Investing in America’s Growing Assets: Minorities
How will America’s economic portfolio change in the next few decades as we race toward 2050 when racial minorities are expected to emerge as the majority of the U.S. population?
Investing today to uplift America’s minority students and innovators seems prudent.
Unfortunately, the excitement and energy of a nation that elected its first Black president a few years ago has dissipated. Did we expend all of our energy just to elect him to the office with none left over to do the necessary work?
I was hopeful such an election would translate into changes in the education system that routinely relegates poor black and brown students to lives upon a conveyor belt of chaos and confusion, where the American Dream is an elusive nightmare.
I was hopeful the infrastructure of private risk capital (angels and venture capitalists) would be expanded to include minorities. Unfortunately, both Whites and non-Whites seem to have relegated the president to the single-handed task of removing significant economic obstacles that block productive progress for millions of minorities.
I don’t know where the notion was conceived that the election of a Black leader would, in an instant, mitigate the economic imprisonment and wealth gap established by institutions of oppressive policies and practices that have remained from post-slavery to this presumed “post-racial” era.
We should recognize the fact the election of President Barack Obama is a precedent-setting anomaly lacking the infrastructure of support necessary to make Obama’s historic leadership much more than a first step in the right direction.
I’ve heard the premise that we live in a “post-racial” America where the presumed dying embers of red-hot racism that fueled the production of an economic foundation and built this nation’s institutions upon the backs of slave and low-cost labor for centuries is only kept alive today by those with a victim mentality who continue to rant and rave about racism.
My response? Follow the economic data.
The main economic categories that offer insight into a significantly divided Black and White America are simply: education and jobs.
There’s no need to belabor criticism of the failed system of public education, which services 50 million American students and dispenses disparate results along racial lines readily seen when relevant data are reviewed.
Consider that 87 percent of eighth-graders in high-poverty schools are not proficient in math. 88 percent are not proficient in reading.
The data indicate another economic crisis is set to hit the nation in 2015. Millions of unqualified students will flood the job market unable to obtain livable wages and engage in productive work.
What will become of these masses of minorities in whom the nation has failed to adequately invest?
On July 13, a coalition of more than 4,000 Black pastors released an open letter they signed and submitted to President Barack Obama petitioning to halt budget cuts that would negatively impact programs serving the poor.
As Christian leaders, we are committed to fiscal responsibility and shared sacrifice. We are also committed to resist budget cuts that undermine the lives, dignity, and rights of poor and vulnerable people.
The group, which calls itself Sojourners, made this specific point pertaining to the allocation of government resources:
A fundamental task is to create jobs and spur economic growth. Decent jobs at decent wages are the best path out of poverty, and restoring growth is a powerful way to reduce deficits.
The compassion on display by the pastors is honorable. Unfortunately, no data suggests that government has ever been the answer to the employment problem for Black Americans in any substantive way. In fact, the data suggest just the opposite:
Since the days of Dr. Martin Luther King’s call for jobs from the steps of the Lincoln Memorial in 1963 to this very day, unemployment among Black Americans has remained nearly double the overall jobless rate every year in a pattern so consistent that it is the focus of discussions and debates among those who have knowledge of the data.
“Job growth is going to be driven by the private sector but we can make some smart decision to encourage businesses to feel like this is the right time to invest and that America’s the right place to invest,” President Obama told the 26-member job council he formed in January 2011 with a goal of creating one million jobs.
Historically, no such institutional investment focus has targeted regions predominantly dominated by African Americans. Historically, White American business owners have been reluctant to employ Blacks; and diversity, which receives some lip service, isn’t high on the priority list for leaders in White corporations and White-owned small businesses that dominate America’s job market.
Need for Private Risk Capital
The Census Bureau’s most recent stats on 1.9 million Black-owned businesses reveal the vast majority are sole proprietorships; and of those with employees, very few have more than 100. Add to that fact the total gross revenue of all those businesses was $137.5B in 2007 … before the economic recession.
The revenue generated by all Black-owned business is less than 1 percent of GDP.
The National Venture Capital Association boasts venture-backed companies produced $2.9T. That revenue amounted to 21% of the nation’s $14T GDP in 2008. Compare that to Asian-owned businesses that produced $2.5T and employed half of all employed minorities in the nation.
Black Americans have no such risk capital infrastructure.
Angels and venture capitalists across the nation focus their investments on targeted regions. The private risk capital infrastructure, currently 65 years old, has largely ignored Black America, relegating more than a million innovative minority entrepreneurs to bootstrapping enterprises that lack the capital to move beyond the bootstrapping phase.
Even Startup America, a national collaborative venture endorsed by President Obama to support innovation and spur job growth, has yet to provide a plan by which it will assist Black America’s innovators who lack the infrastructure of business incubators, accelerators and connections to private risk capital. The options provided by Startup America make assumptions that do not address the challenges facing Black entrepreneurs, thus indicating a strong need for minority representation amongst the decision-makers presiding over partnerships and investments.
For Black Americans, Hispanic Americans, Native Americans and other racial demographic societies that have been oppressed or ignored by the main power structure, the answer is we must invest in ourselves.
As minorities continue to grow in number, but lack authority and economic power, it is vital that investments in the education of our children are sufficient to adequately prepare them to become both qualified job seekers as well as innovative job creators. We need strong minority leadership in the 21st century that will emerge from those cohorts in whom we invest today.
Investing In America’s Future
We need more organizations such as these that invest in minority youth and the future of America:
Usher Raymond IV is teaching youth entrepreneurial skills and global leadership with impressive results. His foundation, UNL, has developed a formula that shows every dollar spent generates 43 times return on investment. UNL hosts it Annual World Leadership Conference on July 20th in Atlanta and will honor Ted Turner among other leaders.
“We’re teaching youth about the world,” says Shawn Wilson, UNL’s president. “That’s how we make them stronger — by taking them outside the classroom, even overseas, to introduce them to new paradigms. We broaden their vision by exposing them to global issues. We help them think outside of the box to seek global solutions.”
Promising high school students from poor backgrounds are often prevented from realizing their potential solely due to lack of economic resources. The Level Playing Field Institute’s Summer Math and Science Honors (SMASH) Academy removes the financial problem and changes the equation. Currently, servicing 80 students on each of the campuses of UC Berkeley and Stanford University, SMASH is gearing up to expand across the nation and service students nationwide.
Students spend three consecutive summers in 5-week immersive environments with top instructors. SMASH boasts 100 percent of its students are accepted to four-year universities, the vast majority majoring in a STEM field.
“We shouldn’t be thanked for doing what we do,” says Level Playing Field Institute founder Freada Kapor Klein, “It should be a non-issue. These are incredibly talented, ambitious, wonderful kids. There shouldn’t have to be anything special for them. They should be in institutions that recognize and reward their talents. And they’re not. Our educational institutions aren’t set up that way. Our workplaces aren’t set up that way.
“Being a real meritocracy is hard work. Let’s get on it!”
We’re racing toward the year 2050. It’s time to invest in those promising minority students and talented innovators who have failed to receive our focus and investment. After all, at the rate minority populations are growing, they represent the next generation of America’s leaders building the American Dream of the 21st century.
By Mike Green