Financial Education: The Role of the Black Church in the Prosperity of the Black Community Tuesday, November 1, 2011 09:55:43
"Beloved, I pray that you may prosper in all things and be in health, just as your soul prospers." ~ 3 John 2.
By Philip Lowe
It is abundantly clear that God wants His children to prosper. How can anyone deny that? However, prosperity should not be the end in itself. It ought to be the result of a quality of life, commitment, dedication, and action that is in line with God's Word. In the above referenced text, the word "prosper" (Greek eudoo) literally means "to help on the road" or "succeed in reaching." It clearly implies that divine prosperity is not a momentary, passing phenomenon, but rather is an ongoing, progressing state of success and well-being. It is intended for every area of our lives: the spiritual, the physical, the emotional, and the material. However, God does not want us to unduly emphasize any one area. We must maintain a balance.
The relevancy of the above-referenced text to the condition of the church today and the community that it serves cannot be ignored. The facts bear out quite a different picture of the Black church and the Black community at large than what John�s prayer and God�s will expressed in 3 John 2. In the areas of wealth and health especially, questions can and should be asked of the condition of the soul that produces such woeful results as has been manifested in the Black church and in the Black community at large.
The Wealth Gap, The Great Recession & Unemployment
It is with respect to this point that I want to draw attention to the issue of prosperity within the confines of the Black community, and specifically with respect to the Black church from an economic perspective. The recent release of the Pew Research Center study on the growing wealth gap between Blacks and Whites, and the latest August 2011 jobs report showing a surge in Black unemployment during the month from 15.9% to 16.7%, a 27 year high, make examining the issue of prosperity, or the lack thereof, in the Black community a worthwhile exercise.
The Pew Research Center study found that the median wealth of White households is 20 times that of Black households according to newly released government statistics. These lopsided wealth ratios are the largest since the government began publishing such data a quarter century ago and roughly twice the size of the ratios that had prevailed between these groups for the two decades prior to the Great Recession that ended in 2009.
The Pew Research Center analysis finds that, in percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than Whites. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among Black households, compared with just 16% among White households.
As a result of these declines, the typical Black household had just $5,677 in wealth (assets minus debts) in 2009, the typical Hispanic household had $6,325 in wealth and the typical White household had $113,149.
Moreover, about a third of Black (35%) and Hispanic (31%) households had zero or negative net worth in 2009, compared with 15% of White households. In 2005, the comparable shares had been 29% for Blacks, 23% for Hispanics and 11% for Whites.
These alarming statistics are likely to grow exceedingly worse as the economy continues to show signs of weakening and with the threat of a double-dip recession looming large over us at the time of this writing. Given the decline in personal wealth experienced by Black households between 2005 and 2009, and with the convergence of economic forces that have led to the recent surge in Black unemployment, the immediate future does not look very reassuring for prosperity make a visit to Black America any time soon.
The release of the August 2011 jobs report by the federal government revealed a surge in Black unemployment to 16.7% in the very same month that White unemployment declined slightly to 8%, Latino unemployment remained unchanged at 11.3%, and the general unemployment rate remained at 9.1%. And it bares to note that government unemployment reports paint a far rosier picture than what actually exists. Actual unemployment numbers for Black Americans are estimated to be at least twice as high as officially reported and some say it�s as high as 50%.
Another report released in August shows that the majority, 64% of American households don�t have enough cash on hand to cover a $1,000 emergency expense according the National Foundation for Credit Counseling, or NFCC.
Only 36% said they would tap their rainy day funds for an emergency. The rest of the 2,700 people polled said that they would have to go to other extremes to cover an unexpected expense, such as borrowing money or taking out a cash advance on a credit card.
"It's alarming," said Gail Cunningham, a spokeswoman for the Washington, DC-based non-profit. "For consumers who live paycheck to paycheck -- having spent tomorrow's money -- an unplanned expense can truly put them in financial distress," she noted.
The NFCC poll did not differentiate between the racial compositions of the participants. But given the great disparity of wealth and income between Black households and White households, it is not unreasonable to assume how much more dire the circumstances for the typical Black household would be in the event of such an emergency. Emergencies such as those experienced by people who live paycheck to paycheck, as typifies the vast majority of Black households, leads many Black consumers to become victims of the payday and auto title loan industry that are dominating the financial services landscape of the Black community. In fact, it may be unfair to call payday and auto title loan companies financial services firms at all. They are not performing a service to the community in as much as they are doing a gross disservice to the community at large.