Do we need more financial literacy education in schools? What can we learn from the atrocities of the past to help build a more equitable future for America? What real solutions can we put in place to grow financial freedom for everyone? The wealth gap experienced by Black Americans in comparison to our white counterparts is real; it’s an issue that demands our full attention and bold solutions. It’s time for “Real Talk, Real Change.”
This special edition of The Carlos Watson Show, brought to you by our friends at Chevrolet, explores income and wealth inequality, which has been created and shaped by centuries of policies that have systematically disadvantaged Black Americans and our ability to build, maintain and pass on wealth to the next generation. In this new special, we hear from a policymaker, business owners, thought leaders and a digital banker about what needs to change and what needs to be fixed. We owe it to our kids and to our future. I hope you’ll find this as powerful and illuminating to watch as it was to create.
So what is the wealth gap and how did it come to be? It is a concept as old as slavery in America, and still persists. The estimated median wealth of Black households today is $24,000. Compare that to white households, for which the median is approximately $188,000. What’s creating this divide? “Race has been the engine that has driven so many economic decisions,” says California Sen. Sydney Kamlager, that “we have lowered the value of Black people, Black labor, Black property and Black wealth.” It’s these policies, made generation after generation, that have created the “economic devastation” that is the racial wealth gap across America. How do we begin to narrow it?
Americans tend to use wealth as it’s acquired, and it’s this culture of spending that helps to increase the racial wealth gap. “We haven’t been taught investments, stock market, how to create wealth,” says business mogul and rapper Master P. “But we have been taught how to spend.” Black students are not being taught financial literacy. “There is no education that comes with money in the Black communities,” says comedian Kevin Hart, which results in an educational divide when it comes to learning about investing, earning and borrowing. How do we equip more kids with money smarts so they build Black businesses and a brighter financial future?
The past year has seen a lot of change — from the ravages of the pandemic to increased awareness of Black struggles within American society. It’s also been a year where some new Black businesses have flourished. “We’re now seeing a lot of interest from private equity from VC [venture capitalists], but who ignored us for absolutely years,” says Melissa Butler, founder of cosmetics brand The Lip Bar. This elevated interest and investment in Black businesses is helping to strengthen the economy for all, not just for Black Americans. With “inclusive growth . . . we create more businesses,” says Sekou Kaalund of J.P. Morgan, “which means more jobs, a stronger tax base. . . . The more we create these inclusive growth opportunities, we will really thrive more as a nation.” How do we sustain momentum for Black businesses?
Yes, there are many great Black American financial success stories: Former President Barack Obama, businessman Robert F. Smith, LeBron James and Oprah Winfrey have all accumulated large amounts of wealth and/or power. But when considering that the 400 richest American billionaires have more total wealth than all 10 million Black American households combined, these prominent outliers are the exception rather than the rule. “You can’t judge us by the billionaires,” says Tavonia Evans, creator of the cryptocurrency $GUAP coin. It has to be based upon whether the middle class is growing or thriving, she says, and “we have no middle class.”
The Tulsa Race Massacre in 1921 was one of the worst incidents of racial violence in American history, a shocking attack on a thriving Black financial community. The Greenwood District of Tulsa, Oklahoma, was an affluent community with prosperous businesses and banks — all owned by Black people and serving Black customers. It was considered to be the beacon of racial financial equality in the country. In an unthinkable act, it was destroyed, and over 300 residents were killed because “there were some white people who didn’t think they [the community] were worthy of that” success, says Ursula Burns, who was the first Black female CEO of Xerox. How can we work harder to ensure that this never happens again?
Despite racial issues being at the forefront of the news for the past year and a half, amplified by the murder of George Floyd and the Black Lives Matter movement, there is still a long way to go before America can be considered “post-racial.” Michelle Singletary, a Black personal finance expert and prominent writer for The Washington Post, still experiences racism regularly. But she has hope and believes that Black Americans should continue the dream of racial and financial equality. “When it comes to the wealth gap, it’s going to take [teaching] financial education on a personal level, making sure that diversity is not some sort of quota system,” Singletary says. Actor D.L. Hughley adds, “There are inherent things that have happened to us, educationally, environmentally, systemically, that have inhibited growth. Now, how do we remove those barriers and make it a level playing field and make sure that everybody gets to participate?”
How do we go about closing the wealth gap? Teaching financial literacy in both elementary and in high school — not just in college — can provide a foundational start. There’s also hope in the movement to digital currency, which allows us to have transparency and governance, $GUAP coin creator Evans explains. Linking these and other opportunities is technology, a tool that can help educate and build “a closed system for the folks in it that provides jobs, supports businesses, creates money flows” — and establish microeconomies, says actor, author and activist Hill Harper. “We want to talk about the greatest wealth transfer in history? We can actually participate in it by creating it ourselves, and that is power.”