Today’s episode discusses the history of Black entrepreneurship in the United States and sheds some light on why it is crucial for people of color to start their businesses. There is still a distinct gap in wealth between white and Black people in the US.
The truth is that there are many examples of Black entrepreneurship in the US after slavery was abolished. Black folks had unique skills they monetized to serve their communities. These efforts grew into a diverse set of businesses, including banks, restaurants, and insurance companies.
However, alongside this trajectory of Black entrepreneurship runs a parallel thread of sabotage by white folks looking to derail people of color on the road to financial freedom.
This episode gives listeners an important history lesson. You’ll also hear about some of the earliest and most remarkable examples of Black entrepreneurship, including the story of Robert Reed Church and the Solvent Savings Bank and Trust. You’ll also learn about some of the biggest oppressive maneuvers conducted by white people, such as the Greenwood Massacre, the mismanagement of the G.I. Bill, and Redlining.
Entrepreneurship is in our DNA as Black people, and by following this path, we can empower ourselves, our families, and our communities.
What You’ll Learn On This Episode:
- [01:18] History of Black entrepreneurship today
- [02:45] The importance of being an entrepreneur as a person of color
- [03:46] Metrics for the bleak economic situation for BIPOC in America
- [09:33] Debunking the myth that Black people don’t work hard enough
- [11:05] Using money from Black-owned businesses to fund politicians who support Black interests
- [11:59] A history of Black entrepreneurship and oppression in The United States
- [13:00] Reasons for the wealth gap: the Greenwood Massacre and more
- [20:21] Which kinds of businesses Black people have owned historically
- [20:50] The story of Robert Reed Church and Solvent Savings Bank and Trust
- [21:47] How Black entrepreneurship and wealth is a form of giving back
- [23:20] Building a business in a way that allows you freedom in life
- [25:21] Important facts and the benefits of being a part of the Transcend community
- Learn more about the TRANSCEND Community
- Get the New Business Checklist for free
- Check out the book The Color of Law
Connect With Us:
- On Instagram | @ashawilkersonesq
- On Facebook | @ashawilkersonesq
- Connect with Asha on LinkedIn!
- Subscribe to our YouTube channel!
“AW: Initially in the United States, who was the labor force? It was the enslaved Africans that were the labor force, the manual labor force. Who’s the labor force now for the most part? Primarily LatinX Immigrants are the labor force. The misnomer, the idea, the stereotype, that’s out there, that Black and brown people don’t want to work hard is a complete myth, complete myth. We literally have broken our backs to build this country.”
[00:00:31] AW: You’re listening to The Transcend Podcast. I’m your host, Asha Wilkerson, an attorney by training and an educator at heart. This podcast is all about empowering you to build a business and leave a legacy. Here’s the thing, the wealth gap in America is consistently increasing and while full time entrepreneurship is not for everyone, even a side hustle can change your financial landscape if you’re intentional about using your business to build wealth. I’ve run my own law firm for over 10 years and in that time, I’ve helped countless California businesses go from idea to six figures. On this podcast, we talk about what it truly takes to build a sustainable business and find financial freedom. Let’s dive in.
Welcome back to another episode of Transcend the Podcast. I am really excited about this episode. I think I say that for every episode. But this time, well, I mean it every time. I’m especially excited about this one, because I want to talk to you about the history of specifically Black entrepreneurship in the United States. I can talk about other types of entrepreneurship or entrepreneurship from other groups. But I want to start with Black entrepreneurship in the US, because historically laws have been made to challenge, specifically Black ownership and Black autonomy, since Black people were transported to this country and that has trickled down and affected all people of color in all minority groups, whether you are gay, or straight, or non-binary, or an immigrant or not or brown or disabled.
Any kind of difference in this country, you can see the roots in a lot of the discrimination with how Black people were treated in this country. I think that it is so important for you to be an entrepreneur, especially as an entrepreneur of color, because of the very particular history and the way that people of color have been treated in the United States. So I’m going to start with explaining the history of Black entrepreneurship to you.
One of the things that I think that is a disservice with our media right now, is that anytime you turn on the news, if you want to feel bad about something, turn on the news, you will see gun violence, you will see death, you will see people losing their homes, you will see the rich getting richer and the poor getting poorer. If you want to drop your mood just turn on the news to any local news station in the United States. But I’m here to tell you that it wasn’t always like that.
These are just a particular subset of stories that are told about our people. I want us to understand why it is so important for us as people of color as minorities, to be in positions of power, building our own wealth and our economic, which is the same thing as financial freedom and just our autonomy, to be in the street to be loud and proud to do what we want have what we want and to fully express who we are.
Before I get into the history though, I want to give you a few sets of numbers that I’m going to have to read from my cheat sheet here. I did a little bit of research, just to understand why, although it may seem we are getting into higher and higher positions, it’s true, that our overall economic situation is not okay. I believe that one of the fastest ways to change that is through business ownership that is intentional about creating legacies of wealth. So let me just tell you this, the typical net worth or the net worth for typical white family is $171,000. That was from a study done in 2016. The net worth of a typical Black family is 17,150. 171,000 versus 17,000. Both of those are from 2016, like that doesn’t even make sense. That’s over a $150,000 gap of net worth.
Arguably, both groups of people have been in this country for the same amount of time. Obviously, under different conditions right? Obviously, under different conditions. But there’s no reason in the world why the gap should be that big, but there is. We can actually trace the history back to not being allowed to own land, to not getting loans for businesses. For the government coming in through eminent domain and building roads and items through communities, Black neighborhoods, Latino neighborhoods, indigenous neighborhoods and lands. Think about that. Right?
I have a few more numbers for you. These are coming from the Federal Reserve Board. They did a 2019 survey of consumer finances. These numbers are for people who are most likely to receive inheritances. 30 percent of white families leave in inheritance, compared to just 10 percent of Black families, and 7 percent of Hispanic families. Then 18 percent of other families leaving inheritance. I’m not exactly sure what they have considered other. I also want to say that Hispanic is the term that the study uses, as opposed to LatinX. So I’m going to use Hispanic to stay consistent with the study, even on my own language, I use LatinX.
Again, 30 percent of white families leaving inheritance compared to 10 percent of Black families and only 7 percent of Hispanic families. What did I say that we need to do earlier, build a business that is able to leave a financial legacy. I am sure if you’re listening to this, you have probably felt like each generation has had to start over from scratch. We are grateful for the shoulders that we stand on for the sacrifices that our parents and grandparents and great grandparents made, so that we can be here today doing what we’re doing, exploring our own entrepreneurship, but also let’s make sure that we turn that corner and instead of making our kids work as hard as we did to survive, let’s give them a little leg up. The way to do that is through an inheritance.
How about this one? What percentage of people do you think could actually get $3,000 if they needed to borrow it from friends or family? 72 percent of white families have $3,000 to loan to a friend or another family member, compared to only 41 percent of Black families. It’s a little bit higher for Hispanic families, 58 percent and 63 percent for all other families. So just to be able to borrow $3,000, 72 percent of white families can get it compared to only 41 percent of Black families. Less than half of Black families can give you $3,000 if you need it, and a little more just barely more than half 58 percent of Hispanic families can give you $3,000 or more if you need it.
Now, when we look back at the income gap, or the net worth gap between white folks, Black folks and I don’t have a number for LatinX folks, we can see why that is. If you’re a Black family, and the average Black family is only making $17,000 a year, good Lord $3,000 is way out of range for you to give to somebody else. What about this, retirement account ownership that again, is building a business that will leave a legacy, building a business that you can not only pass down money to your kids and your kids, kids, but also building a business that’s going to take care of you after you have taken care of the business.
Ideally, we want our business to take care of us as we’re building it. I know too many people who have retired from a business that they built, it didn’t have anything, not because the business wasn’t worth something, but because they didn’t know how to sell the business or get the value out of the business when they were ready to retire. But this stat here is about retirement account ownership for the age group of 35 to 54. 65 percent of white people have a retirement account, compared to just about 44 percent of Black people. Only 28 percent of Hispanic folks have retirement accounts. The other category, whatever other is, is 60 percent.
Let me say that again. 65 percent of white people have retirement accounts, only 44 percent of Black people and only 28 percent of Hispanic people have retirement accounts. These numbers absolutely need to change. It is not a reflection on how hard people work at all. Initially in the United States, who was the labor force, it was the enslaved Africans that were the labor force, the manual labor force, who’s the labor force now for the most part? Primarily, LatinX Immigrants are the labor force.
The misnomer, the idea, the stereotype that’s out there, that Black and brown people don’t want to work hard is a complete myth, complete myth. We literally have broken our backs to build this country. Now it is time for us to build businesses with a little bit more knowledge than what our grandparents and great grandparents had before us, so that we can build a business and acquire enough wealth to change our economic situation and to change our situation for our children.
[00:10:21] AW: Hey, excuse me. Pardon the interruption. I know you were listening intently to the podcast. I just want to tell you that I’ve got this great checklist for you to download if you are a new business owner, or even if you’re thinking about starting a new business. It’s called the New Business Checklist. It’s got 12 things that you need to know as a new business owner, to help grow your business and make it ready for the wealth infusion that you’re going to have. Then, you can leave a financial legacy for your kids and your kids’ kids and your kids’ kids’ kids. If you’re ready for that checklist, head on over to transcendthemembership.com/checklist and get it for free.
[00:10:59] AW: So when you see elected officials out there, that don’t care about your neighborhood, guess what, we got to be able to vote for the people to get in there. In order for the politicians to get in there, they got to have a little bit of money to run a campaign. Either they are personally financing their campaign or they are raising money. Sometimes it’s a combination of both. A lot of times, people are just raising money. But if we don’t have the income, to donate to the politician that we trust, who can govern our area whether as a city council person or a mayor or governor or president. If we can’t help finance that campaign, our voice doesn’t get heard.
It’s really, really important to make sure that we are building wealth and being intentional about using the money that we make to change our situation and our status in the United States as people of color. Let me give you a little bit more background about Black entrepreneurship in the United States. After slavery was abolished only about 400 years ago, Black folks had all the skill, they had all the labor, because they were the people working the land. In the reconstruction error, Black people started their own businesses, we had to start our own businesses, we weren’t allowed to go to the white businesses and white folks wouldn’t come to us. So we had to start our own businesses. We started to do really well, because we met the demands of the community.
That wasn’t okay, because we started to get too much money, start to participate in politics and the government said, “No way. We are afraid of a rebellion. So we’re going to do everything that we can to make sure that Black folks do not gain any more power than what they have now. In fact, we’re going to take away the little bit of power that they have acquired.” There were efforts, there’s a number of efforts I’m going to talk to you about that are some of the reasons a handful of reasons why there is this wealth gap between white folks and people of color today in United States.
One is there was a bank that a Black man had started, it was called at Freedmen’s Savings Bank, and Congress came in and took over the bank and mismanaged $3 million from 61,000 accounts. Okay, so there was a Black bank that was built United States in 1874 that had over 61,000 depositors are people putting money into the bank. Congress got involved and quote unquote, mismanage the money, and lost $3 million of money that was owned by Black people. Lost it, $3 million back in 1874, that was a lot of money, and never replaced it.
In addition, this year was the 100th anniversary of the Greenwood massacre. Greenwood was a neighborhood in Tulsa, Oklahoma, where again, remember segregation time, so Black folks lived in their own neighborhoods. Greenwood was a thriving neighborhood, you had doctors, you had movie theater owners, you had Blacksmiths, you had everything that you needed. It was a contained community. There was a dispute between a young man and a white woman in an elevator, a young Black man and a white woman in an elevator, where the white woman screamed in the elevator for reasons unknown and the white people who heard the screams automatically assumed that the young Black man had sexually assaulted this woman.
I don’t believe that she ever corrected the story. Of course, there was no evidence that this young man had done anything other than this white woman scream. On the same day he was arrested, tried and convicted. Later that night, the white folks around Tulsa, Oklahoma outside of Greenwood, rioted came into Greenwood, Oklahoma and literally burned down the entire community. Greenwood Oklahoma was known as Black Wall Street, because it was thriving. It was a self-contained community where money was being passed around, careers were blooming things were great. It was literally burned to the ground in 1921.
The city had a population of 10,000 Black people, and thrived as the epicenter for African American business and culture. Again, it was called Black Wall Street. Do you think that there has been any reparation or admonishment from the government for destroying an entire city and community of Black folks? Absolutely not. Addition moving forward, there has been mismanagement of the G.I. Bill. What is the G.I. Bill? The G.I. Bill says, that if you serve the United States military, then you will get housing vouchers, and also educational vouchers.
But and my grandfather was a part of this, right? Not too long ago, just two generations back. Black veterans weren’t able to use the housing provisions of the G.I. Bill, because banks would not make loans for mortgages in Black neighborhoods. Black men have served their country during World War Two era, that that time, that time period, right, and the early 1900s. When they got back from war, they were promised money to be able to purchase a house, but because of segregation and racism in the government, banks would not insure a home purchase in a Black community.
The GI Bill required a loan, well the G.I. Bill was working with the banks, to be able to give money to the individuals to the veterans to purchase the homes, but if the bank wouldn’t give a loan, the Black men could not use the G.I. Bill to get houses. Banks generally wouldn’t make loans for mortgages and Black neighborhoods. African Americans were excluded from the suburbs by a combination of deed covenants and informal racism. Again, another government sanction, stifling of Black wealth building. Then of course, we have redlining. For those of you who don’t know about redlining, I suggest you either read or listen to the book, The Color of Law, or if you don’t want to do all that just Google, The Color of Law and you can listen to the author give about a 30 or 45 minute explanation of his research into redlining.
Redlining was a practice by the government that basically said, just like the banks that Black folks would not be allowed to own property in certain neighborhoods. Now, this happened at a time where the housing market boomed and suburbs are being developed and there were developers that had created suburbs, right. Black folks weren’t allowed to get in there. Banks also wouldn’t insure the home loans in Black neighborhoods and Black folks couldn’t buy in anything else.
Well think about the age old wisdom of which may or may not be true, though, but that property secures your wealth, because at least if you have property and you have equity in the house, then you can borrow against it, whether you’re going to send your children to school or once it’s paid off, you’ll always have a place to live, that kind of thing. That historically has not happened for Black folks on a mass scale the same way that it has for white folks, because of redlining. We were not allowed to purchase homes in the suburbs and banks would not give loans to buy homes in Black neighborhoods.
That also trickled down to Hispanic neighborhoods, or LatinX neighborhoods, and also Asian neighborhoods. Everything starts with Black people, and then the effect trickles down to people of color in general. If your great-great grandfather would have been able to purchase a home, that he could have passed down to your great grandfather, to your grandfather, to your father, or to your mother, you would have generational wealth that had built up over at least three or four generations. But most of us as people of color don’t have that, because of the laws that were again, written by the government and supported by the government that kept Black folks specifically and also people of color as a result out of particular neighborhoods.
When we’re looking at the cause for the economic situation today, it has nothing to do with working hard at all. People of color have built this country sacrifice, excuse me for this country at war, it have not received the benefits promised by the government. I said I was going to talk to you about the history of entrepreneurship. I really started out just talking about the history of economic oppression from the government. But I want to tell you some areas where Black and brown folks have historically been business owners, insurance companies, banks, record labels, think about that, funeral parlors, barber shops, beauty salons, restaurants, record stores, and bookstores as well. Historically, those were the most popular businesses amongst Black folks in the United States.
Let me tell you about Robert Reed Church. He was born in 1839, and later died in 1912. He was considered the South’s first Black millionaire. He lived in Memphis, Tennessee and founded the city’s first Black owned bank called Solvent Savings Bank and Trust. It is thought that he acquired his wealth through real estate. I just want to use him as an example of we have created our own institutions before. We have created our own businesses before. We have built our own communities before. Every time we get a little bit of traction, there’s some government sanction action that knocks us as a people off the path, but that that doesn’t mean that we don’t try again.
That means we keep trying, until we finally amass enough wealth and enough power, to be able to say, “Hey, this isn’t going to fly anymore.” We need to be able to vote for our own politicians. We want to be able to do charitable work, oftentimes and I just remember in law school, the thing for me that I felt there was pressure, why are you going to go work for a nonprofit and go give back to the community or most of my LatinX friends in law school, the assumption was that they were going to go work in immigration, not that there’s anything wrong with immigration, but you have these pro scripted paths, right?
I’m Black, and I just went to law school, I got to go run a nonprofit, that’s trying to save the neighborhood. If I’m Latina, and in law school, then my path is immigration, but maybe you don’t want to do those things, maybe you just want to be able to give back with your money, because money does make the world go around. We have to be able to amass enough money to participate in these things and these charitable activities. Of course, your time is great, too. Again, your time isn’t going to feed a neighborhood full of people like your money will allow you to do.
You will also be able to support your local school. When you buy in different neighborhoods, schools are funded in this country based on property taxes. So you want to be able to buy property in an area or even if you don’t buy property in an area that has high property taxes, at least you want to be able to give some money and raise the money with the PTO so that your children who if they’re going to the local school, can have some resources. Also social services. We need a lot of help in the United States. We need some restructuring. We need money to be able to make some of those changes.
I also want you to think about acquiring enough wealth, and building your business in a way that you don’t have to hustle all the time, that you get to take a break, that you get to actually live, that you get to do things that are important to you. Spend time with your family, travel the world. What about paying for your kids needs without being stressed out? Thinking no matter what comes my way I got this. Gets do away with financial stress. We can’t do away with all stress in life, but we can certainly minimize financial stress by being really, really business savvy.
I hope you’ve enjoyed my little TED Talk slash podcast today. But it is so important for me that you understand why I am so passionate about entrepreneurship amongst Black folks and amongst people of color, because we have been in this country for a really long time and we have been the victims, I’ll say it victims of a lot of policies that were specifically designed to stop us from amassing wealth, becoming economically powerful. You and your business can change your situation, which will change your family situation, which will then trickle out to your grandkids into the neighborhood, into the city, into the state and eventually into the United States or whatever country you’re listening in.
Hey, you can do it. We need you. We need you, because you are who you are. You bring all of your fantastic self to the table. You have a mission and we need more models and representation just like you and more than that, we got to do something different y’all. We can’t keep waiting around for the handout, not even the handout, just the justice that we deserve. We have to do it on our own. I want to be able to help you do that. So on December 1st, I’m opening up the doors again, to the Transcend membership community, within transcend, the most probably helpful thing is that you get a community of Black and brown entrepreneurs who are on the same mission as you, to build a business that leaves a legacy.
The more tangible goods that you get, our weekly meetings, we meet the first three Thursday’s of the month. The first two Thursdays are trainings on a business or legal topic that is important for you as an entrepreneur building a business that will leave a legacy. The third Thursday of the month is office hours with me, you get to ask me anything, any legal question or business question that you have that I can help you with, ask me and I will find you an answer.
In addition to that, you get my course on how to form your own California LLC. You get my contracts course. You get my course on hiring your first employee or contractor. Now, I want you to really take a look at transcend the membership. You can put that in google or go to transcendthemembership.com and take a look at it. The doors will open again on December 1st, and I want us to get ready the whole month of December to come out in January 2022, crushing our goals.
If you are ready for it, if you have any questions about it, definitely seek me out. Let me know. Hit me up on IG, @ashawilkersonesq and we’ll have a conversation about it. All right. Let me know about your own entrepreneurship journey and I will talk to you soon.
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