At some point in our lives, we begin to prioritize our financial obligations and give more thought towards our aspirations. When it’s time to take action, we seek outside resources to support us in attaining these goals we have set for ourselves. To assist in learning how to effectively budget, save, monetize and manage our finances, people often seek guidance online, in books, workshops, and if the means are available – financial advisors.
But what if we don’t find the racially diverse, financial services that many of us are seeking? Regardless if it’s sound advice that can be incorporated in daily lives or the generic tips that have been said before, financial advice and support is readily available and systematically created for white low, middle, and upper class individuals.
What I’ve come to ask myself is why African American, low income individuals and families from impoverished neighborhoods, not given the same support and access to the needed information to become financially literate and accumulate wealth?
Financial services do not adequately reflect the economic challenges of minorities – specifically African Americans, given that they represent 13.4% of the total population. I’m finding that so many individuals and families in these impoverished communities are in a cycle of generational poverty and I’m trying to figure out why.
Financial services are extremely white-washed and lack the diversity needed to raise the economic status of minority communities.
There’s this illusion that minorities can easily climb out of poverty. Followed by the question of how poverty began and the reason America is partially to blame for those still in impoverished neighborhoods. Financial services are extremely white-washed and lack the diversity needed to raise the economic status of minority communities.This is where history comes into play – the history that we were deliberately not taught in school.
WHAT DO I MEAN BY GENERATIONAL POVERTY
Low-income, African American families experience a cycle of generational poverty – relating to socioeconomic status (SES). When I talk about SES, it relates directly to race; focusing on oppression and inequality in income, housing, employment, and education.
To come from a low-income community as an African American, means to be intentionally overlooked and experience socioeconomic deprivation.Tweet
HOW DID POVERTY BEGIN AMONGST AFRICAN AMERICANS
THE BLACK (GREAT) MIGRATION
The Black Migration was a significant movement between 1915 and 1970, that consisted of millions of Southern African Americans seeking to escape oppression (lynching, physical/sexual abuse, and poor education) and achieve economic advancement in Northern cities. Three of the major cities were Chicago, New York, and Philadelphia.
One of the motivations to migrate from the South to the North was directly influenced by World War 1. With millions of men who were sent to serve in WW1, there was a huge demand for workers in factories. Many southerners from the first and second migration took this opportunity to work in factories to create a better life for themselves, their families and for future generations.
Unfortunately for most, it didn’t work out as such. Around the mid-late 1900’s, African Americans were faced with a familiar problem. Working in manufacturing industries, black people were not allowed to work in high-skilled positions that would gradually increase economic standing.
These jobs mainly consisted of machine, clerical, and service work; limiting black people to only working menial, dangerous, and segregated jobs compared to their white counterparts who gradually progressed to higher paying positions.
Although the Great Migration gave rise to black middle class, it also wreaked havoc on those who weren’t lucky enough to get employment opportunities. Once factories began the use of mechanical equipment, unskilled or limited skilled migrants no longer had a form of income to support their families.
HOW EXACTLY DID THIS WHOLE IDEA OF GENERATIONAL POVERTY COME INTO PLACE
Back in the south, many women who were domestic slaves experienced sexual exploitation – they were sexually harassed and raped by their owners and others with authoritative power. As a result, many of them had children by their abusers, and when it was time to migrate to the North – many of those children accompanied them. Unfortunately, after factories were mechanically upgraded, many African American workers found themselves struggling to find labor work as a means to support their families.
EMPLOYMENT AND INCOME
With the challenges of finding employment and/or having a low-wage job that didn’t allow black single mothers to support themselves or their children, many of them eventually enrolled in public assistance programs such as welfare, because of low levels of education and inadequate means of child support.
Inevitably, many of them became dependent on welfare support, while choosing to work menial jobs on the side and using their partners as a means of support. Of course this resulted in different men in and out of the family’s life, leaving many of them pregnant – having to fend for multiple children without understanding the repercussions of such actions.
What children learned in the “disorganized home[s]” of the ghetto was that adults do not finish school, get jobs, or, in the case of men, take care of their children or obey the lawMoynihan
HOUSING AND EDUCATION
With the troubles of finding employment, also came the challenges of finding housing for African American families. Thousands of black families looking for homes in the North put a huge competition between African Americans and whites. Many white’s either threatened to leave the neighborhood unless they closed down housing markets for incoming migrants or chose to leave because of the overpopulation of black people amongst them.
This is essentially how the ghetto was created. It threw the poorest African Americans in public housing, in between low-middle class and white middle class homeowners; oppressing them from achieving upward mobility which resulted in many physical stressors due to their social standing.
These ghettos offered jobs with no potential growth and poor educated schools – lacking the resources for generational success. There were many external influences that stifled the growth of many African Americans.
Within these communities, mayhem took over. Mainly due to being trapped in these environments that consist of drugs and gangs, and not adequately finding a means of support in getting out. Many fall victim to the glamorization of street culture and end up incarcerated or dead; (not sure which is worse).
For women, it’s the amount of single, uneducated mothers raising children and working low-wage jobs that leave children unattended – seeking support from poor networks. This is essentially how the cycle begins. It mainly has a lot to do with how the systems sets minorities to stay in poverty.
The reason why SES is so significant in this post is because it’s the determining factor when discussing racial segregation when climbing the wealth ladder. Your socioeconomic status determines your quality of life in income and housing, as well as employment and education. Present day, segregation still exists, displaying itself in the following:
INCOME AND HOUSING
During the period of 1930’s Great Depression, Franklin D. Roosevelt enacted economic relief for millions of Americans by instituting federal programs called The New Deal (National Recovery Administration). The New Deal were financial reforms, one being the National Housing Act of 1934 intended to help low income individuals and families afford homes by offering third year mortgages and fixed rates.
However, this policy was not intended to support African Americans. To guarantee that Americans made their monthly loan payments, FDR came up with Homeowners Loan Corporation; which created residential security maps. These maps were created to determine mortgage lending risk based on residential districts. In all reality, it was the beginning of economic inequality and systemic segregation.
Green: These areas consisted of higher income, successful white’s
Blue: Consisted of white collar individuals and families
Yellow: Declining areas with working class individuals and families
Red: Were the ‘at-risk’ areas full of immigrants and black people.
Areas with a redline were the areas lenders refused to provide financial services to black individuals and made it almost impossible for African Americans to purchase or refinance homes/properties. When they were able to purchase homes, they were given higher rates and fees compared to whites. This resulted in the abandonment of properties, lack of transportation services for access to work and school, and an increase in crime/drug – lowering the areas property value.
The problem today is that there is still discrimination and oppression towards minorities, especially coming from impoverished neighborhoods; but there is a lack of discussion and action taking place to end it. Institutional and structural discrimination has been the primary reason why low and middle class African Americans have trouble getting through the barriers of establishing wealth in home ownerships and education.
As we know, home ownership is the main form of accruing wealth. It is interconnected to education when it comes to financial stability. With housing discrimination and poor education systems, black families settle with low fractions of wealth compared to white families (including those with little to no education and low incomes).
What does that really tell you?
When it comes to education and homeownership, there is a cycle. Americans are able to afford public schools by paying property taxes in their neighborhoods. When you’re able to afford living in a better neighborhood with valuable homes, you are almost guaranteed better funded schools that include qualified teachers, resources and educational services, and social development activities for students. The better the school, the higher value in property, the more money is available to build more schools.
Without lenders providing African Americans with the needs required to climb the economic ladder, what are we left with aside from generational poverty? It’s time we stop speaking about these discriminatory issues and oppressive treatment towards our communities and start actually doing something about it. We are still oppressed – The Fair Housing Act of 1968 needs to severely be enforced when discussing the financial issues of African Americans – not only when it’s convenient for whites.
We need to acknowledge the damage it’s done to generations past and how we can effectively bring about change today and going forward. Let’s discuss policies we need to enforce and new policies we can institute to protect and break generational barriers for our people. We need people from our communities who are educated in financial literacy to help teach struggling individuals and families the importance of financial independence.
We are going to emancipate ourselves from mental slavery because whilst others might free the body, none but ourselves can free the mind.marcus garvey