Local Peace Economy

Why Black-White Economic Disparities in a Very Progressive State Are Called the 'Worst in the Country'

Minneapolis African Americans use their money in nonviolent protest.

Photo Credit: Tony Webster / Flickr

In 1960, black families in Minnesota made about 74% of what white families made. Today, they make about half of what white families make. More than 30% of the state’s African American population lives in poverty, compared with a shrinking 5% of whites.

The disparities in Minnesota “are the worst in the country,” says Me’Lea Connelly, executive director of the Association of Black Economic Power. Disparities in “housing, prison… other socio-economic markers,” are already bad, and getting worse. “Whites are able to take advantage of a strong economy, and blacks are disenfranchised.”

Payday loan locations are often how the community banks, where a small loan of just a few hundred dollars can carry a 450% interest rate. And in Minnesota, from 2004 to 2006, 50% of mortgages to blacks were subprime, compared to 10% to whites.

On top of these gross racial disparities, the Minneapolis police killing of Jamar Clark and the subsequent weeks of protest that resulted in dozens of arrests and five young protesters shot by a white man left the entire community depressed. Many people are suffering from mental health problems related to experiencing so many of these traumas first-hand.

The activist community tried “healing circles and debriefs,” but “a lot of activists weren’t coming in…or responding to the healing circles,” Connelly says. At the time she had left her job in finance to work with Minneapolis Neighborhoods Organizing for Change, a black, member-led, grassroots organization. She saw social media postings of people struggling with the trauma, and recounting stories of the horrific experiences they went through, including witnessing their fellow protesters being shot.

“These were kids just out of high school and college,” Connelly says. She heard rumors that people had started using drugs or were considering suicide. People in the community were disappearing for weeks at a time, she says, and losing jobs—all ramifications of what had happened. “It was a blow to the community.”

And then, less than a year later, Philando Castile was killed, and Connelly just couldn’t take it.

“How can we create a tool for resistance that wasn’t the bodies of black youth?” she asked. “We’ve got to get out of this cycle.”

What the community decided to work on next, instead of the protests and constant reactions to injustice, was “the concept of economic resistance, and to use our money to shape our communities instead of relying on bodies of youth.”

The group started working on “creating economic equity in the black community, reversing trends of disparity in our state, diverting our energy from fighting systems to creating our own. How do we create our own space? How do we create our own systems? We learn from what’s already been done, and build on that.”

Connelly says the community started organized boycotting with a divest-reinvest approach. The number-one idea was a black-owned financial institution.

“That’s where we established the Association of Black Economic Power,” she says. They received a grant to apply for a credit union charter. “It came out of grassroots activism, after the killing of unarmed black men—Incubating a larger black cooperative system… encouraging cooperative economics in the black community.”

“Credit unions provide an opportunity for African Americans to exercise their power,” says Timothy L. Anderson, board chairman of the African American Credit Union Coalition. “Credit unions are established as a cooperative. It’s people helping people. For African Americans, that’s critical. Binding together for economic power can effect change.”

The community set up locations where people could nominate and vote for what the name of their new credit union would be, and Village Trust was nominated by multiple people and won.

“To me, that’s a small flicker of what is possible. That tells me black people want to see a village community. They want to have that—building collective trust together. Credit unions are different from banks, because the people are their owners. It’s there to build community. And our mission is to build the black economic community. We want to see people come together to build something positive. To take that energy to build something for our kids. To build something for our future.”

Connelly says, “the message black folks get is, there is no future. The most audacious thing we can do is plan for our future. And to convince people and have another narrative that we do have a future, and we’re going to plan for it together.”

With the credit union, they hope to get rid of predatory lending and payday loans, offer affordable car and home loans. It’s about having hope, she says, not just coming together for another funeral.

“We’re gonna keep working,” she says. “Establishing a small credit union, where black folks own it and gives them a sense of pride.”

Meanwhile, marketers are salivating over how to get the black community to spend more on everything from wine to shoes to cosmetics, making this divest-invest potentially more potent by hitting big business where it really hurts: African-American “buying power” is estimated to reach $1.4 trillion in 2020. That’s a lot of money to take out big banks and invest in local communities.

Valerie Vande Panne is an AlterNet writing fellow who contributes to Columbia Journalism Review and Reuters news service, among other outlets. She is the former editor-in-chief of Detroit's alt-weekly, the Metro Times, and the former news editor of High Times magazine. She is the founder of Blackbird Literacy, an organization providing books to residents and literacy programs in Detroit. Connect with her on Twitter @asktheduchess.

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