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Black America's Economic Challenge: Overcoming Income Inequalities Through Better Consumer Choices

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By Charlene Crowell, NNPA Columnist –

(NNPA) The agency mandated to provide Congress with impartial, non-partisan and timely analyses seldom makes headline news. But this week when the Congressional Budget Office (CBO) released findings on its analysis of the nation’s income inequalities from a 30-year review (1979-2007), media coverage exploded.

After assessing the net income shares of people in 525 cities and towns, the agency’s top-line finding was reminiscent of lines from a Broadway production, “There’s no shame in being poor – but it’s no great honor either.”

According to CBO, the nation’s top one percent of household income more than tripled during these years, while middle class households either slipped into poverty or barely held on to their standard of living. Middle class income earners representing 60 percent of the population accounted for only 40 percent of after-tax household income. And among America’s lowest earning workers – about 20 percent of the population, the growth in average real after-tax household income was only 18 percent.

In part the report advised, “The rapid growth in average real household income for the one percent of the population with the highest income was a major factor contributing to the growing inequality in the distribution of household income between 1979 and 2007. Shifts in government transfers and federal taxes also contributed to the increase in inequality.”

A plain English translation of this finding seems to be that the 30-year span of trickle-down economics at work has not brought a drop of prosperity to 99 percent of the nation. No wonder the nation has seen a groundswell of demonstrators referring to themselves as the ‘99ers’.

For African-Americans in particular, these ill-advised policies have been particularly painful – unemployment rates double that of the rest of the nation, neighborhoods dotted with foreclosures and short-sales, a lack of affordable housing for former homeowners, and for those lucky enough to still have a job - incomes trailing the rest of the nation.

If there was ever a time ripe for change, it surely must be now. We cannot continue along the same 30-year path that has led to such pathetic results. The nation needs the return of a robust economy and a time when vigorous enforcement from our federal consumer-watchdog agency convinces more businesses to become more consumer-respectful.

It is equally important that as consumers of color we direct our dollars to education, businesses and enterprises that value all we bring to the marketplace table. According to the Nielsen Company’s recent report, The State of the African-American Consumers, 43 million African-American consumers together represent nearly a trillion dollars of purchasing power each year.

Before Black Friday, the day following Thanksgiving and traditionally the busiest retail shopping day of the year, African-Americans have the opportunity to be better stewards of the purchasing power we hold in our own hands. We can and should use our economic clout to forge new awareness and respect for our economic strength. Moreover, that strength would best be shared with those that value our choices in every purchase or investment.

If lenders are reluctant to offer transparent transactions that inform us before a debt is incurred, we need to walk away with our money, our credit and our self-respect. Whether the product is a new credit or debit card, auto financing, or a mortgage, we must remember that loyalty in business should be earned – not given away.

No one has or ever will beg their way out of poverty. But by becoming wiser consumers, we can begin to carve our own path to prosperity.

Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at: Charlene.crowell@responsiblelending.org

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0 # Guest 2011-11-08 10:27
Dear Justiceforall,

The "work hard and you will be successful" dream, also known as the "American Dream" has been rendered nearly impossible and certainly improbable by our education, tax, and racist policies. The fact that our schools are as segregated as they were during the 50s and 60s and the disproportional number of those "black" schools being underfunded, understaffed and hopeless environments cannot be blamed on "those people who don't work hard." Evidence of our failures can be seen in our low rank on international measures of education as well as in the fact that your "American Dream" of social mobility is more often found in Canada and most European states than in America. Please do your research before blaming those who are the victims of bad policy.
+1 # Guest 2011-11-02 16:33
Actually, 21% if you read the CBO report and 51% did not have enough income to pay federal taxes. However they do pay sales tax, social security and medicare taxes. In fact, for some poor people, their tax burden is higher than the rich who receive income from capital gains.

Also luck does have something to do with it. These people benefit from a system supported by taxes from everyone (sales tax), why should they be the only ones to prosper.

Working hard does not guarantee success, but before this recession, it would usually guarantee a middle class life.
0 # Guest 2011-11-02 14:01
This article and many like them fail to mention that the top 1% makes 20% of all income in the US. Now the punishment for being suscessful is they are "lucky" enough to pay 38% of the taxes paid! 51% of all Americans do not pay any tax, that is why the middle class is screaming mad. Who really isn't paying their fair share? Do not hate the rich, work hard to be more like them.

BVN National News Wire