Below is a transcript of episode four of By Every Measure, Radio Milwaukee’s new podcast exploring systemic racism in various sectors of Milwaukee, looking closely at how those systems were formed and how they can – and need – to be changed.
Tarik Moody:
Let me give you a number.
Andre Perry:
156 billion.
Tarik Moody:
156 billion. Try to visualize how big that number is. If you could live for 156 billion minutes, you would live until you were 296,804 years old. What if you had $156 billion? What could you buy?
Andre Perry:
It would have funded more than 4.4 million Black-owned business. It would have paid for more than 8 million four-year degrees based on the national average of a four-year public degree. It would have replaced the pipes in Flint, Michigan nearly 3000 times over. It would have covered nearly all the damage of Hurricane Katrina. And, and this goes to my father, it's more than double the annual economic burden of the opioid crisis.
Tarik Moody:
That's author and researcher Andre Perry of the Brookings Institution speaking virtually at a recent 88Nine Community Stories live event. His book Know Your Price: Valuing Black Lives and Property in American Black Cities uses data to show how Black homes and neighborhoods have been systemically undervalued and disinvested.
Andre Perry:
What we found pretty much astounds, that homes in Black neighborhoods are put under equivalent social circumstances are underpriced by 23%, about 48,000 per home, in what amounts to lost equity.
Tarik Moody:
I'm Tarik Moody and this is By Every Measure. On this episode, we're talking about the racial wealth gap, picking up right where we left off with housing. The wealth gap is so much bigger than just housing alone. According to a report from Forbes, closing the racial wealth gap across all sectors would add between one and one and a half trillion dollars to the US economy by 2028, making that 156 billion figure just seemed like a drop in the bucket.
Tarik Moody:
In this country, there are two ways that families build wealth: inheritance and entrepreneurship. We're going to talk about both ways of wealth building in this episode and how Black people were left behind in housing, in business and in policy. Again, it's all about the systems.
Andre Perry:
I say this all the time. I hope you repeat it as often as possible. There's nothing wrong with Black people that ending racism can't solve. When we're talking about the state of Black cities, the state of Black neighborhoods, we're constantly saying the conditions or the state of them is predicated on individual people's behavior, but the reality is that racism is robbing people of the resources to lift themselves up. If we want to fix the issues in our neighborhood, we should not fix Black people. We should fix the policies that extract wealth from Black people.
Tarik Moody:
To understand how we got here in the first place like we've been doing in every episode so far, we have to go back and look at the history. That's where my conversation Reggie Jackson begins, picking right up where we left off in the housing episode.
Tarik Moody:
One fact that really stood out to me, Reggie, was if a Black family wealth continues to grow at the same pace as it does right now, it would take Black families over 220 years... 228 years exactly... to amass that same amount of wealth white families have today. So, let's go look at your article which is very fascinating headline for Milwaukee Independent, When America Catches a Cold, Black Gets Pneumonia: the Impact of an Uneven Economic Playing Field. So tell me, how do we get to this point where it takes 228 years for us to catch up?
Reggie Jackson:
Well, there's an assumption made that the white wealth isn't going to continue to grow, which we know it will. When we think about wealth, American wealth, most people don't understand what wealth is in this country. Wealth isn't your bank account, your stock portfolio, your 401(k). Most American wealth is in your homes that you own. One of the biggest factors that disadvantaged Blacks is that we have a much lower homeownership rate than whites. Nationwide, the Black homeownership rate is just over 40% and it's over 70% for whites. They have a built-in advantage right there and the reason here in Milwaukee, specifically, that is even bigger challenge is our homeownership rate is like 27, 28% for Blacks and almost 70% for whites in the city of Milwaukee.
Reggie Jackson:
We can talk about wealth, but a lot of it is related to the fact that for decades, Black people could not get mortgages to buy homes and white people could. They were incentivized by the federal government. They were incentivized by state and local government. They were incentivized by banks and realtors to become homeowners. At the same time, Black people were denied those opportunities. The Black homeownership rate nationwide when the 1968 federal Fair Housing Act was passed was 41.3%. At the end of 2018, it had grown to 42.9%, but it actually peaked in 2005, Tarik, and it's been going down every year since then.
Reggie Jackson:
Ultimately, we know what this pandemic and the economic crisis that is laying waste to millions of jobs that we're going to see it exacerbate itself and that homeownership rate for Blacks is going to go down significantly. I'm telling people all the time that we have only seen the tip of the iceberg with this pandemic and the economic impact. We're going to continue to move backwards as a Black community and I can guarantee you, our backwards movement will be much quicker than the backwards movement for white folks. We will be much more likely to have our homes foreclosed on. Man, it's going to be ugly moving forward, Tarik. This wealth gap will continue to expand and grow to a size that we can't even imagine what it's going to be a year from now, two years from now. It's going to be much worse, I think.
Tarik Moody:
You can really look at the racial wealth gap, especially during this pandemic. COVID-19 has pulled away the bandaid and show the true infection of the racial wealth gap. The typical white family has 10 times the wealth of a typical Black family, and a lot of Black families have few resource in the case of emergency such as COVID-19. This pandemic has put us in a recession. We know from the data, the history from past recessions, that a recessions affect black people worse than white people and they are the last to recover economically. But it wasn't always like this. Milwaukee had a thriving Black middle class in the 1950s, thanks to the other way Americans built wealth: entrepreneurship.
Reggie Jackson:
Many people have heard of the Black business district, Walnut Street, that people now refer to as Bronzeville. It wasn't called Bronzeville back then. But at that particular time, 1950, according to Census Bureau, Black business ownership rate per capita in Milwaukee was the highest in the United States of America.
Tarik Moody:
Really?
Reggie Jackson:
It wasn't a whole lot of Black businesses, but we had dentist office and we had doctor's offices, attorney's offices, car washes, nightclubs. We had everything we needed.
Tarik Moody:
But what happened? How did Milwaukee lose what seemed like a thriving Black business hub?
Reggie Jackson:
It wasn't the freeway that destroyed it, like most people will tell you. It was urban renewal. The first urban renewal project in Milwaukee was called the Hillside and Roosevelt Urban Renewal. It literally wiped out half of the black-owned businesses in Milwaukee by tearing down everything on Walnut Street from 6th Street to 10th Street.
Reggie Jackson:
Now, the freeway was being built, but it hadn't reached that far North. They were building it from the South to the North. At that time, they were destroying the Italian community in the Third Ward, tearing their houses down and their businesses down. By the time the freeway got to where Walnut Street was, all of those businesses were already gone. They had already been torn down years before and then what was left of that community, the residential properties and the few businesses that weren't destroyed, they were destroyed by the rest of the construction of the freeway.
Tarik Moody:
The thing that you should know about urban renewal policies, that some of them might even had good intentions but overall, they affected housing affordability and living cost, which led to gentrification.
Reggie Jackson:
That really was something that the Black community never fully recovered from. One of the huge factors is that we never were able to grow a very large Black middle class and upper middle class in Milwaukee because the engine of that on Walnut Street was destroyed and so we never built a strong Black middle class and upper middle class like places like Chicago, Detroit, Cleveland, because Black people have been in those places much longer and had been established for a much longer period of time. We literally came to Milwaukee too late.
Tarik Moody:
What he's saying is that Black people didn't have enough time in Milwaukee to build that generational wealth because by the 1970s, the jobs started going away. Companies like A. O. Smith, Allis-Chalmers, Schlitz, they all started reducing their workforce and even leaving the city, which devastated Black workers. As far as starting a business, Black people had problems, too, with banks. There have only ever been a handful of Black-owned banks in Milwaukee, which is another aspect of the wealth gap: inequality in banking.
Reggie Jackson:
But why is it we have to pin on Black banks? Why is it that we not demanding that the white banks treat us the same as they treat white people? We know that there has been multiple lawsuits for discrimination by banks giving different terms to Black borrowers, whether it be buying a car, buying a house, getting a loan for a business, not providing Black people with capital to start a business. We talk about entrepreneurship all the time. Part of the reason that entrepreneurship is so much more difficult for Black folks is because we can't get access to capital. People understand that most businesses fail within their first year. The ones that are successful and ones that have enough capital set aside that they borrow when they open their business to get through that first very difficult year.
Tarik Moody:
And don't forget that they also have the family money, family friends. They had inheritance money, which we were robbed from all the housing, all the wealth of devaluation of our property and never getting the access.
Reggie Jackson:
Absolutely.
Tarik Moody:
Quality of life lags behind for many Black residents in Milwaukee in multiple indicators including employment, poverty and homeownership. According to a recent report on the state of black well-being in the nation's largest metropolitan cities from the African American Leadership Alliance MKE, the median household income is only $31,000 for the whole household, and less than 8% of black households have an income above a hundred thousand dollars. That's why you see the thing called reverse migration, counter to what happened after the war, the Great Migration.
Reggie Jackson:
As we're looking as Blacks are moving now to the South, moving back to the South to places like Houston and Austin and Dallas... I know a lot of people that have moved to Texas, man... and North Carolina, Virginia, places of that nature, they're moving to those places because those are healthier communities. They're nicer communities. Their houses are cheaper. You can get more bang for their buck. You can get more stable employment there. You don't have a lot of the problems that you have in cities like Chicago and Detroit and Milwaukee and Cleveland. You don't have those issues.
Reggie Jackson:
One of my best friends moved down to a suburb of Austin, Texas because she was tired of Milwaukee. She said, "I don't want to live here anymore. It's too much of a struggle day to day and I want my kids to have a better future." She moved down there. She says she'll never move back to Milwaukee. She loved it down there so much, her mama moved down there with her, her sister moved down there with her and they never looked back, man. One sister stayed but that's because she loves Milwaukee, but the rest of them like, "I'm leaving. I'm not coming back." I have a friend who moved out to New Mexico and loves New Mexico, of all places. I have several people, including some of my wife's family members, who moved out to Arizona. I know a
Tarik Moody:
And the funny thing about this, I think Milwaukee leadership, maybe some, don't realize this doesn't just hurt the black community, these blacks leaving. This hurts the whole industry up here, that Milwaukee, Wisconsin needs to learn, at least in my opinion, why people go to those places, especially blacks, because I truly believe Milwaukee... There's a lot of great things here. I'm not going to lie. There's some interesting
Tarik Moody:
I just know a lot of people who like... Black families... "Once my kid is in high school, we're out of here," and you hear white people say, "You can't leave. You can't leave." Well, understand those southern cities... Atlanta, the mayor, Mayor Jackson... Policies help build wealth for blacks. That's one thing I think Milwaukee learned. It's like, "Man, Jackson put policies like, 'Put a black person on the bank board. If you don't, I'm taking city money out the board. Airport, hire subcontractors.'" They did that and helped build that wealth and that spread throughout the Southeast and a lot of black northerners saw that and they came down, not just Atlanta, to Durham, Charlotte, Austin, all that because of those policies.
Tarik Moody:
I think Milwaukee can learn a lot. If they want to compete... Because they're competing, not competing to Minneapolis or Chicago, man. They're competing with everybody now. It's a global world. They need to look at the city holistically, not just downtown, but the 53026 seriously like with the Opportunity Zones which I read a lot about, but doesn't really do anything anymore. They're nice things. They really help white developers, not the black communities.
Reggie Jackson:
They look good on paper. Tarik, what you just shared about what happened to Atlanta, when people ask me, "Well, what can we do to help Milwaukee?" I say, "Do the same thing you did..." Listen, what Atlanta did, what Maynard Jackson did was he said, "Listen, the things that we have done as a government organization for white people, we're going to do it for black people and see what happens." Do in Milwaukee what you've done for white people for decades, do the same thing for black people and you won't have any more problems than Milwaukee. That is a key. I get tired of people asking me for the solution and I tell them that that's it and they're like, "Well, that's sounds discriminatory." I'm like, "It wasn't discriminatory when you were doing it for white people."
Tarik Moody:
Called the New Deal, the VA loan, FHA housing, all that.
Reggie Jackson:
Yeah, you didn't call it handouts then.
Tarik Moody:
Homestead Act.
Reggie Jackson:
Right. All of those things but now, oh, you're reluctant to do that for black folks because now, white people who have been so accustomed to getting the hookup, now a minute the black people may get a small piece of the same hookup they got and, "Oh, that's so unfair. That's reverse racism," and all this other nonsense.
Reggie Jackson:
No, when you give Black people an opportunity, we are able to take advantage of it. Milwaukee hasn't done that. The brain drain that we have is tremendous, man. How do you convince young black professionals who graduate from Howard University like yourself or from Grambling or wherever who grew up in Maryland, who grew up in North Carolina or grew up in Montgomery or grew up in Austin, Texas or grew up in LA, how do you convince them to come to Milwaukee?
Tarik Moody:
I tried.
Reggie Jackson:
What is attractive about Milwaukee?
Tarik Moody:
I haven't told people this, but I have tried. A couple people are like, "Hey, you can buy..." They rented a 200-square-foot apartment for $5,000,
Reggie Jackson:
They don't want to hear it. They know it's the truth, though. Listen, you cannot be an intelligent person and not know that those are things that are a factor. Nobody wants to leave a place where they see themselves having success and move to a place like Milwaukee that has so many issues. I mean, it doesn't make sense.
Tarik Moody:
It makes national news for the wrong reason and people see that.
Reggie Jackson:
We're the poster child for so much stuff that's wrong, that you're not going to convince particularly young people to move here. And think about all of the people, Tarik, that you know because I can think of many that I know over the years that have tried Milwaukee like, "Man, I'm going to try really hard to get my act together and have success in Milwaukee," and then it's like you're bumping your head against a brick wall. I'm not trying to bash Milwaukee. I'm just being real. Milwaukee is a difficult place for a lot of folks. You have this crab in the barrel syndrome where people are fighting for the same crumbs and they can pull you down so they can get pulled up and you have that constant battle, people working in silos, competing against each other.
Reggie Jackson:
And then some of the people just like, "You know what? I'm tired of this. Let me move to Charlotte. Let me move to Austin. Let me move to Dallas. Let me move to Houston. Let me move to Phoenix. Let me move..." When Black folks are leaving Milwaukee, it isn't just because of the bad weather. You can't convince Black folks to come to Milwaukee just because of Summer Fest. I mean, Summer Fest is a beautiful thing. The Fiserv Forum is a beautiful arena, but it ain't going to convince nobody to come to Milwaukee. They're like, "Man, I can see the Fiserv Forum on the internet. I don't need to move to Milwaukee to see it."
Tarik Moody:
Not to say there aren't any organizations working to retain and attract black professionals to Milwaukee. One organization Reggie mentions is called FUEL Milwaukee, which aims to do just that. But it takes more than just one organization to bring Black professionals and retain Black professionals in the city and more importantly, to start closing the racial wealth gap. It's going to take more than construction of condos, which has exploded across the city, especially in downtown.
Reggie Jackson:
Once you come here, you move into the condo, you're really happy like, "Man, this is a beautiful condo. It's cheap, blah, blah, blah," but then it's like, "So what do y'all do on weekends? Where the clubs at?" Clubs? They ain't got no clubs. You're not going to have the atmosphere you have in so many other places and that's something that to me and...
Reggie Jackson:
I remember this, Tarik, when I moved back to Milwaukee in the early '90s after leaving in the early '80s. I came back and as I was driving back to Milwaukee, driving over that bridge downtown, coming into downtown Milwaukee, and I looked over to my right, I'm like, "Man, where are the tall buildings? Why you ain't built no tall buildings in the last 10 years and Milwaukee is still look old and raggedy like it did when I left 10 years ago?"
Reggie Jackson:
They built some new buildings and tried to fix downtown up better now, but Milwaukee is still a very old-fashioned place because it's still run by a bunch of old-fashioned-minded folks. We were very conservative city for a very long period of time and we're still very conservative. We're not progressive. Milwaukee's not a progressive place. In leadership, we don't have progressive leaders in the way that some of these other cities do.
Tarik Moody:
Coming up next on By Every Measure, we're talking with two black professionals and entrepreneurs from the private sector who are stepping up where government hasn't. Both are working to close the racial wealth gap in their own way. We'll learn how next.
Speaker 4:
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Tarik Moody:
Welcome back to By Every Measure. In the second half of each episode, we're going to talk about possible solutions being developed right here in Milwaukee, solutions that can be scaled to other cities facing the same challenges. When it comes to banking, we know there's a huge disparity which has played a role in this racial wealth gap in our country. Here's an example: at 2019 in the fourth quarter, Black-owned banks held a total amount of assets totaling $5.2 billion. That seems really good, doesn't it? But, listen to this: nonminority institutions held at community and non-community banks had a total assets of 17.7 trillion... Trillion with a T... dollars, according to data from the FDIC. For example, JPMorgan Chase alone, the country's largest bank, holds assets of $3.1 trillion. Again, all of Black-owned banks held assets of $5.2 billion. You see what I'm talking about?
Tarik Moody:
Joining me now is Elmer Moore, executive director of Scale Up Milwaukee. Scale Up Milwaukee is an initiative of the greater Milwaukee community. It runs a number of programs including Scalerator, CEO Forum for Growth, Meet the Masters series and a growing membership platform. Scale Up Milwaukee has helped create more than 150 new jobs in the region, according to its website. I started by asking about Netflix, which recently announced a plan to invest a hundred million dollars or 2% of its cash holdings into financial institution organizations to directly support Black communities in the US.
Tarik Moody:
For those who don't understand why I brought up black banks and why Netflix investment's important, why is it important to invest in banks in your community? Explain that to someone who's like, "This seems ridiculous. Why don't Netflix just give it to my school? Why can't Netflix give it directly?"
Elmer Moore:
Netflix and Reed Hastings' decision to make investments in financial institutions was an important and pretty bold move. It's going to be challenged because there's a lot of folks that are saying, "Yeah, but that doesn't affect me." But it's important. It's actually attacking something at a systems level. Unless we create institutions that can advantage communities at a systems level, we're never going to be able to cure our way one symptom at a time to actual community health. So, you have to attack the system.
Elmer Moore:
There's this term called economic velocity. Economic velocity is the word used to describe how much time capital stays inside of the community. So, I get my paycheck, I go home and I decide to order something on Amazon. From the moment the money hits my bank account or I get paid, a clock starts. The moment that I spend that dollar outside of my economic community, the clock stops and that time is the velocity.
Elmer Moore:
The way to empower communities is A, adding capital and B, slowing down how much time money spends in that community. If you look at African American economic velocity, it's counted in hours. If you look at-
Tarik Moody:
Yeah.
Elmer Moore:
Yeah.
Tarik Moody:
It's like an hour or two hours.
Elmer Moore:
It's crazy. If we think about how do we slow down that velocity, we're going to have to make some really deliberate choices. We also, also, also have to think about infusing capital into those economies. That's what investing in those black-led institutions is going to do. Why is it meaningful that Netflix made this investment? Who cares? It's really the nice way. You're being nice. Who cares? If we want to ask the question, should they have done something else, that's a different question. If we want to ask the question, will it have impact? Yes, but a small one because a better number than a hundred million would have been 300 million or 800 million. But if used wisely, those institutions can actually produce substantial impact. If those banks use those deposit bases or that asset base to make targeted investments where they send their loans, that hundred million dollars can do a lot.
Tarik Moody:
As Elmer mentioned, more capital leads to entrepreneurship, which is urgently needed in black communities. But can banks do it all?
Nadiya Johnson:
We have been systemically left out in so many different places for so long, it's necessary for us to take ownership in our own businesses, creating our own economy.
Tarik Moody:
Next, we speak to Nadiya Johnson of Milwaukee-based software company Jet Constellations and The Milky Way Tech Hub. Her Milky Way Tech Hub took matters into its own hands and launched a 15 million-dollar venture capital fund to vest in black and brown tech businesses.
Nadiya Johnson:
The Milky Way Tech Hub has always focused on growing a tech ecosystem. We're a tech hub here in Milwaukee and eventually scaling to the Midwest. It became glaringly obvious that one of the missing pieces for any tech hub, but especially for ours as we're growing, is capital. We need capital and resources. I started to interview different start-ups that started here and then left and found themselves raising half a million, million dollars. I was asking, "Well, why did you leave?" Because they were saying it's just not enough resources, especially capital, here.
Nadiya Johnson:
That's really what helps start-ups to thrive, amongst a number of other reasons as it relates to the culture, the environment, fostering innovation and such. The capital is a big one and so understanding that... And obviously, being at the intersection here of black woman and computer scientist, I'm building out this ecosystem. I'm very aware of the alarming statistics as it relates to venture capital. And Tarik, I'm sure you're aware only 1% of black businesses are backed by venture capital. That's sad. We've got like, what, thousands and thousands of businesses being backed a year by VC and then we can only literally find like what, what is it, like 200 something black companies that's been backed by VC? That's crazy. That's crazy. That's why I said earlier it's so important for us to be able to ask ourselves and have a really good understanding of how did we get here. When you have a good understanding of the systemic oppression that's got us to this point, you realize that there's a fundamental flaw in this space.
Tarik Moody:
I'm guess I'm thinking probably why tech start-ups are probably a good way to help close that gap because of their scale, the ability to scale bigger and hire more people and have salaries that can help close that gap, I'm guessing, because a traditional small business... It was like, "Black-owned businesses and white-owned businesses, why don't business hire more people and have more employees?" Well, the traditional black-owned businesses have usually one or two people working for them. But the idea of tech, if you look at Google, I guess, or Facebook or... The ability to scale up fast, bring in more money, hire more people, plays a role in hopefully closing wealth gap. Would you agree with that?
Nadiya Johnson:
I would. I agree with that. I also think that it's important to note is a separate point, which is when we think about Internet of Things, when we think about 5G and when we think about artificial intelligence and where it's headed, if there's not enough representation in those companies and ownership of companies in these spaces, the wealth gap will increase.
Nadiya Johnson:
There's two things that we have to do. We have to figure out how to address the current wealth gap, but we also have to make sure that that gap doesn't get bigger. Artificial intelligence, for example, it's going to very soon and already make decisions about who gets the house or who gets the job or... Completely transforms industries requiring for folks who currently don't have the skills to either upskill or they lose their job.
Nadiya Johnson:
I mean, when there's so many different changes happening because of 5G, IOT and artificial intelligence, just to name a few, if we're not in these spaces, we're going to start losing jobs, being replaced and of course, the biases that are going to be built into some of these algorithms is going to further create these barriers that eventually will lead to an increase in the wealth gap.
Tarik Moody:
Yeah, I guess I can see that. There have been stories about the artificial intelligence and all the people building it are mostly white men so they put their implicit bias in the technology. That affects... People are looking at police departments using artificial intelligence or banks using for loans and house loans.
Nadiya Johnson:
Exactly.
Tarik Moody:
So to have more representation tech to hopefully prevent those things happening can also play a role in closing that racial wealth gap.
Nadiya Johnson:
Exactly. We have to figure out a way to make sure that our data and that big tech is not weaponized against us. The best way to do that is to make sure that we are present, and the best way to be present is ownership.
Tarik Moody:
So just to recap, here are some of the solutions we talked about on this episode of By Every Measure. First, companies need to keep investing in black-owned banks, making more capital available to entrepreneurs. Companies need to actively recruit people of color for high level positions, C-level positions, to ensure racial bias is kept out of innovation. Individuals like Nadiya are making huge strides and taking bold actions to invest in black and brown communities. We need more investors like her. If you want to learn more about the Nadiya's venture capital fund and Elmer's organization Scale Up Milwaukee, head over to radiomilwaukee.wpengine.com/measure and get the discussion guide for this episode.
Tarik Moody:
Coming up on the next episode of By Every Measure, we're going to look at the other end of the spectrum: education. Better education leads to closing the wealth gap and the other systemic issues we have been talking about on this podcast. That's next time on By Every Measure.
Speaker 7:
By Every Measure is hosted by Tarik Moody and Reggie Jackson. Executive produced and edited by Nate Imig with additional production support from 88Nine program director Jordan Lee, marketing director Sarah McClanahan, marketing coordinator Erin Bagatta, web editor Evan Rytlewski, audio producer Salam Fatayer, executive director Kevin Sucher, content marketing manager Amelinda Burich, community engagement manager Maddy Riordan and imaging manager Kenny Perez. Handcrafted Sonic Inspiration from The License Lab, and our sincerest thanks to our members for making all Radio Milwaukee content possible. By Every Measure, an original podcast production of 88Nine Radio Milwaukee.