Do You Even Care That You Can’t Find a Job Because You Don’t Have a Clue About the Economy?
by Yvette Carnell
Black unemployment is at an all-time high but, according to Mike Green, CEO of BlackInnovation.org, blacks have totally misunderstood why unemployment is high and what they can do about it. In an exchange with me about what went wrong and where the U.S. economy is headed, Green shed some light on what has to happen in order for the black community to regain its footing in the 21st century economy:
The process that catalyzed moving jobs overseas was the private equity and venture capital industry, professionalized by Rockefeller’s Venrock in 1969 with its investment in Intel. That process exploded into more than 600 VC firms today (how many is that per month since 1969?) and more than 300,000 angel investors (SEC requires a minimum of $1M net worth, not counting residential property, plus at least $200K per year annual income to be considered a qualified investor and “angel”). This landscape of investors put $52B into roughly 70,000 companies just last year alone. This type of risk capital was the fuel that ignited a skyrocketing space of startup companies, which the Kauffman Foundation states unequivocally are responsible for ALL net new jobs in America since 1980 (Jimmy Carter).
That explosion of rapid-gowth companies fueled by risk capital required companies to minimize expense and grow profits. How do you do that when manufacturing a product or service is expensive? You find a way to manufacture the product (cell phones, smart phones, etc) cheaper. That means a combination of technology and low-wage workers.
The outcome also produces high-wage jobs for engineers, programmers, etc., but the majority of workers in the technology-driven knowledge-based, innovation economy are manufacturers of the products that contain the knowledge and information, such as computers, laptops, phones, TVs, etc. The manufacturing jobs are low-wage jobs filled by low-skilled to moderately skilled workers. The high-wage jobs are the creative jobs like coders and marketers … those who produce well-designed platforms and those who brand and sell those platforms to get customers to engage them.
Those who speak of manufacturing coming back to U.S. shores, speak of ADVANCED manufacturing, which much of the American workforce is ill-prepared to fill as workers because we did not invest as heavily in STEM education (science, technology, engineering and math) as China, India, Japan, Taiwan, South Korea, Sweden, Brazil, the UK and other countries around the world that import workers to the U.S. to fill jobs that quite frankly very few Black folks could fill if the jobs were directly offered.
Additionally, manufacturing jobs, in any format, whether high-wage or low-wage, low-skilled jobs, would NOT put a dent in the unemployment rate of Blacks in comparison to Whites. That hasn’t happened in any era. And with manufacturing jobs, as a share of the overall job market being in single digits (plummeting from a lofty 30% a handful of decades ago), there is no hope in any presumed manufacturing solution to the job crisis for Black Americans.
The solution is for us to engage in the Innovation Economy. First by understanding it and secondly by investing heavily in preparing and equipping our youth with strong core STEM education knowledge and experience to participate and with entrepreneurial skills to compete. Entry into the high-wage workforce requires a STEM education background. Entry into the high-growth entrepreneurship sector (which creates the net new job growth Kauffman speaks of) requires STEM education and experience. No investor will write checks to any Black entrepreneur who doesn’t meet the comfort factor (pattern matching). And no bank will loan to a startup business that doesn’t have significant collateral, which tech startups do not.
In the innovation economy, we can continue to keep our folks in the dark about the processes, which journalists and elected leaders do, alongside teachers, preachers and parents who are completely clueless, or we can inform ourselves with information and data and strategize through collaborative efforts how to exponentially engage and compete.
If we fail to help ourselves, who will help us?
As we near 2050, when America’s demographics will shift into a majority minority, the economics will not shift with it unless we generate the impetus and catalyze the economic movement. That requires understanding of what the processes are and how we can engage and compete. If we fail to make those steps, our children will bemoan the permanent underclass they have become because of our inability to work together and provide a foundation upon which they can compete in a capitalist society that changed the economic game in our lifetime.
Power concedes nothing. And nobody is going to give us the capacity we can create for ourselves. Yet, America’s power brokers recognize the unsustainable landscape they have created when the majority of the citizenry is incapable of contributing meaningfully to the economic competitiveness of the nation. That door of opportunity is opening and compelling folks to work together to equip and empower those who have been disconnected. But if we can’t speak the language of this new economy nor understand its processes, that makes the collaborative efforts much more difficult. We can cultivate the ground today by informing and empowering our folks with new information and new data and a new economic paradigm.
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