A series in the suntimes examining the conjunction of race, class, and money not only in Chicago, but also in the US.
More blacks than ever are living the middleclass life -- attending college, working white-collar jobs, commanding comfortable salaries. But, when they leave the office, middle-class African Americans often return to predominantly black neighborhoods, to homes valued at a fraction of what similar homes sell for in their white coworkers’ neighborhoods.
It’s one of the legacies of segregation -- blacks might have achieved similar incomes but still have skimpier bottom lines. In fact, blacks’ assets amount to 10 cents for every white dollar of assets. Because homes are usually people’s most valuable asset, that puts blacks at a huge disadvantage for accumulating wealth. So blacks have less to invest — and less, as a result, to pass on to their children, perpetuating the middle-class divide....
I have to admit, the little side stories on the first article seem more interesting than the main stories. After all, in some ways, the fact that blacks don't own as much property, and the property we do own is worth less, is old news. That a home in a predominantly black neighborhood will sell for less than an equivalent home in an otherwise equivalent white neighborhood can't come as a surprise, especially in this city. As late as the late 1990s, larger banks were being caught "redlining" certain neighborhoods -- declining mortgage applications for no reason other than the race and/or location of the applicant.
The two side stories, however ... those are just odd.
Distrust, lack of knowledge lead many to shun stocks -- even banks
Chicago Sun-Times, November 13, 2005
BY MONIFA THOMAS AND CHERYL L. REED Staff Reporter
Home equity is the leading source of personal wealth in America. And investing in financial assets such as stocks, bonds, mutual funds and individual retirement accounts can also be crucial to creating wealth.
Yet middle-class blacks are less likely than whites to participate in these wealth-building enterprises, opting instead to focus on more immediate uses for their money, financial experts say.
Stock ownership among blacks with household incomes exceeding $50,000 has fluctuated over the years, from a low of 57 percent in 1998 to a high of 74 percent in 2002, according to the Ariel-Schwab Black Investor Survey. Whites have remained at or near 80 percent since 1998, the study said.
Lower levels of home ownership among African Americans partly explains the disparity, said Carla A. Foster, a vice president with the Charles G. Schwab financial house.
"If you're saving for a more immediate need -- like a down payment -- it's harder to set aside money for a long-term goal," Foster said. [...] There's also a historical distrust among blacks of financial institutions, such as banks, which once counted slaves as collateral.
"You've got 250 years of people putting their money under the mattress because we weren't allowed to put our money anywhere else, and now you expect us to be big investors?" said Rashaun Williams, an investment banker with Wachovia bank. "Just because they take the sign that says 'no colored people allowed' down from in front of the bank doesn't mean black people are going to suddenly go running through the door." [...]
Fewer marriages, more divorces cost blacks
Chicago Sun-Times, November 13, 2005
BY MONIFA THOMAS AND CHERYL L. REED Staff Reporter
Being married is good for your financial well-being, and, among racial groups, African Americans are the least likely people in the nation to be married -- another factor that limits blacks' ability to save for their own futures and those of their children and grandchildren.
Married people and their families typically have two to three times the net worth of other types of households. But marriage rates for black men and women are about 20 percentage points lower than those of whites.
And African Americans are more likely than whites to get divorced. In 1990 -- the last year the government recorded divorce rates by race -- black men and women were 20 percent to 30 percent more likely to divorce than white men and women, according to the National Center for Health Statistics. [...] The reasons for these trends in marriage and divorce aren't fully understood. There are plenty of theories. One of the most common is the low ratio of marriageable black men to women because of higher mortality and incarceration rates among African-American men. Also, college-educated black men are in shorter supply, leaving middle-class black women with fewer chances to find a partner with similar backgrounds.
Jimmie Murray offers another theory: Blacks and whites view marriage differently. "If you are white and female, you are raised to get married," says Murray, 43, who's black and lives in Evanston. "I don't remember my sisters ever mentioning marriage." Murray -- divorced and remarried now for 12 years -- reflects on his own parents' divorce. "I used to wonder how my father could leave us," he says. "I think he probably thought: 'I can do better.' "
And many successful, educated black men who aren't married want to stay that way, says Ed Laumann, a University of Chicago sociologist. Black men of all income levels are less likely than white men to be in a monogamous relationship, according to his research. "A black man with resources is in a seller's market," Laumann says. "What would be the incentives to hold him down?" [...]
Of course, that presumes that those same black men whom the previous articles have noted lack the education to understand the stock market view themselves as much the same sort of commodity as a stock. Bid high, you get a man; bid too low, and he's off to somewhere else. It also assumes that you get married purely for financial security, when the plain fact is that most middle-class men (and that is, let us not forget, whom we are discussing) don't even think about that as a reason. A middle class man with a good income may or may not view his wife's income or lack thereof as good or bad in and of itself, but he's just not terribly likely to think of a potential spouse as a primary source of financial security. That statement also assumes that black men are looking primarily, if not purely, to maximize sexual opportunity ... and that white men don't.
It's really kind of annoying ... and I'm not even one of the people the article is discussing, since marriage isn't even an option for me.
I will say this: I think that Jimmie Murray, one of the people interviewed, has something of a point. I'm an only child, but the majority of the people in my generation are women, and while some have married, apparently successfully, it was never made a focus for them. They were always encouraged to get out there, get an education, get a good job for themselves. The experience of my mother's generation was that for the most part, you simply couldn't count on the men ... and those you could count on seemed to die early. If you couldn't and weren't prepared to do for yourself, you were in for a hard life. (And in fact, the few cousins I have who didn't or couldn't do that have had very hard lives, compared to the rest of us.)
Posted by iain at November 15, 2005 10:43 AMComments
My name is LaCherrie Callaway,yes I'm an african american woman. When we talk about seperating our people it raises my eye brow, first and foremost stay in school, read, read, and don't stop reading I can't stress that enough, how about we help our sisters and brothers, by bringing people in the community to give job skills training, life skills, provide employment, teach them how to save and invest, teach what having good credit does for you I think all people should invest by the age of 21 at the least......
Posted by LaCherrie at May 20, 2006 10:22 AM
