African Americans contribute over one trillion dollars in discretionary spending to the U.S. economy, in spite of the wealth gap that exists. What contributes to this disparity and how can the black community be economically empowered? Part 2 of a discussion with Trabian Shorters, Founder & CEO of the BMe Community. Click here for part 1 of Economic Empowerment.
See a partial transcript of this interview below:
Traynham: What are the policy barriers, if any, that should be broken to be able to raise the awareness within the community?
Shorters: Yeah, so number one, we don´t think about poverty in terms of assets. We think about it in terms of income. Poverty is not a function of income. Poverty has always been a function of assets, right?
Traynham: Assets meaning a house, or whatever the case may be?
Shorters: Assets meaning things that appreciate in value, so it´s your home, it´s your stocks, it´s your bonds if you´re invested in that. It´s anything that goes up in value.
Traynham: What about you? What about investing in you? What about your education?
Shorters: Oh, yeah. Well, I think education is one of those lead-ins. Like, people who have education do better than people who don´t have it, so I would count that in the asset column. I would count business ownership in the asset column. I would count property ownership in the asset column. So all these things are things that appreciate in value. And when you look at the typical white family literally has 22 times the assets of a typical black family with the same income. So, when you think about that, I live in South Beach, all right?
Traynham: Which is, I assume, in Miami, Florida.
Shorters: In Miami, Florida. You will see young people there hanging out on the beach 24/7, going to expensive clubs, just spending money like crazy, but their actual income is zero. Are they poor? Or are they spending Mommy and Daddy´s money, right? So, assets is a function — I mean, poverty is a function of family assets. And literally, the number one determinant about who goes to college when we talk about education — the number one determinant is family assets.
Traynham: Sure. And when you say assets, I hear wealth in terms of building wealth or whatever the case may be. And I think a prime example of that is when you own a home. You buy a house today, maybe it´s $100,000. You perhaps, maybe put a new kitchen in. You perhaps, maybe have your next-door neighbor sell their house. You build equity in that home, which means wealth.
Shorters: That´s right.
Traynham: Perhaps, maybe five years from now, you can sell that house for $120,000, or maybe even more.
Shorters: That´s right. That´s exactly right. And when you think about — on the housing piece — when you think about, for instance, black banks — Black banks are more likely to lend to us to get houses. But do we deposit in black banks? They´re more likely to lend in our communities, so why don´t we bank with them, right? A lot of people are treating banking black as a protest, but it´s not a protest. It´s progress. You have to being willing to spend or to deposit your money where it will do the most good for you and your community.
Traynham: So, we talked a little bit about the policy. And now, we´re segueing into what I call the personality. And what I mean by that is the relationship that we all have with ourselves. You made the point about, look, if I have $5,000, maybe I should make a deposit into a black-owned business…
Shorters: Why not? -…and/or bank, or whatever, because I believe not only am I helping myself, but I´m also helping out that small business, which could be a bank, which could be a credit union, whatever the case may be.
Shorters: Yeah, food store, clothing store, you name it. There´s 2.6 million black-owned businesses in the United States, and you can find them — There´s this great app called WhereU.biz.
Traynham: Repeat that one more time for the folks that may have just heard that.
Shorters: Sure, WhereU.biz. It is a black Yelp. It is black-owned businesses across the country rated by people who´ve been to those businesses. So we can find them, and the only thing we´re saying — you know, there´s this great study that shows that if African-Americans alone were to increase our spending just to 10 cents on the dollar with black-owned businesses, it would create a million more jobs in the United States, because these businesses are typically under-resourced, under-patronized. And when you have a trillion dollars to spend the way you want to, spending eight cents more someplace else…