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Blacks Optimistic about Finances

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By Freddie Allen
NNPA Washington Correspondent

WASHINGTON (NNPA) – Members of the Black middle class are more optimistic about their finances than they were a year ago, according to a recent study by the research arm of Prudential Financial Inc.,

Prudential surveyed more than 1100 Blacks on a wide range of financial topics in March. The survey participants ranged in ages between 25 and 70, with a household income of $25,000 or more with “some involvement in household financial decisions.” Fifty-one percent were married and 41 percent had 1-2 children. Thirty-five percent had some college experience, while 33 percent finished high school or less.

“The study shows increasing economic power and an emerging middle class within the community,” Charles Lowrey, Prudential’s chief operating officer, U.S. Businesses said in a press release. “Approximately 4 in 10 households surveyed have annual incomes of at least $75,000, and nearly a quarter earn $100,000 or more. Half of African Americans surveyed said they feel better off financially than a year ago, while only 19 percent say they feel worse.”

The study also reported that nearly two-thirds of Blacks surveyed “feel better off financially than their parents,” but economic optimism is often held in the eye of the beholder.

“How you feel about your situation doesn’t say much, except that you feel good about it,” said Steven Pitts, a labor economist at the University of California at Berkeley. “It has no value beyond that.”

Still, some economists point to the recovery of the housing market for the improved outlook, while others say that the positive financial outlook permeating the Black middle class has more to do with Black family living in the White House. As the Prudential study suggests, there are a number of factors that continue to contribute to the cautious optimism interwoven into the experience of Blacks in America.

“On one hand, we expect the best; on the other hand, we’re prepared for the worst,” said Julianne Malveaux, an economist and immediate past president of Bennett College for Women. “That’s how African Americans proceed with their finances; the better off you are the more likely you are to feel like everything is going to be okay, at the same time you know it may not be.”

James Clingman, author of the weekly syndicated newspaper column, Blackonomics, that focuses on economic empowerment in the Black community, said that the optimism expressed by the Black middle class was ironic given the dire financial straits of the Black community as a whole.

“I do see it as a paradox that we are the most optimistic group when it comes to the economy, yet we are doing the worst in the economy, collectively,” said James Clingman.

During the Great Recession, Blacks lost half of their collective wealth, largely due to the collapse of the housing market and the impact of predatory lending practices that plagued the Black community.

Blacks also suffer the worst rate of unemployment. On Friday, the Labor Department reported that the unemployment rate for Blacks rose from 13.2 percent in April to 13.5 percent in May. The jobless rate for Whites remained unchanged at 6.7 percent. Instead of improving with the first Black president, the unemployment rate for Blacks actually got worst.

“The president is not going to provide any jobs to anyone,” said Clingman. “So it’s too much emotion and sensitivity on our part as Black people tied up in the fact that we have a Black president.”

The Prudential study reported that, “One-third of African Americans are financially supporting children under 18 or grandchildren, and 9% are supporting parents or grand­parents – both higher than the general population (25% and 4%, respectively).”

Paying off debts, having enough money to weather emergencies, and supporting children often dominated the list of financial priorities held by Blacks in the survey.

Malveaux said that juggling those priorities is often a unique experience for Blacks, and it’s not as common in the general population.

“Your children are in debt your mom doesn’t have the social security she needs so you’re basically being pulled between the past and the future that’s the juggling you have,” said Malveaux. “The Black middle class is being pulled in many different directions, so it’s unreasonable to compare them to similarly situated Whites.

These debt priorities have stifled the ability of Blacks to grow wealth for generations.

“African Americans are significantly more likely to have some type of debt (94%) compared to the general population (82%). Credit card, student loan and personal debt are all significantly higher in the African American,” stated the Prudential report.

Despite the heavy debt burden, Blacks still managed to increase their level of spending at a faster pace than all other racial groups.

According to the Selig Center for Economic Growth at the University of Georgia, “African American buying power will increase 73 percent between 2000 and 2012, which not only overtakes the 60 percent increase in Caucasian buying power, but also the 67 percent rise in total buying power of all races combined.”

In 2012, Nielsen’s research and information company projected that African American buying power would reach $1.1 trillion by 2015.

Even though researchers tout Black buying power as significant evidence of improving economic opportunities and strength in Black community, some economists question the value of the emerging Black middle class and higher incomes without the solidarity needed to have real socioeconomic impacts.

“Individuals have money communities don’t,” said Pitts. “The capacity to use that money for some larger social good requires some sense of cohesiveness. It can come from the outside world, or it can come from some incredible sense of solidarity or some combination.”

Pitts said that harnessing “Black buying power” is more challenging than most studies of the phenomenon suggest.

“The question is how do you take the spending power of individuals and forge that into a collective hammer. The capacity to do that is not self-evident,” said Pitts. “My fear is always that the factoid is put out there in a way to try to provide an unnuanced [sic] way of going forward or a way of criticizing the communities for not doing better. I just think the world is more complicated.”

Not so complicated, is the fact that the money rarely stays in the community where it’s spent for very long.

“It’s going to people that don’t live in our neighborhoods, it’s going to people that don’t invest in our neighborhoods, it’s going to people that are not even interested in our progress. It’s going away from us. It’s not circulating among our people,” said Clingman. “How can you have a trillion dollars in income and not be better of than we are?”

Clingman said that it’s going to take collective compassion for the collective buying power to translate into economic progress in the Black community.

“We need more trust, respect, and love for one another. That sounds flowery and gushy, but that’s a very real issue among our people,” he said. “If we don’t have that, we’re not going to be willing to make the requisite sacrifices to move ourselves forward, collectively.”

The Death of Saint Paul's College

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By Freddie Allen
NNPA Washington Correspondent

WASHINGTON (NNPA) – Saint Paul’s College, a historically Black college founded in 1888 in partnership with the Episcopal Church, announced last week that it’s shutting down and working to help current students transfer to other institutions.

The school, located in Lawrenceville, Va., announced that it was closing after a deal that would have allowed Saint Augustine’s College in Raleigh, N.C. to acquire the struggling college collapsed under the weight of Saint Paul’s debt.

Already mired in debt, Saint Paul’s College terminated its sports programs in 2011 to cut costs. When the Southern Association of Colleges and Schools Commission on Colleges, a regional group that certifies degree-granting institutions, rescinded the schools accreditation last summer, administrators went to court to get it back.

Now, both the accreditation and the school are gone.

In a press release, Oliver Spencer, chairman of Saint Paul’s College Board of Trustees, wrote: “The time deadlines associated with our accreditation issues with SACSCOC and the termination of the proposed merger require our Board to take this action in the best interests of our students.”

According to news reports, approximately 200 students were enrolled at the school; 51 students graduated from in the spring.

A number of small HBCUs, many of them affiliated with religious organizations, are also at the risk of closing. For example, Morris Brown College in Atlanta, founded in 1881 by the African Methodist Episcopal Church (AME), was saddled with $30 million in debt, filed for bankruptcy to avoid closing. It lost it accreditation in 2002 and recently rejected a $10 million proposal from the mayor to purchase the campus.

“When you don’t have a large endowment, you’re dependent on tuition,” said George Cooper, former president of South Carolina State University in Orangeburg. “The trend in enrollment for a number HBCUs is on the decline, because families just don’t have enough resources to send their sons and daughters to school.”

Black families are reeling from the Great Recession that stripped half of their wealth and an unemployment rate that nearly double the jobless rate for Whites.

“The economic crisis that we see today impacts all universities,” said Cooper. “If you don’t get the students, you really don’t maintain the enrollment base necessary to pay the cost associated with running a university.”

Recent changes to the Parent Loan for Undergraduate Students programs made it even harder for parents with weak credit histories to qualify for the loan. Students who attend historically Black colleges and universities rely on the loans at a higher rate than other groups.

Johnny C. Taylor, Jr., president and CEO of the Thurgood Marshall College Fund, said those changes coupled with anemic alumni support likely crippled St. Paul’s, but that a number of factors likely contributed to its demise.

“It’s a very sad day when any historic institution has to close its doors when we know that there is significant need for higher education in the African American community,” said Taylor.

The lack of alumni support and feeble endowments often stifle the growth of HBCUs when enrollment dips. The National Association for Equal Opportunity in Higher Education (NAFEO), a non-profit group that advocates for HBCUs, estimated that Black colleges have average endowments that are about one-eighth the size of average endowments at White schools.

Even alumni and private support at top-tiered HBCUs falls woefully behind the support at top White schools. The combined market value of endowments at Howard University in Washington, D.C. ($460.7 million), Spelman College, in Atlanta, Ga. ($309.1 million) and Hampton University, Hampton, Va. ($232.5 million) were still about $29.4 billion less than the endowment of Harvard University in Cambridge, Mass.

“Unfortunately, in our community the only thing that we’re strongly socialized to give to is the church,” said Taylor. “That’s the biggest part of the problem.”

Taylor fears that it will take more closings of more HBCUs before the Black community wakes up and reacts to the crisis.

“It’s not going to happen until our community starts seeing a trend of HBCUs closing and no one is running to save them,” said Taylor. “Ultimately, the school and its alums have the responsibility to make sure that their [alma mater] continues to grant degrees.”

In the press statement about the closing, Spencer said that the board is “exploring all options” to keep the school open and to continue the school’s historical mission.

Spencer continued: “In pursuit of that goal I call on all members of the Saint Paul’s community to come together to guide and support the College in the next phase of its life in service to the many thousands of students deserving of the very special educational opportunities that Saint Paul’s College can offer.”

Trinidad Seeking to Find New Oil Markets in China

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By Bert Wilkinson
Special to the NNPA from the New York Amsterdam News

Fearing that the U.S. will, in the short- to medium-term, require reduced amounts of natural gas from Trinidad for its Eastern Seaboard states, the oil- and gas-rich southern Caribbean island of Trinidad is beginning to switch its focus to mainland China as it searches for new markets for its booming gas sector.

The U.S. is beginning to step up production of both oil and gas thanks to the relatively new hydraulic fracturing technology that now allows the industry to unlock behemoth amounts of supplies from underground sources that were previously unreachable through old-style drilling techniques.

In the past week, both U.S. Vice President Joe Biden and Chinese President Xi Jinping were in the twin-island Caribbean republic with Tobago for talks with regional leaders, but while Biden’s visit attracted the usual heavy domestic and international press, authorities in Trinidad made it plain that there was more value in the visit of the Chinese than the Americans.

Both Prime Minister Kamla Persad-Bissessar and Energy Minister Kevin Ramnarine said that the island’s cabinet had wasted little time in noting the rapid pace at which the U.S. oil and gas sector has been taking off in recent years, and industry talk suggests that the U.S. will be self-sufficient as early as 2020.

The result is that planners and experts are already seeing reduced demand for natural gas supplies from Trinidad to the U.S. in the near future and the need to open new markets. Critics say that this is the reason why the visit of the Chinese was more significant to both Trinidad and the regional trade bloc, as the Chinese offered less than a dozen bloc members nearly $3 billion in concessions and promised even more. Trinidad annually supplies as much as 60 percent of the gas needs of U.S. Eastern Seaboard states.

Specifically for Trinidad, the two cabinet members say that the Chinese market is paying “three times more” for natural gas than the Americans and can lap up all the supplies they can get in the medium- to long-term, unlike the Americans, who are heading for self-sufficiency despite widespread concern over fracking posing potentially serious danger to the water table and the environment in general.

“My government is actively seeking to penetrate new markets regionally and internationally. We see China as a key business partner and a potential new market for our energy products. Alternative and renewable energy research and development is also high on our developmental agenda, and we welcome the involvement of the Chinese in this area,” Persad-Bissessar said.

Ramnarine, on the other hand, announced that four shipments of liquefied natural gas had already been supplied to the Chinese, and “we expect this will increase.” Any expansion of the nearby Panama Canal will also help boost exports to China, he said. “The industry in Trindiad and Tobago has to evolve and stay competitive. We’ve drafted a national energy policy that is now being fine-tuned before being taken to cabinet,” he said.

The Chinese brought 280 persons to Trinidad and has extensive investments on the island.

Israel to Deport African Migrants but Won’t Say to Where

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Special to the NNPA from the New York Amsterdam News

Eritrean or Sudanese people, who have sought asylum in Israel.

Israel is reportedly in talks with two other countries to secure a similar agreement.

Few other details of the transfer were available. Israeli Army Radio reported that the unnamed country was in east Africa and did not suffer from any unrest that would harm the migrants. The Haaretz newspaper said that Israel had agreed to provide agricultural expertise as part of the deal.

The Supreme Court has ordered the government to provide details of the arrangement, including the name of the African country, within seven days.

Or Kashti, an analyst writing for Haaretz, condemned the deal. “As if it were an export company, the State of Israel is trying to ship tens of thousands of people from Eritrea and Sudan to other countries, out of sight and out of mind. The main thing is that they will fly away from here. Price isn’t particularly important, nor is their fate in their new countries.

“Israeli imperviousness, the turning away from the distress of others, marks a new stage that is far from surprising. This is a natural progression from the systematic disregard for claims of asylum that were filed to the embarrassing legal amendment that enabled the detainment in prison facilities and incitement bordering on dehumanization. What is being discussed aren’t humans, but objects.”

Fast Food Proximity Harmful to Minority Kids, Says Study

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Special to the NNPA from the Winston-Salem Chronicle

When their schools are near fast-food restaurants, black and Hispanic adolescents are more likely to be overweight and receive less benefit from exercise than Asian or white students, according to a study published in the current issue of Journal of Public Policy & Marketing.

Researchers suggest that the study underscores the importance of understanding how adolescents respond to fast-food availability near school.

“Our study demonstrates that fast food near schools is an environmental influence that has magnified effects on some minority children at lower-income urban schools,” said Brennan Davis, Ph.D., assistant professor of marketing at Baylor University, who co-authored the study with Sonya Grier, Ph.D., associate professor of marketing at American University.

Students attending lower-income schools on average have a higher body mass index (BMI) and consume more soda. Likewise, urban schools have students who on average have higher BMI and consume more soda. To put these results in perspective, the study found that for all students, having a fast-food restaurant a mile nearer to school almost entirely cancels the body weight benefits of exercising one day per week. However, for black and Hispanic students in lower-income urban neighborhoods, having a fast-food restaurant a mile nearer to school may cancel the benefits of up to three days of exercise per week.

“The findings imply that it is important to examine the behaviors and contexts associated with low-income and ethnic minority status in urban areas,” said Grier.“These populations not only are the fastest growing but also have the highest rates of obesity, and research is relatively limited.”

According to the study authors, the school environment is, more often than many other settings, one in which adolescents make food choices free from the family structure and parental control and can occur during lunch or before and after school. The study highlights the need to understand local targeted marketing strategies and outcomes according to income, ethnicity, and geographic segmentation. Many of the ethnic groups that are increasing in size and purchasing power, and are increasingly of interest to marketers, are also geographically concentrated.

The current study builds on previous research (American Journal of Public Health, 2009) by Davis and Christopher Carpenter, Ph.D., associate professor of economics and public policy at The Paul Merage School of Business, University of California, Irvine, which found that students with fast-food restaurants within one-half mile of their school consumed fewer servings of fruits and vegetables, consumed more servings of soda, and were more likely to be overweight than were youths whose schools were not near fast-food restaurants.

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