$12.87 an hour?

"My job sucks."

Everybody I know, black or white, has said this before. But if you're black, you're more likely to mean it and with good reason: a new study from U.C. Berkeley's Center for Labor Research and Education says more than half of black workers in the US have jobs that, well, suck.

Whether you like your job is irrelevant; the point of the study was to show that race matters when it comes to finding work with decent pay and benefits. 56.4 percent of black workers make $12.87 or less. Only Hispanics had a higher percentage, but it's a good bet those numbers are skewed by immigrants doing manual labor and other low-paying jobs.

At first glance, $12.87 an hour might not sound that bad, but think about it this way: that's less than $28 grand a year, or $514 per week. And that's before taxes. My rent would eat up almost half that.

And you think YOU got it hard.

There's more to this story, I'm sure, but the full report won't come out for a few weeks. I'll come back to it then.

Got! (by online jackers)

A couple months ago, while I was still blogging for AOL Black Voices, I posted an item about preventing identity theft. It's a huge problem, especially given how much business most people do electronically these days (how many times have you punched in your credit card number or address online this month?).

But even though I've talked about this topic on TV before, I never thought I'd know somebody who fell for one of those "phishing" schemes, you know, where they send you an email saying your lost aunt in Nigeria has a trillion dollars for you and all she needs is your social and bank account number to get it to you. They're so obviously scams that no reasonable person, I figured, would go for it.

I stand corrected. A friend of mine who I know is a really smart and pretty sophisticated woman, wasted no time replying with her social security number and bank account pin number after getting an email claiming she has refund money coming from the IRS. The money never came, of course and she spent the rest of her day cancelling credit cards, closing bank accounts and placing fraud alerts in her credit files.

All that is to say that I suppose not even smart people are immune to dumb scams when greed is involved. Free money? Great, here's my info! So in the interest of helping you protect yourself, here's a link to the Federal Trade Commission's tips on identity theft.

Why Blackpeoplesmoney?

First a big shout out to all my former Ways & Means readers who followed me over here. Thanks for sticking with the kid.

With that in mind, one of the faithful W&M readers emailed me a question: Why is this blog called blackpeoplesmoney? Seems self-explanatory, but he had a point: all money is green, it all spends and everybody wants and needs it , no matter what color they are, right?

True. Because this blog is about everyone's favorite topic, money, pretty much anybody can get something out of reading it and I hope they do. But as there are social and cultural nuances to black American life, there are also economic ones. And as a professional business writer, I don't believe those are explored enough in the media, so I took the initiative to do it here.

Now, quick, shameless plug time before I end this: Look out for Ebony magazine's September cover story, written by yours truly. And don't forget that I'm guest-blogging for BET's Meet The Faith show for the next two weeks.

Homless in Prince George's

Even in the wealthiest black county in America, foolishness and foreclosures go hand in hand:

Foreclosures Bloom at Corner Of Prosperity and Gullibility

Check me out on BET.com

Just a quick reminder that my stint as guest blogger for BET's Meet the Faith Program kicks off today and will continue through July 19. As usual, I'm writing about financial matters among African-Americans. You can read it all at www.betintroduces.com/shows/meetthefaith.

Tyra on treating her workers

Tyra Banks says she finds it easier to send her employees on vacation than to splurge on herself -- and that her workers reward her for it.

Kimora Lee Simmons on Learning to Handle Money

Supermodel turned entrpreneur diva Kimora Lee Simmons talks about her biggest money mistake ever and what she learned from it.

My gratuitous Don Imus post

"The civil rights movement for your generation is economic."

Those words were said to me by Nathan A. Chapman, the man who started the country's first, and thus far only black-controlled, publicly-traded investment bank, only weeks before I got my first job as a business reporter. It was seven years ago, five years before Nate's company spectacularly crumbled, before Nate himself was charged, tried, convicted and sentenced to a seven-year stretch in a white-collar scandal.

He said those words across the coffee table in his private office, on the 28th floor of the World Trade Center in Baltimore, with spectacular views overlooking the Inner Harbor, in a meeting my college's president hooked up for me. I was 23, and it was weeks before I got my degree, just as the dot-com sector and the stock market went bust, around the time the housing bubble started getting inflated, a half-decade before it burst under the pressure of exorbitant home prices and sub-prime mortgages. It was before it was hot for a twenty-something from the projects to write about Corporate America in the mainstream media.

And it was before Don Imus called the Rutgers women's basketball team some nappy-headed hoes.

How does Imus relate?

What happened to Imus in the wake of his comment shows how prescient Nate's words were in framing my then-infantile career as a business writer, the real challenges for my generation and even this blog, long before I ever imagined I'd write it. Imus' words created an uproar in the media and, of course, among old-school civil rights types. But it wasn't a march or a protest that ultimately brought him down. Imus made his comment during his Wednesday, April 4 radio show. By the following Monday he'd been told he would be suspended for two weeks, but was still on the air. But the next day, April 10, Staples and Procter & Gamble pulled their ads from his TV slot on MSNBC.

General Motors shook him off the next morning, as did American Express, which had been spending a reported $1.2 million in ad dollars on the program. By that evening, MSNBC dropped Imus' show altogether. No marches. No organized boycotts. No sit-ins. Some of America's biggest companies decided that sponsoring Imus wasn't worth the risk of potentially alienating millions of black checkbooks. Maybe Spike Lee said it best in an interview on the Today Show: "I'm going to spend $100 in Staples today. I'm buying Bigelow Tea. I'm buying Procter & Gamble..."

Economics -- the civil rights platform for my generation -- was the final arbiter in the disposal of Don Imus.

And with that, I bring you this new blog, "Ways & Means", a look at how we relate to the rest of America and the world, through our individual and collective economic condition. Most of my posts will be (a lot) shorter than this, and they'll also be short on, if not devoid of my own opinions and any financial advice -- I'm a journalist, not a pundit or financial adviser, after all. Much of what I talk about here will be in the form of anecdotes that hopefully put the financial condition of black folks -- particularly our generation of black folks -- in context. And since I need to write often, I hope you all read me, either here or at my other blog, and send me all the suggestions, criticisms or ideas you have to offer. Hope you enjoy.

We're getting bigger and better

I said when BPM relaunched that I planned on growing the site and expanding beyond it with my writing on financial literacy. Now I'm happy to announce that my work here is baring fruit, and I've been approached by AOL BlackVoices to partner with them in creating a new blog called "Ways & Means".

Scheduled to launch at BlackVoices on April 16, Ways & Means will also be focused on financial literacy, particularly among young, professional African-Americans looking to get their economic footing right. Unlike here, where I post more sporadically, Ways & Means will have new posts daily, which means I'm hoping for a lot more feedback from you with suggestions of new topics to keep the flow going.

Just like here, what I write will be anecdotal, about sharing stories that relate to financial trends as opposed to advice, given I'm a journalist and not a financial professional. Blackpeoplesmoney.com will continue to exist and I hope you'll continue to check us out here while making Ways & Means one of the sites you visit on a regular basis.

Thanks for reading.

Cents-less violence?

My last few posts were about the cause of the race-wealth gap. It's a subject that deserves attention, but more pressing is the conversation about the gap's effects on minority communities, especially in inner cities.

Two recent stories, in the Philadelphia Inquirer and the Boston Globe point out how a surge in violence among young, black and unemployed males -- is tied directly to lack of education and economic opportunity. (Recall, my last post asked whether the wealth gap was cause by lack of education or cultural factors).

In some cities, violent crime is up at an alarming rate. Philadelphia has already topped 100 murders this year. Boston, though its violent crime rate pales in comparison, has seen a spike in shootings, including a ridiculous incident last Friday when an 18 year old black male was shot in the head on a city bus -- just about a mile from both the Globe's offices and my own apartment. The increase in violence is happening as some economists say the economy is slowing down -- remember the adage about black folks catching the flu when the economy has a cold? In fact, Steve Bailey's column in the Globe points quotes a speech by Ben S. Bernake, the chairman of the Federal Reserve Bank, that warned about the consequences of a growing gap between "superstar" have and regular-people have-nots. (Coincidentally, Bernake quoted a story I wrote for the Globe earlier this year).

I talked to Steve after his column ran and he said he wanted to kick himself for forgetting to include one important stat from a study which pointed out that black male high school dropouts are employed at lower rates and earn far less money than either white or Hispanic dropouts. They also die violently at higher rates than whites or Hispanics. But for black males who go to college and graduate, the income gap narrows and the disparity in murder rates nearly disappears.

What's that mean? In short: regardless of what causes the wealth gap in America, a lack of education among black males equates to a lack of economic opportunity, which in turn equates, for far too many, to a quick trip to the graveyard. On the other hand, get some of these cats off the street and into a classroom, and there's a strong argument that not only does the wealth gap close, but the violence almost certainly disappears.

Culture or education, Part II

My last post started a debate among readers: is a lack of financial savvy and education or cultural factors like racism and historic lack of access to financial institutions primarily responsible for the racial wealth gap in the US?

I'll keep my own opinion out of it, but will share some of the best points I got by email from a few readers.

A 28 year-old single mother from Boston with a degree in sociology and "a sh*tload of student loan debt", blames societal factors:


"I was thinking today about some of the early welfare laws of the 20th century and the impact they have had on "the black family"...if a man was found living in the house (man-in-the-house rule) with his woman and children, welfare benefits were automatically and drastically reduced. Just thinking of the impact this must have had...being penalized for trying to maintain your family unit! Then I thought about more recent rules prohibiting and penalizing people for having savings, once on welfare. While welfare is only a small part of the history of black folks, it does illustrate how government has systematically prevented economic mobility among our poor for years.



Then we have the middle class. How many news reports have we read and seen that deal with banks unfairly charging higher interest rates for Black/Latino consumers or car insurance companies charging higher rates in zip codes where the population is predominantly Black."

Still, she admits her own family is an example of how education plays a role. Several property owners preceded her, yet none of them ever discussed how to save for or acquire a home, leaving her to do the research on her own, she said.

Another reader, a 31-year-old publicist from suburban Maryland, says simply that "at the end of the day, no matter what happened in the past, there's no excuse for not handling your money right except [lack of] education. Culture has nothing to do with you not knowing..."

I'll post more feedback as it comes.

Education or Culture

I came across this post on another personal finance blog: One columnist's take that the wealth gap between minorities and whites is cultural, and a blogger's counterpoint that the wealth gap is one born of a lack of education about finances.

I don't think you can separate the two: Unfortunately, the black community has always lacked sophistication and knowledge about wealth, and that's been paired with some very necessary, but bad habits. After all, it wasn't even a century ago when black folks could not deal with the financial mainstream -- not banks, brokerages, real estate agents and so on, so alternate means of saving, borrowing and investing evolved to meet the need. In the meantime, only in the past few years has financial literacy become a priority in American education and media.

So I say it's culture plus education. Tell us your take in the comments section.

Loans coming home to roost

A new study first reported by one of my Globe colleagues shows that once again, when there's an economic cold going around, black folks catch the flu. This time the illness might be too much for many of black homeowners to survive.

The story, "A smoking gun on race and subprime loans", details that African-Americans are far more likely than whites and in some instances Latinos to have used such loans to buy their houses during the housing boom (which has now gone completely bust, in case anyone was still wondering).

What's a subprime mortgage? In short, it's a type of loan that's supposed to be targeted at people with poor credit. The important thing is that they're typified by higher interest rates than someone with a good credit score would pay. Not all subprime loans are bad, in fact they exist to help people who otherwise would not be able to borrow money for a house because of dings on their credit.

But too many people who shouldn't have had these typse of loans -- or who couldn't afford homes at all -- were using them to buy houses at overblown prices. What's worse is that many such loans not only came with high interest rates, but also had adjustable rates. For those people, who are disproportionately black, the worst-case scenario came true: home prices dropped while interest rates rose, meaning their monthly payments are now unaffordable and many of the homes they bought can't be sold because they are now worth less than the original price.

So why is this a "black community" problem as opposed to one for people with bad credit to worry about? For one, any number of factors contribute to African-Americans having lower credit scores than people of other ethnicities -- like less experience with credit and home buying or fewer family resources for down payments or to stave off credit card bills -- which makes it far more likely for us to have to pay higher interest rates on home mortgages.

Still, if you're college educated, professional and in a high income bracket, you're likely to have better credit and not have to worry about this, right? Actually, another report says that at least in Boston, affluent African-Americans were the most likely segment of the population to have used a subprime loan to buy a house. Assuming, again, that people with higher incomes are more likely to be eligible for cheaper loans, then, that's a trend that's both disturbing and not entirely explicable.

And since subprime mortgages are being blamed for a record number foreclosures all across the country, it's conceivable that many African-Americans across the country are in grave danger of losing their homes -- which could be disastrous in the long term for some black neighborhoods.

Not sure if you've got one? Right now interest rates on a 30-year, fixed rate mortgage are about 5.6 percent, give or take a few points. If you're borrowing, or have borrowed, at a significantly higher rate than that in recent years, you've likely got a subprime loan.

Know anyone who has a subprime mortgage, or think you have one and want to tell your story? Email us.

We're Back

So sorry for the long delay, but finally comes the relaunch of Blackpeoplesmoney.com. You'll notice the page is redesigned for easier navigation and a livelier look and feel. I hope you enjoy.

We also plan on posting a lot more often going forward, and are making it easier for you to contact us by simply dropping a not to blackpeoplesmoney@gmail.com. (Hopefully this box won't get deluged with spam so that it won't have to be changed).

We also plan to add a few contributors to the site and some new interactive features. Stay tuned for those.

One thing you should immediately notice in our links section is a link to a free financial literacy kit from HSBC, a bank based in New York. I'm not shilling for or paid by HSBC, but the link is an example of one way we hope to improve, by regularly linking to resources that hopefully our readers will take advantage of as you try to educate yourselves about money and get your financial weight up.

The HSBC kit comes on either CD-ROM or as nine booklets on banking, credit history, financial planning, home ownership, insurance, investing, managing your money, retirement planning and using credit. It's available in English or Spanish. You can get the kit by clicking the link we provided or emailing HSBC.

Again, we hope you enjoy the redesign. Thanks for reading. Stop back soon. Tell a friend. Or a few.

-Keith T. Reed
Creator, blackpeoplesmoney.com