UR alumnus Shawn D. Rochester spoke last Wednesday about the costs of being a man of color in America and the notion of the “black tax.”
Rochester, who is now the CEO of financial education and advising company Good Steward, commented on many financial issues people of color face and gave his advice to audience members.
“Why are people of color in America unable to accumulate wealth and pass it on to further generations?” asked Rochester, referring to how African-Americans own only about 2 percent of American wealth.
He pinned this on the so-called “black tax,” which is defined as an additional financial cost placed on African-American individuals by people and institutions who have anti-black biases. This discrimination can either be conscious or unconscious, he said.
Rochester, who has done research on this idea, attributed its origin to the historical treatment of African-Americans.
“Slavery is a 100 percent tax on the enslaved person’s labor — the value of uncompensated labor from 1619 to 1865,” Rochester said. “Researchers estimated that $50 trillion were yielded from the enslaved people’s labor between 1619 and 1865. Thus, $50 trillion is the valued worth of what it means to not be able to control your body.”
Rochester also pointed to the lack of education as one of the reasons why this trend occurs.
As an example, he discussed how New York City spends 50 times more per average child on education than on an average child of color in South Carolina, where they represent 51.4 percent of the population. According to Rochester, researchers found that if enough educational resources were provided to those students, the wage gap would be reduced by up to 50 percent.
His speech also discussed housing discrimination.
Rochester said that the federal government spent over $120 billion between 1935 and 1965 to provide subsidies to homeowners for housing. While 20 million European immigrants benefited the most, he said, only 2 percent of subsidies went to the African-American population.
Rochester referenced research done by the University of Chicago: Researchers sent out a strong resume with the name Emily on it to many companies. Later, they sent the same resume, but changed the name on it to Lakisha. What they found out was that the industry preferred a name like Emily to Lakisha.
“Is it still happening? The answer is yes,” Rochester said. “The bulk black tax imposed on the man of color is discrimination today. That is, there are two types of racial discriminations — explicit, when you know what you’re doing, and implicit, a subtler one. Even if the people claim to have eliminated all the prejudice, in fact, they didn’t. How much bias is out there indeed?”
Following the speech, the audience was able to ask questions. One individual asked was if there was a way to overcome the tax Rochester had spoke of
Rochester answered that we need to teach people a basic framework of financial literacy, with a focus on spending more money on necessities rather than materialistic items.
“What we can see is possession and what we can’t see is ownership,” Rochester said.
He encouraged the audience to start employing three paradigms: stewardship — making savvy use of money, ownership — a right of possession, and legacy — leaving your resources to your children, to accumulate an inheritance.