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Blacks still suffer financial inequality

This is a menu of the topics on this page (click on any): Dream a reality -- for some    Half of blacks left behind    Housing still segregated    Investment clubs popular    Haiti   .

By Jeff Ostrowski, Palm Beach Post Staff Writer, Sunday, August 24, 2003

If not for Martin Luther King Jr.'s dream, Roderick Powell figures, he'd be a teacher or low-level office worker -- certainly not a stock analyst whose résumé includes a stint as a top executive on a Wall Street trading floor.

"There's no way I would have been senior vice president at Banc of America Securities in New York City without the civil rights movement," Powell says. "Maybe I'd be in the mailroom, delivering mail to the senior vice president."

Powell hadn't been born that day 40 years ago when King stood on the steps of the Lincoln Memorial and described his vision of a colorblind society to 300,000 civil rights marchers.

Yet Powell considers himself a direct heir to the movement King led. Powell attended integrated schools as he grew up in West Palm Beach, then earned a master's degree in business administration from Florida State University.

Next came a career as a stock analyst and banker. Now a senior equity analyst at Weiss Ratings Inc. in Palm Beach Gardens, Powell ranks among the tens of thousands of middle- and upper-class blacks who live in Palm Beach County and the Treasure Coast.

Dream a reality -- for some

Many black Americans have prospered since King delivered his I Have a Dream speech on Aug. 28, 1963, in Washington. In the 1990s alone, blacks' net worth rocketed, as did their ownership of homes and stocks.

True, King's vision remains a dream deferred for a large number of blacks. Four decades after his historic speech, blacks remain far likelier than whites to be poor, jobless, uneducated and imprisoned.

But for the burgeoning black middle class, King's dream seems, at least in part, reality. Though Powell considers blacks' progress a glass half full, he acknowledges that when he looked around at the hundreds of people surrounding him on that Wall Street trading floor, he saw only a handful of black faces.

Such are the mixed feelings that accompany the economic strides made by blacks in the past 40 years.

Marlon White, a senior vice president and area manager for SunTrust Banks Inc. in West Palm Beach, sums up the paradox simply: "Progress has been made -- but not enough."

While White has done well for himself, he sees few other black bankers in Palm Beach County and a lack of banks and brokerage offices in predominantly black areas such as Riviera Beach.

Like Powell and White, Ann McNeill, a West Palm Beach native and resident who owns a Miami construction firm, has prospered.

Still, McNeill sees the glass half empty. Blacks lag other racial groups as entrepreneurs, she says, and the nation remains far from achieving King's dream.

"I want to say that things are better," McNeill says. "Unfortunately, some blacks believe that we have arrived, and they're no longer willing to fight for the struggle. Forty years ago, everyone was willing to fight, and the lines were clear. The lines are no longer clear. They're blurred now. And now you have young blacks coming up who know nothing about the struggle."

When King gave his I Have a Dream address, educated blacks worked primarily as teachers and preachers, with a smattering of doctors, lawyers and shopkeepers. Fully 55 percent of blacks lived below the poverty level in 1959.

"The Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity," King said at the beginning of his 1963 speech.

Half of blacks left behind

Today, that sweeping claim no longer holds true. By 2001, fewer than a quarter of blacks subsisted below the poverty level. And roughly half of blacks have accumulated enough wealth to be considered middle or upper class, although the other half still teeters on the brink of financial disaster.

For blacks, median household net worth -- the sum of homes, stocks and other assets minus mortgages and other debts -- nearly quadrupled from $5,300 in 1989 to $19,000 in 2001, accounting for inflation, according to the Federal Reserve.

Black home ownership and stock ownership have steadily risen, too. And blacks have climbed to the highest echelons of government and business. Some of the world's largest corporations -- Merrill Lynch, Fannie Mae, AOL Time Warner, American Express -- are run by black CEOs.

That's the good news. The bad economic news remains daunting: About 40 percent of blacks had net worths of less than $2,500 in 2001, according to the Fed.

Fewer than half of blacks own their homes, compared with more than two-thirds of whites. And unemployment for blacks was 11.1 percent in July, twice the 5.5 percent rate for whites, continuing the decades-long reality of high jobless rates for blacks.

Moreover, black-owned business took in far less revenue than firms owned by whites, Hispanics or Asian-Americans, both nationally and in Palm Beach County and the Treasure Coast, according to the 1997 U.S. Economic Census.

And black household income has lingered at about 60 percent of white family income for decades. In Palm Beach County, median household income for blacks was $30,808 in 1999, only 65 percent of the median white household income of $47,628, according to the 2000 Census.

"The wealth gap and the income gap are the remnants of segregation," Powell says.

In King's day, blacks in Palm Beach County and the Treasure Coast were forced to use separate water fountains, schools, bathrooms and beaches, to go to the back of the bus or to the rear entrance of restaurants. A black shopper who wanted to try on a pair of shoes at the Burdines in downtown West Palm Beach had to do so on the sidewalk.

Today, that strain of outright discrimination is not only illegal but socially unacceptable. Affluent blacks live in well-to-do neighborhoods from Boca Raton to Wellington to Palm Beach Gardens, and schools have been integrated, although not to the extent King envisioned.

Housing still segregated

In some significant ways, though, little has changed since King's speech. Although housing discrimination has been outlawed, segregated neighborhoods remain common. In Fort Pierce, for instance, a 2-square-mile section of the city north of Orange Avenue and south of Avenue Q is home to 31 percent of all the blacks in St. Lucie County, according to the 2000 Census.

The forces holding blacks in segregated neighborhoods now are financial rather than legal. As conditions have improved for blacks, the struggle's focus has moved from sit-ins and protest marches to a fight for economic equality.

"You can shop in stores. You can vote," Powell says. "Now it's an issue of money."

As Americans increasingly fend for themselves in savings and retirement planning, blacks have had to learn how to save and invest. Blacks have moved into well-paid jobs in large numbers only recently, making wealth accumulation a new topic.

"We are a consumer race," says John Howard, president of the Black Business Investment Corp. in Riviera Beach. "If we make $50,000, we spend $50,000."

Investment clubs popular

That's changing, though. Ann McNeill, for one, started her own investment club after she and some friends read the Beardstown Ladies' popular book about neighbors pooling their cash and knowledge to pick stocks. The number of black investment clubs here and nationwide has exploded, according to the National Association of Investment Clubs.

Just as many members of today's black middle class were the first in their families to attend college, they're often the first to put their faith in the stock market. McNeill's parents -- her father worked as a landscaper, her mother in a restaurant -- knew little about investing.

"My parents were not investors," McNeill says. "I attribute that to a lack of education on the subject."

But as black wealth has grown, so have the efforts by the financial industry to gain blacks' business -- and trust. BET and the Consumer Federation of America have teamed to teach blacks about saving and investing. The Investment Company Institute has a similar initiative, and Chicago stockbroker Jesse Brown has written personal finance books such as Pay Yourself First: The African-American Guide to Financial Success and Security.

Delray Beach stockbroker Erick Jeanty, a financial consultant at Brookstreet Securities Corp., sees opportunity both for himself and for black newcomers to the stock market.

Jeanty aims to win the trust of black clients by taking time to explain the basics of investing. Jeanty, a native of Haiti who moved to Delray Beach as a teen, visits churches to conduct investment seminars.

"More and more blacks are investing nowadays," Jeanty says. "To be a black person in the financial industry has its advantages."

Even as blacks grow savvier about wealth accumulation, financial gains remain shaky for many blacks. The economic downturn of the past two years disproportionately has hurt blacks, who tend to work in the most recession-prone jobs. And, as the large number of blacks living in poverty 40 years after the peak of the civil rights movement illustrates, King's dream remains far from reality.

"It's still a work in progress, unfortunately," says Howard of the Black Business Investment Corp. "We are doing better than we were."

jeff_ostrowski@pbpost.com

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