Why Group Economics is Important for Black Communities
- Group economics is when groups of people have a common economic goal.
- NBA player Andre Iguodala mentioned that group economics is essential to the success of the Black community.
- Group economics is one route that assists with the closing of the racial wealth gap, including the practice of supporting local businesses.
After the brutal and unjust murder of George Floyd, groups in the United States protested on the streets throughout Washington D.C., Minnesota, and other states to protest the inhumane actions portrayed by the police officers. Doing so brought up the opportunity to protest other economic injustices that the black population has faced over countless years.
During the protests, the NBA took the initiative to allow their players to promote social justice messages on their jerseys for the remainder of the 2019-2020 season. Two NBA players, Anthony Tolliver and Andre Iguodala, chose the statement “Group Economics” to be displayed on the back of their jerseys, and here’s why.
What is Group Economics?
Group economics is when groups of people have a common economic goal and work together to achieve it. However, Andre Iguodala mentioned in an interview with USA Today how the system today does not favor minorities, “It’s essentially how systemic oppression doesn’t allow us to buy from our own communities, or get loans to build businesses so we can support ourselves and recycle our dollar.”
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Iguodala points out the favoritism of banks when it comes to giving out loans. Statistics show that a black person is almost twice as likely to be rejected for a mortgage refinance than a white person. A white person gets denied a mortgage refinance 17% of the time, whereas a black person has a 30% chance of being rejected.
For example, a Maryland man named Akili Akridge expressed how he was denied his mortgage refinancing option after posting the necessary information on a mortgage marketplace. Although he had all of the requirements for refinancing, he assumes the reason for the rejection was because he disclosed his race. Akili mentioned that the first two lenders who called asked him to reveal his ethnicity. Afterward, they called him back and said they were not looking to refinance a townhouse mortgage, which was the type of house Aklil wished to refinance.
Why is Group Economics Important?
Due to the ongoing pandemic, small businesses have suffered immensely due to less than usual foot traffic and sales. Research shows the buying power amongst African-Americans has reached more than $1 trillion per year. Yet, today, only 2 cents of every dollar is used to fund Black-owned businesses, and the Black dollar only circulates a total of 6 hours before leaving the Black community.
There is a historical timeline of economic injustice among African-Americans that is crippling in building wealth. However, African-Americans have the power to responsibly control their spending and shop at Black-owned businesses to help maintain their economic growth and independence.
Statistics show that when a community consciously promotes practicing group economics, it will improve the quality of life for the population living in those areas. The benefits of group economics are financial independence, promotion of financial literacy, self-sufficiency, business growth, and multi-generational wealth building.
How to Improve Group Economics
Andre Iguodala himself has taken steps to help the Black community achieve their group economics goal. He partnered with investment group Comcast Venture’s Catalyst Fund when he played for the Golden State Warriors. The investment group has been giving money to Black, Latinx, and women entrepreneurs to help fund their business goals.
As Iguodala is making a change on a national scale, here are some ways that you can help improve group economics within your community.
Buy from Local Businesses
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Unlike large corporations with multiple locations, local businesses are usually only one store. Therefore, they thrive on the number of people who walk into their store and purchase their products/services. However, when choosing to buy your everyday items at stores such as Walmart and Target, it becomes increasingly difficult for the local businesses to stay open and provide their services to their community. Choosing to spend your money at local businesses will give them a chance to stay in business and help achieve the group economics goal.
Recommended Read: Why Black Business Month is Great, but Support Year-Round is Better
Promote On Social Media
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If you are dining or shopping at a local Black-owned shop, social media is a great way to show additional support. By tweeting or posting on your Instagram and Snapchat stories, you can show off the stellar product or services and help the business gain more customers. By using the power of social media to help spread the word, the local business will attract more attention, allowing them to increase their revenue and improve group economics.
Leave Positive Reviews Online
You can leave positive reviews on sites such as Google and Yelp!, which will help the local business attract foot traffic from people who live in or visit the area. People who wish to support local businesses but do not know which ones to choose from often use these reviews to find popular local businesses in their area. As a result, leaving excellent reviews about the business can go a long way. Furthermore, by doing your part and leaving reviews, the local companies now have an expanded consumer base, resulting in them being able to earn more money and help achieve the community’s group economic goals.
Unfortunately, statistics show that financial institutions have had discriminatory practices regarding minorities, making it more challenging. However, with organizations and influential individuals like Andre Iguodala as allies, added to the power and opportunity minorities possess in building their communities, group economics makes financial empowerment and generational wealth achievable. Therefore, if financial institutions deny loans for minorities, group economics at work makes it easier for those within underserved communities to still push ahead financially.
What are some other ways the group economics goal can be achieved? Let us know in the comments below.
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