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Buying Better in Black Communities

Tomorrow is the 50th anniversary commemoration of the March on Washington, and the glorious words from Martin Luther King, Jr that rang through the crowd of between 200,000 and 300,000 strong.

Screen Shot 2013-08-23 at 11.20.48 AMWhat’s interesting though is that the March on Washington was actually called the March on Washington For Jobs and Freedom.  And the purpose wasn’t solely for Black civil rights, but was for economic rights for everyone.  The intent and demands of the march clearly focused on both “racism and economic deprivation” as the two together produced a cocktail that so negatively impacted the Black (and other minority) communities.  And, sadly, as stated here, “In many ways, the events are not purely commemorative but about unfinished business. The Saturday march is billed as a National Action to Reclaim the Dream. The march next Wednesday is called the March for Jobs and Justice.”

 

And when it comes to Buying Better, the situation isn’t much different.  This post, by Amy Cortese, author of Locavesting: The Revolution in Local Investing and How to Profit From It, presented some interesting points about how the idea of buying local doesn’t truly impact minority communities in the same way that it does in other communities.  And that’s mainly because Black people don’t own the businesses within their communities, so even when they spend local, the communities don’t benefit as say, a White community might.  As Cortese writes,

 

Maggie Anderson, the author of Our Black Year, opened my eyes to the fact that, in many neighborhoods—especially in poorer Black one—the ‘local’ businesses are not owned by people who live there, so the money spent at them flows right out of the community. African Americans account for 14% of the population, but they make up only 5% of business ownership in this country (and most of those businesses are sole proprietorships). The reasons are complex, but the reality is that, while African American buying power has surged, little of that spending is actually helping build wealth in Black communities.

 

Anderson cites some startling statistics:

 

$1 spent locally circulates nearly a month in an Asian American community before the money flows out.
In Jewish communities, it sticks around for about 20 days.
White Anglo-Saxon Protestant neighborhoods enjoy a locally spent dollar for roughly 17 days.
African American communities? Six hours.

 

All neighborhoods have “leakage” — money that flows out of the community and into the hands of nonlocal business owners, chain stores, bankers, landlords, etc. But it’s particularly acute in some Black neighborhoods. For every $100 spent in an “underserved Black community,” about $95 leaves, says Anderson, citing a 2004 report.

 

Six hours?  $95 dollars?  That has to change…but how?

 

Obviously jobs is not the silver bullet, as Black community buying power has grown over the years but it all flows out.  We can wish that more Black men and women would pursue entrepreneurship and set up shop to serve their communities.  Better yet, perhaps a better focus for the folks at tomorrow’s March on Washington would be to demand that programs and incentives be put in place to spur and support minority entrepreneurship within minority communities, as it would certainly lead to more jobs and more freedom, which was the original intent in 1963 [full disclosure: Swich’s founder is African-American].

 

But all that being said, we don’t actually have to wait on others to put incentives in place.  We can provide them ourselves – with our dollars.  More dollars being spent at local minority owned businesses leads to more community wealth (aka nicer, self-sufficient communities). Not only that, but it also results in more entrepreneurs who see possibilities, and more investors, who see opportunities, investing in those entrepreneurs.

 

So, by all means, March on Washington, demand jobs, but “swich” to supporting local minority owned businesses too!

 

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