African-American Self-Employment and Wealth Acquisition
This Manifesto is written at a period in American history when the availability of self-employment as a means of generating wealth has never been higher. Nevertheless far fewer African Americans are self-employed than are other ethnic groups and consequently, the collective wealth in the African-American community lags far behind. Wealth creation is essential for African Americans to achieve parity since access to the best of America is for those who can afford to participate.
For generations, African-American unemployment and underemployment has been at least double that of White Americans. How we got here is a complicated mix of racism, slavery, Jim Crow and to a certain extent, integration and other factors. The election of the first African-American President of the United States, is a proud achievement and an indication that while we have far to go, we may be closer to a colorblind society. However, his election has not and cannot alter the reality that African Americans remain among the poorest, least educated and most dependent on government social programs of all ethnic groups. Only we can change this.
We could solve much of this problem with education. Higher education, particularly, has proven to be a ramp upward for African Americans. College graduates take greater advantage of wealth building opportunities than do those without college degrees. The wealth gap between Whites and African Americans narrows considerably among college graduates. Yet, notwithstanding the amazing results achieved by HBCU institutions, and while more of us are going to college, the graduation rates and the percentage of African Americans that attend college remains significantly lower than for White Americans.
Also, with high school graduation rates for African-American students as low as 50 percent as some studies document, many are painfully unprepared to attend college. Consequently, while college is a viable option for some, many others must find their way to financial independence without a college degree.
The notion of African-American wealth creation is not new. Many have pressed our community to embrace wealth acquisition and business development. During American segregation, African Americans owned businesses at much higher rates than today serving primarily African-American consumers. With the passage of the civil rights laws nearly 50 years ago making it illegal and harder for white merchants to discriminate against blacks, African-American businesses suffered as more of us began to spend our money with non African-American businesses. Nevertheless, many business owners succeeded with some quite notable examples of which we read about from time to time.
If we are to achieve parity, we need many more such stories but they will not come without sacrifice, struggle and focus.
What do we have to lose? If tomorrow every African American started a business, we can and should assume that the vast majority of them would fail. Failure is typical and expected in business ventures. In fact, companies form to achieve financial returns while spreading the risk of failure among any number of investors or partners. Entrepreneurs view failed self-employment attempts as a form of training. I submit more African Americans must adopt this way of thinking. The threat of failure is not reason enough to keep more of us from trying. Data indicates that as a group we are failing anyway.
The relative cost to society of an African-American high school leaver trying self-employment and failing is negligible. We see the cost to society of that school leaver doing nothing – crime, welfare, substance abuse, children uncared for, substandard living conditions and lack of productivity all of which society will pay for one way or another.
Because they face the daunting challenge of finding and keeping a job, attempting to survive in the black market or living as someone’s dependent, in human terms, the risk of personal loss resulting from a failed self-employment attempt is certainly no worse. Our poor and undereducated brothers and sisters have little to lose financially and something to gain from trying and even not succeeding at self-employment. If nothing else, they learn from their self-employment experience lessons that could help them achieve success the next time they try or be a better employee.
For those with high paying jobs the cost of failure at self-employment rises but only if they must or choose to quit their jobs. Even so, depending on the field in which they work, they could become re-employed if the business fails which mitigates their risk. Many can and should run businesses on the side until they become successful enough to leave their high paying jobs.
Wealth building requires restraint and discipline. African Americans are among the largest consumer segments in America and at the bottom when it comes to saving and investing. We must consume less and save more to find the resources needed to invest in our wealth building ventures and those of others.