How to Fight the Black Tax
Author and personal finance consultant Shawn Rochester, '02, discusses how to address the financial costs of conscious and unconscious anti-black discrimination.
Personal finance consultant Shawn Rochester, '02, noticed something curious about the many studies and articles written about racial discrimination.
"Over the years I would read articles and studies about discrimination against black people in various markets—for example, housing, automotive, financial services, the job search, etc.—and the impact of that discrimination just seemed like a tax to me," he said.
Rochester is CEO of Connecticut-based Good Steward LLC, a financial advisory and education company that uses workshops, coaching, and online courses to help people—mainly African Americans, such as Rochester himself—manage cash flow, eliminate debt, and maximize retirement assets. He sees clients who, despite successful careers, aren't on track to retire in comfort.
"There is a category of folks whom some would consider to have robust incomes, but they lack information about how to maximize their cash flow or how to reduce debt and maximize their assets at retirement by using vehicles like the tax-deferred retirement plans that are already in place for us," he said. While these people generally don't have the balance sheet to attract high-quality financial advice or coaching, they actually could accumulate significant resources if they had access to better information. Rochester's mother faced a similar problem when she emigrated from Barbados to the United States. "She was a motivated saver but didn't know what to do and wasn't around people who could give her good advice," he said.
In helping individuals with their finances, Rochester became concerned with the broader questions of why the African American community had an ingrained deficit in wealth and what individuals could do about it. This led him to write a book, The Black Tax: The Cost of Being Black in America. Rochester spoke with Chicago Booth Magazine's
CBM: What is the Black Tax?
Rochester: The Black Tax is the financial cost of discrimination against black people in America by people and/or institutions that have conscious or unconscious antiblack bias.
CBM: Why did you decide to write this book?
Rochester: I wrote The Black Tax because I wanted to help reduce the wealth gap by creating a paradigm shift that would help create jobs and businesses, and expand businesses in the black community by increasing the demand for products, services, and intellectual capital from black people and companies. I knew that simply asking people to buy products and services from black-owned companieswould not be very effective because many people view doing business with black entrepreneurs as a charity or a cost. I learned long ago that if you want people to act differently, you must get them to think differently. So I looked at research from the finest institutions in the country to see if I could quantify the financial costs of past and current antiblack discrimination. The results were shocking because the impact, scale, and continuity of antiblack discrimination was and still is far larger than what most people would have expected. This robust, data-driven approach generally helps readers to see the problem with greater clarity and gets them thinking about what they can do to help solve it.
CBM: The problems you describe seem so overwhelming. Where do you even start?
Rochester: Black people in America own just 2 percent of US wealth. This means that 1.4 million businesses with employees, 6 million jobs associated with those businesses, and well over $8 trillion in wealth that should belong to the black community are simply not there. These gaps in jobs, businesses, and wealth are driving almost all of the socioeconomic problems affecting the black community. So yes, these challenges can appear to be overwhelming.
The first thing we should start with is a focus on what we can do together to help close these gaps. In the final section of The Black Tax, I talk about an economic framework called PHD, which stands for "Purchase, Hire, and Deposit" in ways that create jobs and create and expand businesses in the black community. PHD accomplishes this by ensuring that (1) a greater portion of consumer spending is aimed at black enterprise, (2) black people and businesses are properly represented on payrolls and in supply chains, and (3) more resources are placed in black financial institutions to ensure that these businesses have the capital they need to grow.
This is important because Americans spend very little on black enterprise at all. For example, governments spend less than 2 percent of their supply chain expenditures on black businesses. Corporations and institutions spend less than 2 percent of their supply chain expenditures on black businesses, and even black consumers spend about 2 percent of their collective incomes on black business. In addition to this, only about $4 out of every $10,000 in the US banking system is in a black bank. This dearth of spending with black enterprise stifles job creation and business development in the black community. Because spending and investment levels with black enterprise are currently so low, even small changes in our spending and deposit levels can have an enormous impact on job creation.
CBM: What about diversity programs in hiring and purchasing? Are those working?
Rochester: These programs are well-intentioned but have not been particularly effective. As I've mentioned, supply chain spending with black business is extremely low, despite decades of efforts and black participation rates in almost all high-growth, high-compensation fields. And even at these very low participation rates, black people earn far less than their white peers, regardless of their education level. It would be a stretch to claim that these programs are working unless your comparison is the Jim Crow period of legal segregation, where black people were barred outright from participating, regardless of skill or competency level. In those days, the supply chain spend with black enterprise was effectively zero and today it is less than 2 percent. Given the data, and the roughly 74 years since the end of the Jim Crow period, one would be hard-pressed to say that these programs are working. Part of the problem is that terms such as diversity, minority, and inclusion, while well-intentioned, do not mean black. Those terms are generally euphemisms for "not white male." This is why companies can have "effective" diversity programs while having marginal to no impact on creating jobs and businesses in the black community.
For example, a company could decide to create economic opportunities for women by allocating more of their supply chain spend to women-owned businesses, which is a wonderful thing to do. If we look at women-owned businesses that have employees, we find that they generate about $1.2 trillion a year in revenue. But if we ask how much of that revenue is from black-women-owned businesses, we find that it's less than 2 percent of the total. So for every $100 of incremental supply chain spend on women-owned businesses, it's not until the 99th dollar that black women see any benefit.
Knowing this information helps decision-makers better understand the true scope of the problem. Because people associate minority, diversity, and inclusion programs with black people, they tend to think that the major beneficiaries of these programs are black people, which is not the case, particularly when it comes to supply chain spending.
CBM: Are there ways to get more African Americans to start more businesses?
Rochester: Yes, we can certainly create more black businesses and service providers, but the issue is, will there be incremental demand for those businesses? While most people focus on the supply side (i.e., creating more black enterprises), and we certainly need that, what I'm trying to do is focus on the demand side (i.e., creating more demand for black businesses), and that requires a paradigm shift from consumers, corporations, institutions, and governments. Research indicates that the level of antiblack bias in America generally ranges from high to very high, and that bias affects just about every facet of our lives, including commerce, and this is a significant hindrance to business development and job creation.
CBM: How do you get people to buy within their own community?
Rochester: If you look at the historical narrative, black people in America have not had the opportunity to create a critical mass of thriving economic enclaves because we were subjected to a particularly brutal and effective form of economic segregation. This impoverished large swaths of the black population. And, in general, when customers are economically deprived, it's hard for businesses to thrive, and the costs are much higher. This led to a lower concentration of high levels of business success and caused many people to associate lower quality levels with black businesses, which fueled a bias against black enterprise.
Part of what I want to do is shake that kind of biased thinking and behavior by creating a positive association between commercializing black enterprise and facilitating job creation in the black community. The idea is to stimulate the demand for our products and services and provide the capital to finance the resulting growth. This also applies to the black community, since our spending levels on black enterprise are very low. For example, while the purchasing power of the black community is about $1.2 trillion and supports about 24 million jobs in the US economy, less than 2 percent of that spend is on black businesses, and the vast majority of those jobs are outside of the black community. This—coupled with the fact that the vast majority of the companies who are recipients of black consumer spending (and thousands more who are not) do not practice PHD—further depresses job creation and business development in the black community. At the end of the day, a material shift away from the current 2 percent levels will have a massive economic impact by creating more jobs, businesses, and wealth in the black community.
READ MORE AT: https://www.chicagobooth.edu/magazine/blog/2019/shawn-rochester-the-black-tax
Black Experience Black life
Black prisoners more likely to be put in solitary, even as overall use declines
By Keri Blakinger
At the end of the 2008 fiscal year, 17.7 of the prisoners in administrative segregation were black; by the end of the last fiscal year, 24.7 percent were black. Over the same time frame, the portion of administrative segregation inmates who are white decreased by 4 percentage points.
The Texas prison system has shifted more than 4,000 inmates out of solitary confinement over the past decade – but those who are still there are increasingly likely to be African-American, according to Texas Department of Criminal Justice data.
At the end of the 2008 fiscal year, 17.7 of the prisoners in administrative segregation were black; by the end of the last fiscal year, 24.7 percent were black.
Over the same time frame, the portion of administrative segregation inmates who are white decreased by 4 percentage points and the portion who are Hispanic dropped by just over 3 percentage points. Across all groups, the number of inmates in administrative segregation dropped.
Even as those shifts occurred, the overall prison demographics moved in the opposite direction. The portion of the prison population that is black was about 4 percentage points lower last year than it was in 2008, while a slightly larger fraction of TDCJ inmates are white or Hispanic.
Even though the percentage of black inmates in administrative segregation is on the rise, it's Hispanic prisoners who are most noticeably overrepresented there. The overall prison population was about a third white, a third Hispanic and a third black as of the end of fiscal 2017 – but roughly half the administrative segregation population is Hispanic, a long-standing trend possibly tied to gang affiliation.
Administrative segregation is used to house prisoners deemed a security threat due to gang affiliation, escape risk or other evidence of ongoing danger to staff or fellow inmates.
The prison system reduced its reliance on administrative segregation through the use of innovative programs like Gang Renouncement and Disassociation. And in September, TDCJ eliminated the use of solitary confinement for punitive purposes, a change that impacted roughly 75 inmates still being isolated for rule-breaking.
A prison spokesman did not offer comment on the reasons behind the changing administrative segregation demographics.
READ MORE AT: https://www.chron.com/news/houston-texas/article/Black-prisoners-in-Texas-more-likely-to-be-in-12853969.php
Chicago man acquitted of hate crime after slapping, spitting on elderly black judge he called 'Rosa Parks'
The Chicago man who slapped an 81-year-old black judge, spat on her and called her "Rosa Parks" has been let off with no punishment.
David Nicosia was at the Windy City's downtown Daley Plaza two years ago when he was irritated by the cigarette smoke of Judge Annette Hubbard.
Hubbard, a circuit court jurist who was the first woman to head up the National Bar Association, said that he confronted her and told her "Rosa Parks, move."
Nicosia, a white 57-year-old who said he was at the courthouse to get a license to marry his boyfriend, testified during a one-day trial that he told her, "It's not like you're the Rosa Parks of smoking."
en he was irritated by the cigarette smoke of Judge Annette Hubbard.
He said he did not mean to cause any racial offense with the remarks, according to the Chicago Sun-Times.
The IT worker also admitted to spitting at the octogenarian jurist, but said that he only did so because she had launched tobacco-flavored spit at him first and the only reason he expectorated was to get rid of the saliva in his mouth.
Nicosia said that he slapped Hubbard as she tried to keep him from leaving, and Larry Rogers Jr. told the Daily News that video from the scene shows his client being flung eight to ten feet away when she grabbed on to his sleeve.
The defendant, who Rogers described as tall and more than 200 lbs. also testified that he thought may be crazy and could have had a gun in her purse.
Hubbard did not work for nearly a year and a half after the incident and said that she suffered post-concussion syndrome, according to the Chicago Tribune.
However, on Wednesday, Judge James Obbish did not agree, and said the incident should not have ever happened.
"All you have to do is move 2 to 3 feet away," he said of Hubbard, according to the Tribune.
Obbish also reportedly criticized Nicosia, who was charged with aggravated battery and a hate crime, and said that he did not behave the way men should towards women.
Rogers told the News that Obbish "wondered if the fact that [Hubbard's] a judge had a role in the charges being brought."
The attorney added that his client had never touted her position of authority during the trial, and that he did not remember the judge's acquittal including any justification for the actions that Nicosia admitted.
Featured Music News
The Last Poets: the hip-hop forefathers who gave black America its voice
Jalal Mansur Nuriddin, Abiodun Oyewole and Umar Bin Hassan. Photograph: Michael Ochs Archives
By Rebecca Bengal
You can trace the birth of hip-hop to the summer of 1973 when Kool Herc DJ'd the first extended breakbeat, much to the thrill of the dancers at a South Bronx block party. You can trace its conception, however, to five years earlier – 19 May 1968, 50 years ago this weekend – when the founding members of the Last Poets stood together in Mount Morris park – now Marcus Garvey park – in Harlem and uttered their first poems in public. They commemorated what would have been the 43rd birthday of Malcolm X, who had been slain three years earlier. Not two months had passed since the assassination of Martin Luther King. "Growing up, I was scheduled to be a nice little coloured guy. I was liked by everybody," says the Last Poets' Abiodun Oyewole. He was 18 and in college when he heard the news. "But when they killed Dr King, all bets were off."
That day led to the Last Poets' revelatory, self-titled 1970 debut of vitriolic black power poems spoken over the beat of a congo drum. Half a century later, the slaughter continues daily, in the form of assaults, school shootings and excessive police force. "America is a terrorist, killing the natives of the land / America is a terrorist, with a slave system in place," Oyewole declares on the Last Poets' new album, Understanding What Black Is, in which he and Umar Bin Hassan trade poems over reggae orchestration, horns, drums and flute. It's their first album in 20 years, reminding a new generation of hip-hop's roots in protest poetry.
The Last Poets – When the Revolution Comes.
"Ghostface Killah and RZA [from the Wu-Tang Clan] will bow down when they see us," Oyewole says. "People say we started rap and hip-hop, but what we really got going is poetry. We put poetry on blast." The Last Poets' poems have been sampled or quoted by NWA, A Tribe Called Quest, Public Enemy and many more; the rapper Common's Grammy-nominated 2005 song The Corner features the Last Poets (as well as Kanye West) representing the old-school guys in the neighbourhood who explain how black power rose up from the streets. "The corner was our Rock of Gibraltar," Bin Hassan says in the song. "Power to the people!"
The late Gil Scott-Heron, meanwhile, is often mistakenly believed to have been a member of the Last Poets. Rather, they were contemporaries, the connective tissue between the rap, hip-hop and spoken word genres they helped inspire, and their own direct influences: jazz and Langston Hughes and the words of their slain leaders. "'I been to the mountaintop!'" Oyewole says, quoting King's final speech when I visit him. "Ain't nothing but a poem."
On this Sunday, as with almost every Sunday for the last three decades, Oyewole is hosting the Open House poetry workshop in his Harlem apartment, a 20-minute walk from the spot where the Last Poets once spoke their first words. The door is cracked open for the stream of visitors who will fill the seats all afternoon and evening. Oyewole rarely reads his own work, but instead serves as teacher, leader and cook ("I do this to repair myself," he says). There are homemade salmon croquettes, shrimp grits and potatoes waiting in the kitchen. Fifty years of vintage posters and framed awards adorn the walls in the corridor – a literal hall of fame – while others are covered with masks from Oyewole's travels all over Africa and South America.
When he was growing up, Oyewole says, his father "raised me to hard work" – weeding the garden in Jamaica, Queens – "and I got love overtime from my mother". He calls two women mother, including the aunt who raised him and demanded he learn to clearly recite the Lord's Prayer so she could hear every word in the kitchen. Now 70, wiry, energetic, and having received his chosen name in a Yoruba religious service, Oyewole still uses his voice like an instrument, dramatically dialling it up and down in volume for emphasis in the free-ranging conversations that take place in his living room: basketball, the novels of Chinua Achebe, the backlash election of Donald Trump. "All Barack Obama got to do was clean up the mess made by the Bush administration. Pride was restored, money was restored. But that's all black folks has ever done, cleaning up. We've been the biggest servants this country has ever seen."
In the early 70s, when the Last Poets' first album began to attain popularity, Oyewole was in prison. He had been studying at Shaw University in Raleigh, North Carolina, and robbed a local Ku Klux Klan meeting. "I have a strong distaste for guns now," he says. "But back then I treated my .38 Special like it was my wallet." During his three-and-a-half-year sentence, Oyewole's good behaviour permitted him study leave. On school days, as part of his study, he would visit a radio station and read out entire books on the air, which were then broadcast in the evenings. "I'd come back to my cell after class and guys would holler: 'I got you on my headphones, New York!'" he says. These days, when he teaches poetry workshops to teenage girls incarcerated at Rikers Island, he exhorts his students to educate themselves. "I tell them: you put a top hat on time and you learn how to get time to serve you!"
The Last Poets today … Abiodun Oyewole, Baba Donn Babatunde, and Umar Bin Hassan. Photograph: PR
Last Poets drummer Baba Donn Babatunde drops by and Oyewole introduces him as the heartbeat of the group. Impressively tall, he wears a gold pendant on his dress shirt in place of a tie and speaks in a serious, mellifluous baritone. When he was 11, his activist mother turned him on to the Last Poets; since 1991, when he joined the group that so inspired him, he tries to summon in his drumming "the spirit, the anger I felt when I first heard those poems. What I do is the dramatisation of those words, carrying them rather than fighting them."
By and by others drift in. "Can I play your drum?" a guy called Jason asks as he wanders in. In his early 20s, he smokes some dope and grows quickly impatient. "Check this out!" Jason pleads, pausing to cue up a phone recording of himself playing at home.
Oyewole isn't having it. "I don't want to hear your damn gadget!" he explodes. He refuses to use a mobile phone. "In 1972, in my poem Mean Machine, I wrote: 'Synthetic genetics controls your soul,'" he says. "Who would I be if I had one of those things now? Some of them here get up and read their poetry right off their gadgets. I tell them: that thing is a wall between us and you."
He is equally harsh on those who blame their circumstances for their troubles, a philosophy Bin Hassan shares. One of Bin Hassan's poems on the new record, NEWS (North East West South), is a moving response to the death of Prince, who was a fan of the group. "I grew up black in the midwest; I had a creative father who could be abusive," Bin Hassan says a few days after the workshop. "The kid in Purple Rain is named Jerome, and that's my real name. So when I saw the film, I felt like it was my life story, too. But you can't get hung up – you have to use that and move on." Bin Hassan moved to Baltimore several years ago and, in between writing poems, he looks after his grandchildren. "I cleaned up," Bin Hassan says, having fought a crack addiction, "and I'm thankful I'm still here."
Rain Maker, a 20-year veteran of the workshop, runs through poems for a gig in Albany the next night. Albe Daniel, an actor and poet who calls Oyewole a surrogate father and addresses him as "Pops", brings his daughter Katie, six. A poet called Miriam strides up to Oyewole's chair: "This is Ramesses!" she says proudly, and a tiny face peeps out from a carriage. "Well, well," says Oyewole, smiling. "I just got off the phone with my own son, Pharaoh." A guy who introduces himself simply as Born brings bags of wine and groceries; soon there's frying in the kitchen, Lauryn Hill on a mini-stereo by the stove, the happy chaos of a little party in the making.
At about 8pm, Oyewole shuts everyone up. "We're getting ready to do poetry!" he shouts and everyone dutifully lines up. Immediately, a chorus of 15 or so voices – young and old, all persons of colour – recites in bright, powerful unison: "I want to be who I want to be …" This is the "pledge", committed to memory by every workshop poet, written on the fly by Oyewole years ago when he was doing a school visit in Brooklyn's Bedford-Stuyvesant district and a sharp-eyed student noticed he hadn't recited the US pledge of allegiance. "I don't sing no Star-Spangled Banner – that's a war song!" he responded. "And I tell you what, I got a better pledge than that one."
"I want to feel good about me, and blame no one for my misery," the poets continue in collective, syncopated rhythm. "I want to say what I know, to make my brothers and sisters grow."
"Baby, that's a mouthful!" Oyewole says, his eyes lighting up. It's time for the workshop participants to step up.
A guy in his 20s rises, mumbles his name inaudibly. He recites his poem over familiar music, the instrumental of Childish Gambino's Redbone. "You got a flow," Oyewole acknowledges, "but I want to see you being totally original."
A discussion about artistic theft ensues. One of the best-known homages to the Last Poets arrived via Notorious BIG's debut single, Party and Bullshit. Recently, a judge dismissed a lawsuit in which Oyewole alleged that Biggie, Rita Ora and other artists, infringed on copyright and used the lyrics in a "non-conscious" way, corrupting the original message.
"When the revolution comes, some of us will probably catch it on TV, with chicken hanging from our mouths," the Last Poets chant on their debut. "When the revolution comes …!" The line in question is one they say in a rhythmic chorus: "But until then you know and I know niggers will party and bullshit, and party and bullshit …" The rhythm is echoed in Biggie's recitation of the line. "It's like prophecy, Pops!" Albe Daniels says. "Y'all called it. The revolution came and they were all partying and bullshitting."
Abiodun Oyewole performing in 2006. Photograph: Johnny Nunez/WireImage
Vanessa, a New York-raised teacher in her early 40s with family back in Haiti, waits through a few protracted rounds of talk before the room shushes again. "May the dust of your slain sisters stick to the soles of your feet when you walk," she reads midway through her poem and Oyewole stops her. "Do that line again!" he shouts appreciatively. "That was so fucking powerful."
At midnight, the open house is closed. "I tell them all to scatter like mice!" Oyewole says. At seven the next morning, like every morning till 12.30pm, he will return to his desk and write facing east, to Marcus Garvey park. "I look east because that's where the sun rises," Oyewole says. "That's where life begins."
READ MORE AT: https://www.theguardian.com/music/2018/may/18/the-last-poets-the-hip-hop-forefathers-who-gave-black-america-its-voice