Financial Literacy for African Americans
Financial Literacy for African Americans - The corona virus crisis has exposed some real gaps in our democracy, in our politics and the legal system. This is demonstrated by the current events in Minneapolis, MN. Minorities, especially African Americans have been hit hard by the virus itself, however the economic or the financial impact is the most important issue facing minorities and African Americans.
According to the CDC data suggest an over-representation of blacks among hospitalized patients. From 580 patients hospitalized with lab-confirmed COVID-19 found that 45% of individuals for whom race or ethnicity data was available were white, compared to 59% of individuals in the surrounding community. However, 33% of hospitalized patients were black compared to 18% in the community and 8% were Hispanic, compared to 14% in the community.
Death rates among Black/African American persons (92.3 deaths per 100,000 population) and Hispanic/Latino persons (74.3) that were substantially higher than that of white (45.2) or Asian (34.5) persons.
African Americans have also taken the brunt of the economic crisis with the largest percentage of unemployment at 16.4%.
Financial Literacy for African Americans - Essential Workforce
A study published in Black Demographics shows nationwide African Americans are overrepresented in some of the important jobs that have become essential during this crisis. In 2019 the 19.4 million African Americans in the workforce represent only 12.3% of the entire American workforce which is closely representative of total working age Black adults.
Despite only representing 12.3% of the workforce, African American workers represent 25% of all food and courier delivery services which have become essential to many restaurants, retailers. This category of delivery services have a higher potential to put workers at risk due to the number of opportunities to encounter the public. This is also true of many Black postal workers who make up 25% of all postal workers as well as Black public transportation workers who make up 31% of all workers in that category.
A staggering 3.2 million African American are employed as health care workers making up 17% of all workers in this category. Also 1.2 million of them work in hospitals (18% of the total in hospitals) which are at extremely high risk compared to most other workers. African American workers also make up 31% of home health aid and 28% of all nursing care facilities which in some states have been ravaged by the COVID-19 virus.
A TIAA Institute-GFLEC study published November 2019 revealed the nation’s 44 million African-Americans account for 13% of the U.S. population and have a significant impact on the economy, with $1.2 trillion in purchases annually. Yet the financial well-being of African-Americans lags that of the U.S. population as a whole, and whites in particular. The reasons for these gaps are complex, but one area of importance in addressing them is increased financial literacy. We find that there is a strong link between financial literacy and financial wellness among African-Americans.
This report uses the third wave of the TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) to examine the current state of financial literacy and financial wellness among African-American adults.
Financial Literacy for African Americans - Insuring Risks
Its latest study, which was conducted with the TIAA Institute, reports new insights from the TIAA Institute-GFLEC Personal Finance Index (P-Fin Index).
The P-Fin Index measures eight key areas of personal finance knowledge: earning, consuming, saving, investing, borrowing and managing debt, insuring, comprehending risk and uncertainty and go-to information sources. According to the new report, African-American adults answered 38 percent of the P-Fin Index questions correctly, compared to 55 percent of white adults.
African Americans scored highest in the areas of borrowing and debt management, but scored lowest on questions relating to insuring. African Americans scored comparatively low on questions related to comprehending risk, investing and identifying go-to information sources. The report states that low levels of financial literacy in insuring and comprehending risk are especially troubling. So once in the middle class, it’s harder for African Americans to stay there.
Financial illiteracy is the #1 Economic Crisis in the World, which impacts more than 5 billion people across the planet.
The wealth gap in the United States is threatening Americans’ aspirations for social advancement and equal opportunity. Minorities, women and the least educated have some of the lowest financial literacy rates in the nation, a major concern for businesses that see attracting a more diverse workforce as a business imperative.
It’s time to close the gap between those who know how money works and those who don’t. It’s time to break the cycle of endless debt, foolish spending, and financial cluelessness, so anyone who wants to take control of their financial future has the knowledge to make it happen.
Financial literacy equips us with the knowledge and skills to be able to make sound financial decisions that will help us manage money more effectively. It includes the understanding of how money works, how money is made, spent, and saved as well as how to manage debt. People with appropriate financial literacy generally are better at making financial decisions and how to manage money.