Hundreds bring solutions for closing wealth gap
As the racial wealth gap in the United States continues to broaden, the Southern Regional Asset Building Coalition arrived in New Orleans late September equipped with viable solutions for improving and sustaining communities that have historically high poverty rates and few assets.
From September 24 – 26, the SRABC hosted its seventh annual conference, “Closing the Racial Wealth Gap: Innovative Solutions for Change,” with a record number of advocates, researchers, activists, and elected officials gathering to share solutions for asset building that would close the national racial wealth gap.
The conference charged each participant with the mission to engage new stakeholders and discuss challenges and solutions for economic growth for the southern region.
“Conferences of this nature are designed to bring new and trending information to the southern region. What this conference offers participants is current information that they may not get in any other venue in the country. The conference offers information that is specific to people of color,” said Gena G. McClendon, project director and director of asset building in states and coalitions at the Center for Social Development at Washington University in St. Louis. “We designed this conference with an outcome that would draw participants to take action,” said McClendon.
Participants discussed historical data and existing social and economic policy structures that contribute to the growing racial wealth gap. The conference challenged participants to take the solutions back to their communities, begin implementing policies, and establish systems that will close the racial wealth gap.
“This conference has been a form of empowerment for me. I love the power and knowledge that is at these conferences,” said Sheila Jackson, program coordinator for the Campaign for Working Families with the United Way of Volusia-Flaglar Counties in Florida.
Closing the Racial Wealth Gap: History, Research and Stories
“The notion persists that hard work is rewarded with the prosperity of the American Dream, but it is not true for all racial groups,” according to Meizhu Lui, former director of the Closing the Racial Wealth Gap Initiative at the Insight Center for Community Economic Development in Oakland.
Lui said, “The wealth gap is not behavioral, but structural,” and therefore is not a byproduct of individual action or inaction. “Wealth doesn’t mean being wealthy, but being financially secure…and is generated by investing in assets that appreciate over time.”
This includes assets such as homeownership, which Derrick Johnson, state president for the Mississippi State Conference NAACP and executive director of One Voice Inc., said is the biggest wealth builder in any community, especially the Black community.
In fact, “two-thirds of every single dollar in wealth is [gained] through homeownership,” revealed Thomas Shapiro, director of the Institute on Assets and Social Policy at Brandeis University.
Even with such strong data in support of homeownership as a means of accumulating wealth, the gap between Black Americans and Whites endures.
According to Shapiro, there is a 27 percent difference in growth rate between Black Americans and Whites, and there remains a widening gap in wealth since the recession.
Darrick Hamilton, associate professor of economics and urban policy at the Milano School for International Affairs, Management, and Urban Policy at The New School for Public Engagement in New York, NY, said that the typical Black household has a lower median wealth. “Homeownership is an outcome measure…there are potentially other drivers [of wealth accumulation, such as] intergenerational transfers to purchase an asset,” he said.
“Wealth is an indicator of economic opportunity, security and overall well-being—an indicator in which Blacks and communities of color are most disparate…Policies and seizure have prevented people of color from accumulating wealth as an aggregate,” Hamilton said.
Though the same issues affect economic growth among Black Americans nationwide, Hamilton said the issues should be looked at from a local perspective. “Asset markets are local [and we] need to look at asset difference from a local context.”
Data collected by Hamilton revealed that sub-groups of people of color fared differently depending on the area of the country in which they lived. However, no matter how well or how poorly the group fared, the racial wealth gap still existed between people of color and Whites, regardless of the area in which they lived.
In the presentation, “Social Innovations and Working and Living in the Shadow of Economic Fragility,” Michael Sherraden, founder and director of the Center for Social Development at Washington University in St. Louis, presented how assets play a role in the stability of households. He said incomes are declining among the bottom part of the population and race strongly affects income and inequality. Sherraden stressed that the nation must understand these dynamics to address the issue of economic disparities.
The panelists encouraged SRABC advocates to return to their communities and address local policies that adversely affect rates of homeownership as a first solution to closing the racial wealth gap.
The Impending Issues
After a comprehensive review of historical and contemporary economic trends, conference presenters educated attendees on two issues that disproportionately hinder asset accumulation in communities of color: payday loans and child support payments.
During the “Building Strong Family Legacies” panel discussion, experts addressed the persistent issue of child support and how it plays a major role in diminishing Black families’ ability to generate and sustain wealth. Expert panelists proposed enacting laws that allow for affordable payments. These laws would allow parents remitting payment to sustain themselves, lessen the likelihood of affecting other family members and increase their ability to generate and pass along wealth across generations.
Gabriela Sandoval, director of policy and research with the Insight Center for Community Economic Development and panel moderator, provided the example of how child support not only fails to build wealth but also destroys the possibility of wealth accumulation. “Nate has a four-year-old daughter, Crystal. Her mother Sarah had to sign over rights to the government to receive assistance. Nate’s earned income credit was intercepted and he had his license revoked for child support. He is faced with chronic unemployment. Because his license is revoked, he has no ability to drive, which threatens the piece of job he does have and it limits his income.”
There are numerous examples of men and women like Nate. Mississippi State Representative and assistant public defender, Adrienne Wooten, added further insight to the child-support discussion and revealed how it is a systemic problem designed to hold back people of color. According to Wooten, “There are two million non-custodial parents in prison, and half of the non-custodial parents who are not in prison are unemployed.”
Jacqueline Boggess, co-director of the Center for Family Policy and Practice, added that fathers go to jail if they don’t pay child support. Further, burdensome child support falls disproportionately on non-custodial parents least able to pay. The vast majority of parents who owe child support have no job or reported earnings, and those who work make $10,000 or less per year. Of the parents who earned $10,000 or less, the median child-support order was for 83 percent of their income.
Boggess emphasized that any hope for improvement and positive outcomes must come from the federal government. States have minimal reach regarding child-support issues.
Outside of child support, the other prevailing issue that inhibits asset accumulation is predatory lending, especially payday loans. A number of legislators, including Alabama State Representative Rod Scott and Louisiana State Representative Sharon Weston Broome, have taken up the cause to fight predatory lending in their respective states, but there is still important work to do.
With interest rates that soar as high as 400 to 500 percent, “Payday loans do not mitigate financial stress; [payday loans] cause financial difficulty and a higher rate of bankruptcy,” according to Haydar Kurban, associate professor of economics at Howard University.
A panel of emerging leaders presented original research and proposed solutions for curbing predatory lending, including limiting accessibility, developing alternative loan products and expanding financial education. The presenters were Sienna Mitchell, MBA student at Florida A&M University; Jazmyne Simmons, recent graduate of the Florida A&M University Institute of Public Health; Shantell White, recent graduate of Florida A&M University; Alex S. James, sophomore finance student at Louisiana State University; and Leah Wooden, doctoral candidate of educational administration at the University of New Orleans.
The conference was capped off by a call-to-action message by the Rev. Dr. William Barber II, organizer of the Moral Mondays movement and president of the North Carolina state conference NAACP. Via video, he admonished, “Movements are not built from the top down, but from the bottom up. From Birmingham up. From Greensboro up… That’s what we’ve learned. We must be in a coalition that is transformative and not transactional, and not until just your issue is won. When we make the issues not about Black and White, or conservative versus liberal, but we actually go deeper, into our deeper values, we can build unlikely allies… With the new demographic in the South, and a new language, and homegrown indigenous leadership, with transformative movements that are deeply moral and deeply constitutional, anti-racist and anti-poverty, connecting these together we can, in fact, change, state by state. We can change the South. We can break through the old White southern strategy that has for too long divided us and save the very heart and soul of America.”
The conference ended with attendees breaking off into individual state coalition sessions lead by the Alabama Asset Building Coalition, RAISE Florida Network, Louisiana Building Economic Security Together, and the Coalition for a Prosperous Mississippi. Attendees met each of the sessions with excitement and the strong urge to forge ahead, bearing the charge to overcome existing barriers and implement initiatives designed to aid individuals to accumulate assets and sustain wealth that can be passed down from generation to generation.
“I’ve never experienced anything like this. My view of how to help low-income people of color has widened and I feel a connectedness that I’ve never felt before. I’m just amazed at this whole atmosphere,” said first-time conference attendee, Dorothy Maddox, family self-sufficiency services coordinator at the Daytona Florida Housing Authority. “I would like to reference [Meizhu Lui’s] rule number three, which uses housing to bring people out of poverty. Really, this conference is changing my life and how I go back to teach and impart.”
“My challenge is to get those with influence to be a part of this movement by working with the RAISE Florida Network and War on Poverty in Jacksonville, Florida,” said Shelia Jackson.
As Meizhu Lui reminded us, “[It’s about] lifting as we climb.” With the leadership and solutions of the SRABC as its foundation, the South is prepared to lead the way.
By Traneisha Jones
Special to The Drum