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Roughly 100 years ago, W.E.B. Du Bois wrote that the color line would be the issue of the 20th century. As we enter the new millennium, race remains very much a major part of the societal debate. The dynamics, however, have shifted from integration into American society to the acquisition of economic power.
There’s no question that African Americans have made progress over the century. According to Andrew Brimmer, a former member of the Board of Governors of the Federal Reserve System and a member of the black enterprise Board of Economists, income received by African Americans may increase to $485 billion in 2000. But hold off on the celebration. Total income does not translate into wealth. According to the book Black Wealth/White Wealth: A New Perspective on Racial Inequality by Melvin L. Oliver and Thomas M. Shapiro (Routledge, $18.99), a typical black family holds on average just 11% of the wealth of a white family. (The most recent data from the U.S. Census Bureau showed that the median net worth of blacks was only $4,418, whereas whites’ median net worth was 10 times higher at $45,740.) Among the middle class, the figure improves to where a typical black family possesses on average 25% of what a white family does.
Moreover, the authors found that the differences in black-white income levels alone could not explain the racial wealth gap. Even among households earning $50,000 or more, where the wealth gap is narrowest, blacks possessed barely one-half the median net worth of their high-earning white counterparts. And poor whites control nearly as many mean net assets as the highest-earning blacks, $26,683 to $28,310. (See the feature, “Getting Started,” in this issue.)
If anything, the total money income figure only indicates the unrealized potential of African Americans in this country and the need for an agenda-a new deal, if you will-to achieve true economic parity.
To that end, the be Board of Economists recently met in New York to discuss several economic initiatives that could be implemented by African Americans to narrow that economic divide as we attempt to create, transfer and leverage wealth in our own communities. Present at the meeting were be Publisher Earl G. Graves; Thomas D. Boston, an economics professor at the Georgia Institute of Technology in Atlanta; Andrew Brimmer, president of Washington D.C.-based Brimmer & Co.; Marcus Alexis, dean at Northwestern University in Evanston, Illinois; and Margaret Simms, vice president, office of research at the Joint Center for Political and Economic Studies in Washington, D.C.
Also invited were guest economists Gerald D. Jaynes, professor of economics and African American studies at Yale University in New Haven, Connecticut; Jessica Gordon Nembhard, senior economist at the Institute for Urban Research at Morgan State University in Baltimore; Darrell Williams, professor of economics at UCLA and a partner with Economic Analysis, a litigation support consulting group in Los Angeles; and William E. Spriggs, director of research for public policy for the National Urban League in Washington, D.C.
We asked each board member to weigh in on