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.

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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

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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

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Little Advances in Income Equality

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What Happened? The Great Regression

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The Economics of America’s Promise

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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.

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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.

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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.

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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.

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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

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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.

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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

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NAACP Economic

Department

Financial

Education

Fair Lending

Diversity &

Inclusion

Community &

Economic Developm

ent

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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

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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

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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

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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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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

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Financial Freedom Campaign Media Presence

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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

econprograms@naacpnet.org Call us at 202-478-6400

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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