THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, July 27, 1995 TAG: 9507270360
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY GERTHA COFFEE, THE ATLANTA CONSTITUTION
LENGTH: Medium: 83 lines
With affirmative action under attack and other programs aimed at helping minorities land jobs and win business contracts being derailed, millions of blacks are wondering how they can achieve financial security.
Financial experts say it can be done despite the long odds.
``This is as far as the train goes,'' said Dennis Kimbro, author and professor of entrepreneurship at Clark Atlanta University. ``If you want to reach your destination, you've got to walk from here.''
That walk is akin to navigating a minefield. Consider the statistics:
Blacks have lost economic ground since the peak of the Civil Rights era more than 25 years ago. In 1993, black families earned 55 cents for every dollar white families earned, according to the U.S. Census Bureau. That's down from 61 cents in 1969. A reason for the income gap, some analysts say: More than half - 58 percent - of black households are headed by single women, many with low-paying jobs. A generation ago, only a third of black households were headed by single parents.
Others say the issues are far more complex, and include racism. For example, the black unemployment rate of 10.6 percent is more than double the 4.8 percent for whites.
``If you can't get the jobs and you can't get the work through your business contracts, how do you level the playing field?'' asked Charles Ross, host of a radio program on personal finance.
Although the obstacles seem insurmountable, achieving a greater degree of financial self-reliance can be done.
That goal is not out of reach when you consider that black buying power is forecast to grow nationally to $427 billion in 1996, according to a recent study by the University of Georgia.
Unfortunately, nearly all that money - 98 cents of every dollar - is spent outside the black community, said Lydia McKinley-Floyd, director of the Urban Marketing Research Institute at Clark Atlanta.
``There is no way you can expect any kind of economic stability, not when you have that kind of cash outflow.''
Blacks will have to create more businesses and support those businesses, said Robert Golden, co-founder and president of Pronet Group Inc., an Atlanta-based network of minority professionals and businesses offering services at a discount.
``That would increase income for business owners, who would redistribute the money back into the community with jobs and other efforts.''
Experts say minorities need to devise - and stick with - a road map that leads to greater financial self-reliance.
Here's what they suggest:
Get your church involved. From slavery to the Civil Rights era, the church has played a pivotal role in black achievement.
``The black church is going to have to form a partnership with the black business community and other people of goodwill to pool resources to get started,'' said economist Edward Irons, retired dean of the business school at Clark Atlanta.
``If we can get 10 enlightened ministers in 50 major cities to begin to move toward the accumulation of financial assets with the goal of buying viable businesses or starting new enterprises that will create jobs, we can revolutionize this country.''
Unload your debt. For free help in debt management, contact the Consumer Credit Counseling Service.
Form or join an investment club. For information, contact the National Association of Investors Corp. at (810) 583-6242.
Set up an inheritance program. Use wills or living trusts to make sure your money and property are passed on to your heirs. Only a will can be used to appoint guardians for minor children. Make sure the plans include provisions for paying any taxes that may be due. If you want to leave money to your children, consider setting up trust funds for that purpose. Talk to financial planners, accountants and lawyers.
Accumulating wealth on a broader scale will take a consortium of black politicians, business and religious leaders, and the black middle class, experts say.
``There is as much frustration in the black community in 1995 as there was in 1965, if not more,'' Irons said. ``And when people get hopeless, they do irrational things.
``We've got to come together with good ideas and face this `rebuilding' of America Newt Gingrich and others are advocating. It's a survival challenge.'' by CNB