Episode 6: Black-enomics
Julianne Malveaux—an MIT-trained labor economist, social commentator and former president of Bennett College, the oldest historically Black college for women in the country—recounts the longstanding factors that often contribute to Black women feeling “stuck.” From being overburdened with financial and personal obligations to family and student loan debt to nonexistent generational wealth and limited access to financial education opportunities, the cycle of economic instability can seem endless.
In The Gap was created with the support of the Leonard C. Goodman Institute for Investigative Reporting and In These Times magazine. Contact the show at email@example.com.
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CHANDRA THOMAS WHITFIELD, HOST: Welcome to In The Gap, a podcast about how and why Black women aren’t getting their green. I’m your host, journalist Chandra Thomas Whitfield.
On this podcast we’ve talked a lot about some of the many ways that Black women say they feel undervalued and undercompensated on their jobs, like being paid less than their white counterparts, being denied promotions and experiencing discrimination due to the color of their skin and sometimes due to pregnancy and motherhood.
But those issues are just part of the systemic economic injustices that Black women often face. So today, we’re pulling this back further and looking at the bigger picture, something called the wealth gap.
MALVEAUX: When we look at averages, what we must look at is the extent to which African American women have been locked away from wealth opportunities. And it goes back to our history, our heritage, predatory capitalism and economic exploitation. All of that is part of our history and heritage.
WHITFIELD: That’s our guest today, Dr. Julianne Malveaux. She’s an MIT and Boston College trained labor economist, social commentator and the former president of Bennett College, which is America’s oldest historically Black college for women.
Dr. Malveaux is going to join us today to talk about the many contributing factors that often keep Black women from accumulating wealth. Now, wealth means everything you own: your house, your car, your savings, minus everything you owe, so student loans, credit cards, pretty much everything.
So here’s a statistic, the median wealth for single white men, and this is according to a 2017 report by the Closing the Women’s Wealth Gap initiative, the median wealth for white single men is about $28,900. For single Black women, median wealth is $200. And for single Black mothers, it’s zero dollars.
So, if you’ve ever heard or seen Dr. Malveaux, you probably already know that she breaks it all the way down. Like let’s just say in this case, the numbers are pretty dismal and disappointing. Let’s just jump in.
And we welcome Dr. Julianne Malveaux to In The Gap.
MALVEAUX: It’s so good to be with you. I think this is such a great project, we need to talk more about these gaps that exist. White supremacy has penetrated every institution of our society and it’s something that we have to fight.
WHITFIELD: My first question is, the gender pay gap in Black women. As an economist, what are your immediate thoughts when you hear that?
MALVEAUX: African American women work harder and longer, and are paid less. That’s the bottom line. And we can slice it and dice it and talk about it in any kind of way, but that’s really the bottom line.
So we are looking at institutionalization of white supremacy that’s played out through predatory capitalism. And you can see it in terms of, when you look at the wage data, it’s repugnant to see how little so many Black women are paid.
WHITFIELD: I know in your work, you’ve referenced federal government releases data every so many years, one is the Survey of Consumer Finances, and that most recent report, it basically concluded that wealth rose for American families, but not so much for families of color. What are your thoughts about how to Black women fit into that reality?
MALVEAUX: Well, there have been several reports that suggest that by the year 2050, African American people will have negative wealth. So basically, there, there are two ways that we look at this. One is to look at individual wellbeing, and the other is to look at social economic justice from a societal perspective.
You know, a lot of people are talking about financial literacy, which I think is important, but it doesn’t solve everything. So when people talk about financial literacy, they’re talking about being a better manager of your money. And certainly, that’s something that we should all be aware of, being better money managers.
And there are lots of ripoffs out there, there are lots of predatory interest rate things, there are lots of ways that you can get ripped off, and people of color, and especially women of color tend to be less knowledgeable about these things. So that’s one way to look at all of this.
But the other way to look at it is to look at what all of this means in terms of social and economic justice. What do I mean by that? When you have structures that make it difficult for people to organize, in unions, it’s gonna be difficult for them to get their share of the pie. When you have structures that encourage discrimination, that’s going to be difficult for that group of people to get their share of the pie.
When you look at, let’s say, the United States Senate and see that we’ve, in our history had, what, two Black women in the United States Senate, what does that mean in terms of public policy? We look at the Fortune 500 CEOs, we may have had three or four Black women who’ve been fortune 500 CEOs, what does that mean? And so, while on one hand we want, I want everybody to be a better steward of their financial resources, but being a good steward of your financial resources will not close the wealth gap.
WHITFIELD: There’s also that huge study that came out in 2010 stating that single Black women, ages 36 to 49, on average have a median net worth of $5 compared to over $40,000 for white women.
MALVEAUX: Exactly. I mean, again, but what we’re dealing with is intergenerational wealth, who inherits what when and how. It’s also your entire portfolio of family and friends. What do I mean? You may be a Harvard educated lawyer, but Pookie and them are calling you every month to help with the phone bill.
But the bottom line is you have another drain on your income that comparably educated white folks, frankly, don’t have. In terms of our extended families, there are more challenges. In terms of our elderly moms and dads, there are more challenges.
WHITFIELD: The research shows that Black women are literally drowning in student loan debt.
As a former college president, like what are your thoughts on that about Black women’s pursuit of higher education, but the price they’re paying financially?
MALVEAUX: Remember that earlier, we were talking about the wealth gap, we were talking about, basically, what have Black women inherited? What are the resources Black women have to make it easy for them to be educated? And the answer is, if you look at inherited wealth, very little. So where are Black women gonna get the money from, to go to college?
But basically, there’s almost $1.6 trillion worth of student loan debt out there now. Young people in the United States owe more on student loan debt than they owe on mortgages. The issue is, especially in the Black community, but basically among working class people, people have seen higher education as the path to a better life, to better jobs, opportunities, and so people have been willing to essentially mortgage themselves to get a BA, MA, PhD, because they see that as the path. In many ways it is the path. In fact, when we look at earnings, what we know is that let’s say a sister with a high school diploma is going to earn probably over the course of her lifetime, probably $750,000 less than a sister with a master’s degree, but that’s on average.
So you know, there are going to be exceptions. Either way, they’re going to be some people who drop out of high school and become millionaires because they’re brilliant with computers or something. We’re looking here at averages. But when we look at averages, what we must look at is the extent to which African American women have been locked away from wealth opportunities, and it goes back to our history, our heritage, predatory capitalism and economic exploitation. All of that is part of our history and heritage.
You know, for the longest time Black women basically have done whatever they could to get educated. I remember, if I go into my own family history, back in the day, I had two great aunts who went to school every summer to get six credits at UCLA so that they could get a little bump in their little salaries in segregated schools in Mississippi.
Black women have always been into education, if you look at our sororities, the majority of not involved in the educational system have tangential connections to the educational system, so we have always been involved in education, but we haven’t always had the funding. Now, in the last 20 years, maybe 30, in the last couple of decades, we’ve seen the cost of college increasing at an exponential rate. So whereas inflation might be 2-3%, cost of attendance has been going up by like, you know, 5, 10, 12%.
And as a former college president, I get it. I mean, your costs are going up. I mean, you know, your salaries, you need to pay people more, your utilities, all of that. But the fact is that we have less support from both the federal and state governments for higher education than you’ve ever seen before.
So when the Pell Grant was passed, it was designed to cover essentially the cost of tuition. Now, the Pell Grant is not $6,000 yet, and it doesn’t cover the cost of tuition at the majority of our nation’s colleges. So if you want to go to college, your parents are either paying for it, and we know what the class distribution of the Black community is, or, essentially, you’re taking out loans, or your college has provided you with some scholarship funds.
WHITFIELD: Well, I know one thing that I’ve found interesting that you’ve said is that building wealth or the lack thereof, is that a lot of African American women who are heading their households are actually sacrificing building wealth to put their children through college. So to some degree, this selfless act of trying to ensure that their children have a future, but almost to their own detriment and being very behind in building any type of wealth or savings or anything of that nature.
MALVEAUX: That’s a huge issue. And it’s a huge intergenerational issue that many of us are dealing with right now. In other words, if I’m, well, I am 66 years old, I have saved for my retirement, and here comes a 25 year old relative who says, “Can you help me with my college?” Am I going to cut my retirement funds to help my young relative with college? Do I feel more obliged to do so if they’re actually my child as opposed to a nephew or niece or something like that? What impact does that have on my future?
And many parents feel extremely responsible for their young people. And so they’re willing to make that sacrifice but increasingly, financial writers are asking, “Are those young people gotta be willing to make the sacrifice back?” I take out a loan on my house to pay for your college.
Are you gonna help me pay back? I mean, it’s a legitimate question. I’m not saying how people should decide it, everybody’s circumstances are different, but historically, we’ve looked at investing in and why is this an individual burden when it ought to be a societal burden?
The Pell Grant should cover the full cost of attendance. The Pell only goes to the poorest folks, folks with incomes of less than $35,000. And the average income by the way for African American households is about that. It’s about $38,000. So you know, if your income is $38,000, how are you paying for college when the cost of attendance at, let’s say Bennett College, is $25,000? These all become issues to talk about in terms of how people both manage their personal finances and how they manage their basically social and economic justice issues. And they’re connected, but they’re not the same thing.
So you will find a lot of African American financial guru types who will say things like, “Don’t pay for your kids education, let them pay for themselves or take out more loans.” You have folks who, basically everybody has a different spin on it, but a lot of people— like, “Let your child go to community college for two years and then transfer to a better school cuz they’ll still get the diploma from there.” You’re gonna get a lot of different opinions on what people should do.
But we have to look at it both from a generational lens and from a historic lens. To me it boils down to public policy. We need to make sure that government, especially, is more heavily vested in education and especially higher education, but also vocational training.
WHITFIELD: Absolutely. Well, I know one of the things you’ve spoken widely about is just contributing factors and you’ve noted that Black women disproportionately work in service occupations, you know, jobs where the pay is low, where there are often not sufficient benefits, no pensions, there’s no 401k where the employer is deducting or matching, sometimes not even health insurance. And obviously we all heard the nightmare stories of how an illness can wipe you out can bankrupt you overnight.
MALVEAUX: People have as much information as they can about the economy so that they’re prepared to become economic warriors. So we’re not just looking at government’s investment, higher education, we want to look at things like pricing. Why has the Congress weakened the Consumer Financial Protection Bureau? Which basically, under President Obama, governed how much interest you could charge and things like that. Much of that has been rolled back under 45.
But we need to be aware of how people are able to extract predatory profits from the system so that we can fight that more systematically. And then always, although it’s not the policy piece, but it’s also the importance of the personal piece, people need to be armed to get the best deals they can.
So you know, we’re looking at the macro, in terms of public policy, but we’re looking at the micro in terms of how you live your life. And then by that, I mean, why do you have a credit card with an 18% interest rate? Well, you can get one with 12? So why are you banking someplace where you’re not getting any goodies when the bank next door gives you goodies, $200 when you open up an account? So that that’s really about financial literacy, which is different from economic justice. They’re connected, but they’re different.
WHITFIELD: So any closing thoughts remarks on this? Can you leave us with the word to reflect on?
MALVEAUX: When I think about Black women in the economy, the person I think about the most is Maggie Lena Walker. Maggie Lena Walker was a Black woman in Richmond, Virginia, who, first Black woman to charter a bank, in 1903. It was initially called Penny Savings Bank, it then changed to Consolidated Savings Bank. She gave a speech I think in 1905 or 6 called Benaiah’s Valor. And Benaiah is in the Bible. She talks in this particular speech about basically making the most of our own economic development opportunities.
Now, personal economic development does not solve the wealth gap, does not close the wealth gap, but there are so many of us who could be so much more savvy about what we have and how we use it. And so Maggie Lena, to me, is just, she’s a hero of mine, because of her starting this bank, of talking a lot about interest rates, “If you take care of the pennies, the dollars will take care of themselves,” and so many quotes like that. She was really committed to Black women’s economic development. And by that I mean that she was also committed to making sure that Black women had better employment opportunities.
At the time that she started her bank in 1903, most Black women either worked, in Virginia, either worked as maids, or in tobacco. Those were pretty much the jobs. She created jobs for clerical workers and for others, not a lot of jobs because it was a small enterprise, but basically part of her thinking was, “We want to do something that’s different than putting Black women into maids jobs.” So she basically worked very hard to find alternatives for us, she started a department store.
And so what I would say is we have people in our history who have talked about and lived successful economic stories. What I would leave us with is to learn about Maggie Lena Walker, and lift that story up. Learn about Cathy Hughes, [TV One and Radio One], and lift that story up. No, it isn’t equal but we do have role models and people who have stood in the gap and done their best to ensure that we had opportunities.
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WHITFIELD: We truly have to thank leading labor economist Dr. Julianne Malveaux for joining us and sharing her insights. She just has a way with words, what can I say, and numbers, doesn’t she?
Well that’s it for today. As always, our show was reported and produced by me, Chandra Thomas Whitfield, and edited by Kristen Aldridge and House of Pod. Our music is Convoy Lines by Blue Dots Sessions. In The Gap was created with the support of the Leonard C. Goodman Institute for Investigative Reporting and In These Times magazine, which has been covering issues of equity and social justice since 1976. To learn more about In The Gap and the pay gap for Black women, go to www.inthesetimes.com/inthegap.