racial wealth inequality & black purchasing power illinois naacp state conference saturday,...
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Racial Wealth Inequality
&Black Purchasing PowerILLINOIS NAACP STATE CONFERENCE
SATURDAY, OCTOBER 25T H , 2014
DEDRICK ASANTE-MUHAMMAD
SENIOR DIRECTOR OF ECONOMIC DEPARTMENT
NAACP FINANCIAL FREEDOM CENTER
Race and Economics in the United States
Wealth in the form of land was appropriated from the Indigenous peoples of this country and enslaved Africans were imported to the
United States as the wealth of white Americans.
NAACP ECONOMIC DEPARTMENT 3
The Economic Foundation of the NAACP
Springfield, Illinois was a rapidly-growing industrial center at the turn of the century
Fierce job competition and the use of black workers as strike breakers during labor strikes caused increased tension
An attack by a white mob against the black section of Springfield spurred the creation of the NAACP
The Springfield Race Riot of 1908
NAACP ECONOMIC DEPARTMENT 4
Economic Justice was the foundation of 1960’s
Social Justice Movement Goals of The Freedom Budget
1. Abolition of poverty
2. Full employment
3. Full production / high economic growth
4.Adequate minimum wage
5. Farm income parity
6. Guaranteed income for those who can’t work
7. Decent homes for all
8. Modern health services for all
9. Full educational opportunity for all
10. Better social security and welfare
11. Equitable tax and money policies
NAACP ECONOMIC DEPARTMENT 5
Little Advances in Income Equality
NAACP ECONOMIC DEPARTMENT 6
What Happened? The Great Regression
NAACP ECONOMIC DEPARTMENT 7
The Economics of America’s Promise
NAACP ECONOMIC DEPARTMENT 8
Racial Income Inequality and the Great Recession
1977 to 2007 only about a 1% increase in Black / white income equity. 2007 to 2009 Black / white income inequality is increasing.
NAACP ECONOMIC DEPARTMENT 9
The Wealth Divide in the United States
Top 20%
Second 20%
Third 20%
Fourth 20%
Bottom 20%
60% of America doesn’t even have 5% of the nation’s wealth, while the wealthiest 20% has over 80% of the nations wealth.
NAACP ECONOMIC DEPARTMENT 10
State of African American Wealth
As of 2010, the Blacks held 13 cents of new wealth and Latinos held 12 cents of net wealth to every dollar Whites held.
NAACP ECONOMIC DEPARTMENT 11
EmploymentThis unemployment rate hides the larger number of African Americans not working full time or “marginally” attached to the workforce, this is normally about twice the unemployment rate.As many as 27% of African Americans between the ages of 20 and 24 are not employed or in school.
http://blogs.wsj.com/economics/2014/07/11/are-more-young-adults-falling-through-the-cracks/
For the last 50 years, in “good times” and “bad”, African Americans have had about twice the unemployment of whites.
NAACP ECONOMIC DEPARTMENT 12
African American Unemployment
Unemployment rate gaps between Blacks and Whites exist at every education level
Largest Black Markets
1990 2000 2010 2013 20180
10,000
20,000
30,000
40,000
50,000
60,000
Year
$ (
Mil
lions)
Illinois Black Purchasing Dollars
1990 2000 2010 2013 20180
100,000
200,000
300,000
400,000
500,000
600,000
Black WhiteAmerican IndianAsianLatino
Year
$ (
mil
lions)
Illinois Black Purchasing Dollars
Black purchasing power:
Is used as marketing material for corporations to invest in advertising to African American community
Does not take into account what is spent on credit and loans
Does not properly reflect income and spending, nor the wealth or economic mobility of our community
As those concerned about racial equity should use purchasing dollars to highlight our concern.
Understanding Black Purchasing Power
Why is there less power in purchasing?
Dual Incomes Mask stagnant wages
Dual incomes today < 1 income of the
1970’sDiscretionary Single income of the 1970’s is greater thanDiscretionary Dual Income of the early 2000’s
$42,450 > $73,770
Why $43,000 is more than $74,000
(after adjusting for inflation)
Declining savings
NAACP ECONOMIC DEPARTMENT 22
NAACP Economic Departme
nt
Thurgood Marshall Center,Washington D.C.
Twitter @NAACPEconFacebook – Like us @
NAACP Financial Freedom Campaign
NAACP ECONOMIC DEPARTMENT 23
NAACP Economic Departme
nt
Three Pillars: Empower local communities with the necessary
education, resources and partnerships to develop sustainable economic models that advance diversity and equity.
Ensure that government and industry are knowledgeable, and committed to bridging racial inequality particularly as it relates to employment, wealth, lending and business ownership.
Grow a movement of concerned citizens and organizations who work together to produce an inclusive and strong middle class economy for the 21st century.
NAACP ECONOMIC DEPARTMENT 24
NAACP Economic Departme
nt Economic Sustainability
The goal of our work is to extend equal opportunity to all
by way of economic success,
sustainability, and security.
NAACP Economic Game Changer
NAACP ECONOMIC DEPARTMENT 25
NAACP Economic
Department
Financial
Education
Fair Lending
Diversity &
Inclusion
Community &
Economic Developm
ent
NAACP ECONOMIC DEPARTMENT 26
Economic EducationFacilitates events around the country to educate local and state conference NAACP units on financial education topicsProvides grants to individuals to perform financial education at the local level
Diversity and Inclusion
1. Opportunity and Diversity Report Cards grade industries based on the strength of their workforce and supplier diversity.
2. NAACP and Dunkin Brands have partnered to strengthen diversity in franchising
3. The NAACP works with the Professional Development Network (PDN) to power the NAACP JobFinder and also Job Fairs around the nation to help facilitate employment
4. NAACP works with the United Negro College Fund (UNCF) to provide paid summer internships to students attending HBCU’s at Wall Street investment banks in a program called Gateway to Leadership
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NAACP ECONOMIC DEPARTMENT
NAACP ECONOMIC DEPARTMENT 28
COMMUNITY ECONOMIC
DEVELOPMENT
The Community and Economic Development Program establishes asset development infrastructure in communities of color leveraging the NAACP network and resources.
Wealth Creation
Strengthening Community
Assets
Job Developm
ent
NAACP ECONOMIC DEPARTMENT 29
Fair Lending
Monitors state and federal policy related to mortgage, auto, payday, and small dollar bank lending Performs analysis of Home Mortgage Disclosure Act (HMDA) for evidence of discrimination at the lender level Meets with bank partners around fair lending issues, products, and initiatives to reduce the un- and under-banked population Researches and evaluates data and reports to determine impact on racial inequality
NAACP ECONOMIC DEPARTMENT
NAACP Job Resources: Job Finder
How can you help?
•Spread the word about the NAACP Job Finder Website.
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www.NAACPJOBFINDER.COM to find the next job fair or the opportunities posted on the website.
The NEXT JOB FAIR IS November 4th in CHICAGO!
http://www.naacpjobfinder.com/events
NAACP ECONOMIC DEPARTMENT 31
NAACP Economic Partnerships
© 2014 Ocwen Financial Corporation. All rights reserved.
NAACP/OCWEN Partnership
Homeownership Preservation & Expansion in Communities of Color
October 2014
The NAACP’s Partnership with
Ocwen • The foreclosure crisis has had – and continues to
have – a disproportionate adverse impact on minorities
• Our partnership with Ocwen has two objectives:
• Outreach to assist struggling homeowners in communities of color
• Supporting mortgage reform and other policy initiatives that advance the interests of low-and-moderate income and other under-represented Americans
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Ocwen Financial CorporationIntroduction
Ocwen is a mortgage loan servicer with a portfolio of over two million homeowners nationwide
Ocwen has more than 25 years experience in the mortgage loan servicing business
Ocwen is not a bank Preventing foreclosures is good for homeowners,
loan owners and Ocwen’s business When loans go delinquent, Ocwen seeks solutions
that allow homeowners to keep their homes and yield positive cash flow for the loan investors
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Ocwen’s Efforts to Help Illinoisans Struggling with
their Mortgages Ocwen services more than 90,000 mortgage
loans in Illinois Since 2012, Ocwen has provided over 11,500
loan modifications to Illinois families in distress More than 9,300 of these modifications have
included principal write downs Average amount forgiven per loan: $69,563
In total, Ocwen has forgiven almost $651 million in principal in the state of Illinois
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Delinquent Loans: 13,828 Underwater Loans: 25,171
Delinquent and Underwater Loans: 9,816
*
. . . . But More Can Be Done In Illinois
Note: Data does not include loans on the ResCap platform
Many Illinois families are still stuck with underwater loans:
Sample of Highly Distressed Illinois Counties
* These homeowners are perfect candidates
for Ocwen’s Shared Appreciation
Modification (SAM) program
CountyLoan Count
Delinquent Count
Underwater Count
Delinquent & Underwater
Cook 47154 8066 14837 6121
Will 7416 1102 2063 746
Lake 6328 806 1523 538
DuPage 7592 761 1249 453
Kane 4779 573 1263 430
McHenry 3121 368 822 271
Winnebago 1472 215 407 155
Saint Clair 1602 227 423 142
Ocwen’s Shared Appreciation
Modification (SAM) Program
Unique principal reduction modification program designed for underwater mortgages
Provides built-in incentives for borrowers to stay current and mitigates losses for investors
Principal reduced to as low as 95% LTV and interest rate typically cut to 2%
Written down portion forgiven in equal amounts over three years so long as borrower remains current
Post-mod home value appreciation is shared if home sold or refinanced
75% kept by homeowner
25% to loan owner to reimburse for losses
Low re-defaults; High praise in community and government circles
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NAACP ECONOMIC DEPARTMENT 38
Owen’s Goals
Goals Ocwen would like to join forces with
NAACP regional members to collaborate on homeowner outreach and foreclosure prevention efforts
Ocwen seeks your expertise and help on
Effective ways way to connect with distressed homeowners in the neighborhoods you serve
Communication with Ocwen, including feedback on emerging issues, opportunities and challenges in your communities
NAACP ECONOMIC DEPARTMENT 39
Financial Freedom Campaign Media Presence
NAACP ECONOMIC DEPARTMENT 40
Economic Opportunity Website: NAACP.org/econ
The Economic Opportunity homepage includes information and resources on our economic programs. www.NAACP.org/econ
NAACP ECONOMIC DEPARTMENT
STAY IN TOUCH WITH THE
NAACP ECONOMIC DEPARTMENT
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Visit NAACP.org/econ and sign up for The Angle newsletter
Apply to become a Financial Freedom Campaign Micro-Grantee (State Conferences)
Like us at Financial Freedom Campaign on Facebook Follow us @NAACPEcon on Twitter Text Econ to 62227 for Mobile Updates Read The Crisis at thecrisismagazine.com Email the Economic Department at
[email protected] Call us at 202-478-6400
NAACP ECONOMIC DEPARTMENT 42
State Economic Chair Presentation
Information on 2014-2015 micro-grant award.
Proposed projects for 2014-2015.
Interaction with local units:◦What economic issues have you seen occurring in your area?
◦What plans do you have to address these issues?
State Conference and Local Unit Brainstorming
Session
Thank You, Questions?
DEDRICK ASANTE-MUHAMMADSENIOR DIRECTOR OF THE ECONOMIC DEPARTMENTHTTP://WWW.NAACP.ORG/ECONFINANCIAL FREEDOM CAMPAIGN ON FACEBOOK