Jody Armour, a professor at USC School of Law, wrote that“The black tax is the price blacks (and other minorities) pay in our daily lives because of racial stereotypes. Like a tax, racial discrimination is persistent, pervasive and seemingly inevitable — as in “Nothing in life is certain save death and taxes.”
During American slavery, Africans would do everything they could to save enough money to “buy” their spouses, children and relatives to save them from being sold away or to finally free them. But, of course, money was meaningless when you were a slave. You could save all you wanted to, but the price for your loved one just got higher.
Life was abyssmal for them and they were paid nothing for their trouble. Even when they had money, it often didn’t do them any good.
Now things are considerably different, but not much better in the finance department. Today, a black high school graduate working full-time from age 25 to 64, will earn $300,000 less than a white high school graduate. A college degree won’t help much more. The average black college graduate will earn $500,000
less than an average white college graduate.
That’s a house. That’s a college education for two children. That’s a nest egg to look forward to. All dreams deferred, and denied.
Despite all this, it doesn’t look like we’ll ever get our reparations. So, instead, how can black people account for these life disparities in their finances? What if the black tax actually amounts to a 10% premium on African Americans?
Let’s look at this in dollars.
Black men earned about 78 cents on the dollar for every dollar white men earn. Black women earn about 68 cents for every dollar white people earn (these figures are lower depending on where you look).
Add a 10% tax to that, and it means that blacks men really only earn 70 cents on the dollar and black women earn 61 cents.
We’d have to be paid more than white people, on average, just to break even!
Perhaps whenever we negotiate salary, we should tack on that 10%. Calculate your living expenses and add 10%.
The next time I go on a job interview, believe I will add that figure into the mix.
Besides that, we’ll just have to be smart and unafraid to take risks with our money — and I mean real risks like investing or buying a home and not paying Pookie down the block to buy into a stupid pyramid scheme.
That means paying into the 401k at work and being disciplined not to touch it. It means educating ourselves on home buying, budgeting, credit improvement and investing. It means starting our own businesses and building them. It means accepting when we’ve screwed up our credit (the guilty one raising her hand here!) and doing everything possible to fix it.
And it means that when we have stellar credit, sparkling portfolios and enviable bank accounts, we shouldn’t horde it, but teach others how to do it too. And spread the wealth, even when you don’t have much. We are blessed to bless others.
We’re not going to be paid enough to eliminate the race & wage gap, so we have to save more. We’ll have to build generational wealth to account for the “black tax” — on our health, our spirits and our money — otherwise it will continue to overburden us and our descendants.
History teaches us that no one is going to do it for us. We’re the last people on earth who should expect such charity. So, it still goes back to personal responsibility, even when the deck is stacked — and then some — against us.