That is the only way to talk about the results of a recent study commissioned by Operation HOPE, with the help of Professor Lew Mandell of Buffalo State University and our friends at the Jump$tart Coalition. Thanks Lew and Laura Levine for your leadership here friends!
The report, entitled "The State of Financial Literacy of Young African-American Adults in America," seems to only confirm what I have always unfortunately assumed was true; mainstream America is bad off when it comes to financial literacy and black and brown America has gone from bad to worse. Problem is, we cannot afford "worse."
Download the summary report below at no charge here (and share it with a friend, or two, or your entire block or eCommunity, for that matter!)...
We released this report nationally as part of "A Day of HOPE with Andrew Young: from civil rights to silver rights, the dawning of a new movement in 21st century America," on April 12th, 2005, in Atlanta, Georgia, and you could literally hear the gasps of utter disbelief of delegates as we began to chronicle the "state of things" in the black community around our financial literacy...
Allow me to share the conclusion page with you....
"In contrast to young White adults, African-Americans of the same age have lower levels of financial literacy and the trend is not improving. This deficiency is true for all income
groups, with relative scores decreasing for African-Americans with higher family incomes.
The data seems to indicate that young African-Americans place relatively more emphasis on spending than on saving. While this is true of Americans in general, it appears to be somewhat more pronounced among African-Americans. Indicators include higher relative scores in questions related to spending rather than saving as well as higher use of credit and debit cards and lower use of saving and investing vehicles.
Part of the problem may be due to the schools where African-Americans are less likely than Whites to receive education in money management or be given the opportunity to play a stock market game, which is very useful. Part of the problem may occur at home where fewer African-American students report learning from their parents and a higher proportion report receiving a regular (no chores required) allowance which is associated with lower financial literacy scores. Also, fewer African-American students report having a part-time or summer job in high school, depriving them of an additional opportunity to develop valuable financial literacy skills.
While all young Americans are in need of and deserve to learn financial survivorship skills, this is particularly important for African-Americans who currently lag in both the financial resources and financial literacy needed to enjoy a secure stake in our "ownership" society."
And it was that LAST paragraph that really bothered me the most. It is effectively a double whammy for black families; fewer resources to make mistakes with, and less current knowledge available to make the right decisions! And middle class black families did not do well either. Truth be told, the report reports clearly that families making more than $80,000 annually scored LOWER than black families making less than $20,000 annually. Go figure.
Fully 80% of our economy is on the back of the U.S. consumer, so says the Federal Reserve System -- that means you and me friend -- and we have a President that is calling for "an ownership society" (which I basically agree with by the way), and Social Security Reform inclusive of private accounts... But there is a problem with this bold vision; "how do we manage our own Social Security Account, when we cannot manage our own checking account!" Not good.
And that is why I have respectfully advised the President, during my most recent meeting, and his key advisors, that any attempt to reform Social Security and add (the responsibility for) personal accounts MUST include a substantive component around financial literacy. I am told the White House is listening.... I HOPE so.
As I often say, "if you don't know better, you cannot DO better."
Onward, with HOPE