Originally created 05/07/00

Blacks work to make economic progress



During nearly three decades of public service, state Sen. Charles Walker has seen Augusta progress toward racial harmony and equality.

Where whites exclusively once sat on the dais of political power, there now sits a mixed crowd. Black and white pastors swap pulpits to promote diversity.

But the key to winning the civil rights struggle, the Senate majority leader says, lies in another color -- green.

"What we need to do is improve our economic condition, and the social problems will take care of themselves," said the Augusta Democrat, himself a successful black entrepreneur. "The next battleground for civil rights is the economic battleground."

On the front lines, black Augustans have made progress. Local black buying power -- the total personal income of African-American residents that is available for consumer spending -- jumped from $1.2 billion in 1990 to an estimated $2 billion in 1999, according to the Selig Center for Economic Growth at the University of Georgia.

Also, local economic boosters report that the number of black business owners has grown, although no statistics are kept. But the area's black unemployment rate remains high, at 11.3 percent -- more than twice that of white's.

The problems are not unique to Augusta, nor is the progress made. To overcome the disparities will require changes in society at large and within the black community itself, some say.

"We picked up all the habits," Mr. Walker said. "Black people and white people do everything alike, except we don't know how to make money in sufficient quantities."

On average, blacks receive only two-thirds as much income as whites receive, said Joseph Greene, a business professor at Augusta State University who has extensively researched how gender, race, education and other factors influence personal finance.

"From the very beginning, there is a disparity in the standard of living," Mr. Greene said. "It becomes pervasive."

For example, blacks save, on average, only $1 for every $3 saved by whites, Mr. Greene said. Because of lower incomes, black households have less money available to invest, he said.

And blacks often find it harder to get loans, because lower incomes hinder their ability to pay off debt, Mr. Greene said.

But progress, although slow, is coming, the professor said.

More blacks are investing money in financial markets, in part because of new access granted by 401(k) plans, pensions and other work-related savings plans, Mr. Greene said.

Often, such investments lead people to begin investing independently in avenues such as stocks and mutual funds, he said.

"That does create a level of access," Mr. Greene said.

More blacks also are choosing to open their own businesses, he said. They are helped by improved access to capital, in part because of the federal Community Reinvestment Act, which requires banks to track their interests in minority and low-income communities, Mr. Greene said.

The income issue is what pushes some minority entrepreneurs to start their own ventures, a local consultant said.

"A lot of my clients say they just want to be able to control their own income," said N. Andre David, a business consultant for the University of Georgia Small Business Development Center. "They just want a piece of the pie."

Angela Lowery is one example. The mother of five and former welfare recipient started her own child-care business, Little Connections, from her Hephzibah home.

"I think entrepreneurship is the best way to go," said Ms. Lowery recently during nap time at her "nontraditional" child-care center. The center offers 24-hour care, geared toward late-shift workers and others whose schedules are not accommodated by most day-care centers.

Ms. Lowery decided to start the business after a stint working for a local "big-box" store. She netted only $1,100 per month, barely enough to cover her family.

"I was working to pay child care," she said. "I couldn't do that and pay bills, too."

So Ms. Lowery began pursuing her own business, becoming a certified child-care specialist and taking classes in subjects such as nutrition, cardiopulmonary resuscitation, first aid and attention-deficit hyperactivity disorder. To gain experience, she worked at an established child-care center in town.

"I got down on my knees and said, `Lord, I know I can do this,"' Ms. Lowery said. "I knew in my heart it was what I really wanted to do."

The Small Business Development Center helped Ms. Lowery draft a business plan for her operation, and she also sought help from the Augusta Metro Chamber of Commerce.

Despite her homework, the effort hasn't been easy. With about 30 children on the roster, the center still seeks customers.

"It was slow in the beginning," Ms. Lowery said. "It just started picking up recently, with people getting to know me and my name getting out there.

"Trust me, I've been on my knees a lot of days. One week, you would have kids, the next you would have none."

To help minority entrepreneurs such as Ms. Lowery, the Small Business Development Center and the chamber created a resource manual for prospective business owners.

The manual instructs business owners in the development of business plans and outlines traditional sources of capital, such as banks, and nontraditional sources, such as grants and stock offerings.

The chamber also established its Partners in Prosperity program to reach out to minority- and female-owned businesses, said Tammie Flowers, the chamber's programs coordinator.

The program sponsors seminars for prospective business owners, instructing them in various aspects of running an enterprise, Ms. Flowers said. Established entrepreneurs also offer themselves as mentors for start-ups, she said.

The program is open even to nonmembers of the chamber, Ms. Flowers said. Besides offering assistance and instruction, Partners in Prosperity allows small-business owners to develop contacts and relationships in the local community, she said.

"Our main goal is to develop programs and strategies to bridge the gap," Ms. Flowers said. "A lot of small-business owners don't know what's out there. A group like Partners in Prosperity needs to be out there."

The chamber has a vested interest in promoting minority businesses, said its spokeswoman, Elizabeth Guilfoyle-Wehman.

"Overall, it does progress our mission of economic development," she said. "When you invest in building small businesses and minority-owned businesses, you're really growing the community as a whole.

"When you contribute to that one segment of society, it helps the overall economic development of Augusta."

But the converse is also true, Mr. Greene said. Until blacks and whites can bridge the income divide, it will hurt the economy at large, he said.

Lower incomes for African-Americans means they have less money to spend, which reduces the demands for goods and services, in turn slowing productivity, the professor said.

"The disparity in income has a devastating effect because it becomes pervasive in the overall scheme of the economic cycle," Mr. Greene said. "What affects your black brother has an indirect effect on you as a white brother."

Reach Brandon Haddock at (706) 823-3409.