Judging by the U.S. Census’ 2010 survey of business owners, African Americans have essentially created businesses, but not jobs.
Since the recession hit in 2008, 60.1 percent of black males between ages 20 and 34 have been employed at some point. In 2001 the number was 71.6 percent. And those who are employed make less money than before. In terms of all demographics, African American household income is half that of white and Asian families.
On Saturday, March 12, from 9 a.m. to 4 p.m. the African American Chamber of Commerce of New Jersey, together with The Edward J. Bloustein School of Planning and Public Policy at Rutgers, will present “Improving Economic Development Outcomes in New Jersey’s African American Community: Challenges and Goals for the Second Decade of the 21st Century” at the Cook Student Center, 59 Biel Road, New Brunswick. Admission is free. For more information, contact AACCNJ project manager Stephanie Gillette at 609-571-1620 or visit www.aaccnj.com
The event features prominent representatives from academe and business sectors including telecom, retail, financial institutions, food, and economic development. Lieutenant Governor Kim Guadagno will give the keynote address. The event includes a panel featuring William Rodgers of the Bloustein School and chief economist at the John J. Heldrich Center of Workforce Development. Rodgers also is a senior research affiliate of the National Poverty Center at the University of Michigan.
Rodgers served as chief economist under U.S. Secretary of Labor Alexis M. Herman in 2000. During the 2000 presidential election he represented the United States at the G8 Labor Ministers’ meeting in Turin, Italy. Rodgers holds a Ph.D. and a master’s in economics from Harvard and a master’s in economics from the University of California at Santa Barbara. He earned his bachelor’s in economics from Dartmouth.
The son of an engineer and social worker, Rodgers spent his high school years in a suburb of Rochester, NY. His parents still live in upstate New York. His father’s career gave the family versatility to move around.
Rodgers was born in Washington, D.C. At age 5 his father moved the family to New Hampshire for two years as he attended Dartmouth for his master’s in engineering. Following that the family moved to the Houston area as Rodgers’ father took a job with Exxon.
The motivation to pursue economics came from an internship for Democratic New York Senator Daniel Patrick Moynihan’s office in Washington, D.C, which was run by a young Tim Russert at the time. Rodgers, a model U.N. member in high school, had been more interested in politics than economics. His baptism into the world of Washington was watching people in Senator Moynihan’s office analyze legislation and begin projects. But what resonated most with Rodgers are scenes he recalls outside of the White House.
“It was 1982, during the worst recession we had seen since the Great Depression,” Rodgers says. “I would take the bus home from the Capitol to my friend’s home in D.C. The bus went up 16th Street and at that time it would go right in front of the White House, and I remember distinctively seeing so much homelessness in the middle of winter. Homeless people slept against the gates surrounding the White House and that left such an impression on me.”
From 1993 to 2003 Rodgers was at the College of William and Mary in the D.C. area as an economics professor and later as director of the Center for the Study of Equality. He says that African Americans made the most gains in the 1990s, when 22 million jobs were added to the U.S. economy and the overall unemployment rate was 3.9 percent.
“The key to that growth was the rate staying low along with the Federal Reserve’s set interest rates for a period of 24 months or more,” Rodgers says. “Now with the Fed we are most concerned with inflation if it raised rates.”
Lower rates and a healthier economy increase banks’ willingness to lend to businesses and households, he says. Small borrowers have few sources of credit other than banks, but for minorities access to capital has been the most menacing of barriers to get past before they can set up shop.
Rodgers says he would like to see more microfinance programs extended through outreach and nonprofit sectors — an alternative to the self-financing approach most minorities take when starting a business.
Integration into Main Street. Economic literacy is paramount, as is a focus on monetary and fiscal policy, pre-entry strategies for developing businesses, and the development of soft skills for individuals at an early age, Rodgers says.
Black-owned businesses are likely set up around predominantly urban minorities. They cater to customer segments and bases with too-thin pockets for them to gain any growth potential. According to the census, black-owned businesses on average gross $72,000 yearly, compared with $179,000 for other minority businesses and $490,000 for non-minority businesses.
Some good news to surface from the census was that the number of black-owned businesses in New Jersey rose 66 percent between 2002 and 2007. But fewer than than 2 percent of New Jersey’s black-owned businesses have more than five employees. Nationally and in New Jersey, nine in ten black-owned businesses can be categorized as “nonemployer firms,” meaning that they consist of just one person.
Yes, smaller balance sheets can be attributed to the fact African-American businesses are smaller and younger than most other companies. But inherent setbacks that prevent African-American businesses from growth can be anything from insufficient capital to undertrained management and location.
One organization that took action in response to this cycle is the National Urban League, which focuses on trying to get minorities and urban communities to be part of integrated technology, including digital and online retail, as well as green jobs.
“What’s unique about this approach is that once businesses get on their feet they would be selling throughout the city and throughout the metropolitan area, so you’re not limited anymore,” Rodgers says. “The key is diversify, diversify, diversify.”
New Jersey has a tremendous amount of occupation segregation by race. Minorities tend not to be in occupations where hiring decisions are made.
And many African Americans do not have the technical skills or resources available to find jobs posted online.
“Therefore they’re less privy to knowing about new opportunities,” Rodgers says. “With a focus on technology we can give our young adults the education and training they need to compete in the high-tech world we live in,” says Rodgers.
Soft skills. One area in which Rodgers sees a need for African American youth to develop is in the soft skills: communication, interaction, and presentation. He feels that given the decline in manufacturing and hard labor employees must interact with customers and present their professional images well.
As a professor at Rutgers, Rodgers is familiar with the lack of those soft skills in his students. “You have kids come in and just sit and take notes,” he says. “In reality they’re going to need to interact. The majority of jobs require you to look the person you’re talking to in the eye, they require you to smile, they require you to have your pants pulled up around your waist, and you need to be punctual.”
The need for advocates. Rodgers and his wife, Yana, also an economics professor at Rutgers, are always looking for new ways to educate and propel the public. Much of his outreach comes through volunteer work with the United Ways of the Greater Tri-State Area, where he mentors African Americans.
“More than mentors, I’m really big on what I call advocates for your success,” Rodgers says. “An advocate is someone whose success is connected to your success. A mentor could be an advocate but they could also be your friend, a parent, a co-worker.”
Having a network of advocates is important because they can maintain high expectations of you. “Interacting with people who come from different walks of life can help you understand that you can be the great entertainer, but at the same time make sure you’re doing your schoolwork.”
Role models help too. Because of the election of President Obama, Rodgers hopes that more young African-Americans in high school or college will be inclined to study fields such as government and economics.
“But I think you have to go back even earlier because a variety of courses we can talk about have roots in basic math or science,” he says. Rodgers feels the connection to economics and policy is best made early on, especially as time has dictated a new beginning for African-American national stature. Think about children who are entering school right now.
“It’s so remarkable that all they would know is a black president, even more so with two terms,” he says. “Ten years from now you could have a cohort of black children all grown up and two-thirds of what they’ve seen in their K-12 experience was a black president.”