with the school districts in the city, teachers at the elementary through college levels could be featured in these videos and those teachers targeted in bus stops within their teaching area. This may also go a long way into reestablishing what many now complain about as the broken bond between parents, their children, and the teachers who educate them. The videos produce a familiarity for the teacher in the same way that people develop affinities for celebrities they have never met. Of course, in this age where municipals are tight on funds, just how does all of this get paid for? This is a financial journalism publication after all. The PPP (Private-Public Partnership) model would be most advantageous. Companies in the city, New York City, Houston, and Chicago have 143 Fortune 1000 companies combined, would foot the majority of the bill for the producing of the digital content and refitting of the bus stops. Just what those companies would receive in return beyond goodwill and basic advertising would be left up to the leadership of the city to negotiate.

I grew up in a household and family where education and learning was not only a family value and expectation, it was something I was immersed in as I reflect in what seemed like at all times. There were always books around, much of my life existed on a college campus as my mother has been a professor for almost four decades, trips to museums, engagement with the arts, and as a result me and my sister’s probability of succeeding was given a great advantage over many of our peers. Education is a wholistic lifestyle that one is immersed throughout their lives. The sooner that immersion, the more often that immersion, then probability of success is sure to follow. My sister and I were at an advantage, we were a privileged pair whose family can trace our educational heritage back four generations to my great-grandfather and great-grandmother who were college graduates. That is not the reality for most low income and middle class families. They are families trying to take that next step, even if they do not know which step to take often. In order to increase their probability towards that success, cities have to acknowledge that they are often in poor schools to begin with and that they need more, much more. The best return on investment is often achieved in using the infrastructure that already exist and that meets citizens where they are.

As Jef Raskin alludes to in his quote, communities will not care where quality education happens be it in a school or at a bus stop, so long as it happens.  The ability to convert bus stops into head start and continuing education facilities for a city is something that truly does what needs to be done.

 

The Finance & Tech Week In Review – 12/31/16


zu3yfgjbqpaifw5vkjxp

Every Saturday the HBCU Money staff picks ten articles they were intrigued by and think you will enjoy for some weekend reading impacting finance and tech.

Out of this world igloo beckons early settlers on Mars / New Atlas 

What are the current maintenance issues facing today’s U.S. National Park system? Get the facts / Pew Environment 

Proxima b is at least 1.3 times as massive as Earth — but that is just a minimum estimate. / Science News http://ow.ly/JZbi307BrfA

Stop buying organic food if you really want to save the planet / New Scientist 

5 easy ways to fight mobile app fatigue / CIOonline http://ow.ly/ZLxH307BrrG

8 digital skills we must teach our children / WEF 

Negative labor trends that pre-date the Great Recession / St. Louis Fed 

Average fixed-rate mortgage rates rise for ninth straight week, first such streak since 2005 / St. Louis Fed 

Giving money to the poor? Here’s what they really spend it on / WEF

Wives now contribute around 30 percent of household income, up from 2 percent in 1970 / St. Louis Fed  

The Fed & Tech Week In Review – 12/3/16


zu3yfgjbqpaifw5vkjxp

Every Saturday the HBCU Money staff picks ten articles they were intrigued by and think you will enjoy for some weekend reading impacting finance and tech.

Study, work, retire. Time to scrap the old pattern of working life l @wef wef.ch/2gHgdLg

1/4 of global energy-related GHG emissions come from transport. l @WorldBankwrld.bg/zmDr3003A2O

Alexander, Who Use To Be Rich Last Sunday teaches about opportunity cost and spending l@council4econed bit.ly/270jvuK

Natural disasters hamper growth and make it harder for the poor to escape poverty. Solutions? l @WorldBankAfrica wrld.bg/kodn306sJsd

We can recycle everything we use, including cigarette butts and toothbrushes. So why don’t we? @wef wef.ch/2fMHkAt

Physics may be a small but crucial fraction of our reality l @newscientist newscienti.st/2g4nuDC

Eleven cities that are showing the way on fighting climate change l @renewablecities buff.ly/2gfWuOY

ESA approves 2020 ExoMars rover despite crash earlier this year l @newscientist newscienti.st/2gS77c1

Nikola Motor Company Unveiling — Details On “Zero Emissions” Semi Truck l @cleantechnica ow.ly/Hmqn306MkGe

Hubble uses galactic lens to study universe’s first stars l @sciencemagazine ow.ly/UCdA306Mll6

Poor African Americans 500 Percent Less Likely To Reach Top Than Their Poor Counterparts


To be a poor man is hard, but to be a poor race in a land of dollars is the very bottom of hardships. – W.E.B. DuBois

Over almost the past 60 years, a period post World War II until now, African America has followed an almost unbridled strategy of fighting for access to institutions owned and controlled socially, economically, and politically by others. This while other communities like Asian, Latino, and Jewish Americas continue to build their own institutions. Everything from schools, business hubs, neighborhoods, and think tanks to name just a few. Except for the likes of Malcolm X and even Martin Luther King, Jr. before he was assassinated, the strategy of gaining access to other communities’ institutions as a definition of success, acceptance, and “equality” has gone largely unabated. There is plenty of data that could be examined to make a quantitative analysis of whether since World War II we have improved our social, economic, and political positions to assess whether we should continue down this proverbial path. Instead, we rely on qualitative analysis (if you can call it that) of how an event makes us feel. In fact, one could go so far as to say we are more interested in superficial progress than structural progress. We celebrate the Ruby Bridges access to another community’s schools and starting of the domino effect that has been crumbling our institutions ever since, but have never truly celebrated the building of the schools she was being educated at before then that were built by us and for us.

blackamerica 1.50.14 PM

white4-08-25 at 1.50.48 PM

A report from the Brookings Institution paints a grim picture for the reality of upward mobility in America for African Americans in poverty. Above in the two pictures, Brookings Fellow Richard Reeves highlights the chances of someone from the bottom quintile of American society reaching the top quintile if they are African American or European American. As you can see above, the chances for an African American starting from the bottom and rising to the top is 3 percent while the chances they remain stuck in the bottom quintile is over 50 percent. In contrast, an European American born in the bottom has a 16 percent chance of rising to the top and less than one-fourth chance of remaining in the bottom quintile. This represents a more than 500 percent better chance that an European American in poverty can rise to the top of the economic ladder than their African American counterpart. Clearly, all poverty is not equal.

The household and institutional wealth gaps are not getting worse, they are spiraling out of control to a point of potentially reducing African America to a  permanent underclass. Largely, due to the fact that African American social, economic, and political capital is not diversified nor circulates. Unfortunately, we are often trapped into conversations about symbolic changes and not substantive ones that could increase the probability for African Americans self-dependency. Scholar Theodore R. Johnson describes African America, “is a fragile state embedded in the greatest superpower the world has ever known.”

What are we not doing and what other groups are doing never seems to be a question we are willing to ask ourselves. Our efforts at best tend to revolve around gaining faux access and blaming others for not allowing us to drink from their cup. Or we give away what little we do control trying to show we are just as “American” as everyone else. HBCUs do this every time they give a “minority” scholarship to a non-African American on their campus when in actuality their African American students are the ones who need the scholarship as reflected in the median net worth of African America being dead last among all groups. Or when we stop celebrating our cultural events to not make others feel unwelcome or uncomfortable. However, anytime African Americans enter other groups environments we code switch or enter the double consciousness to survive because they are not going to lessen their cultural capital to make us feel comfortable. Again, what are they doing that we are not? They are investing in themselves and their institutions.

Why are the odds of making it out of poverty so drastic between two groups within the same economic quintile? Because one has access to a pipeline that is owned and was created for themselves and the other (African America) abandoned what it had built and now owns next to nothing. African America does not like the quality of its K-12 through college schools, but those with capital do not create funds to train and hire better teachers, build new libraries, improve technology, etc. African American unemployment is twice the national level, but we sit aside no money to create seed grants for budding entrepreneurs or deposit money in our own banks so that they can lend to African American owned businesses seeking to grow. This is why out of the 1.9 million African American owned businesses, only 100 000 have more than one employee. Yet, if you go to any Metro Bank, an Asian American owned bank, not only do you see their community faithfully walking in and out, but you will also see a plethora of Asian American owned businesses built up around it. Wherever they have their bank they set up a business development around it so when a customer takes money out of the bank they can walk right out of the door and into one of their community’s stores which in turns allows that store to pay back its loan so that its banks remain strong and other businesses can borrow and grow and employ those in their community. This is the lifting of all boats and why in short order Asians are on the heels of European Americans for highest median net worth and why Latino America has already surpassed African America in wealth. We are doing everything to invest in others and not ourselves.

We are poorer today than in 1915. Let that sink in a bit. In early 20th century, we owned 500 hospitals, 134 banks, 100 boarding schools, and more. Today, we have one hospital, 23 banks, and four boarding schools left. Our dependency on others has never been greater. Particularly, African America has become dependent on the government with 1 in 5 African American jobs in the public sector, the highest among all groups, naturally. If we want to reverse the trend, then we need only look at what our ancestors did 100 years ago coming out of slavery. Every other immigrant group has taken our blueprint and is rising to power. Unfortunately, until we quit trying to fight for “equality” and start fighting for power, then the probability of substantive and qualitative progress will have less odds than winning the lottery – twice.

WATCH BROOKINGS’ INSTITUTE RICHARD REEVES FULL VIDEO