Why I love paying the black tax

I’ve often heard people say that they can only support black-owned businesses if the price being charged is effectively competitive with white-owned products.?Also, there is the understandable need to ensure that the quality of the product is just as good.

There is nothing wrong with this logic, I get it.??It makes perfectly good sense to say “If everything else is equal between the black-owned product and the non-black product, I will choose the one that is owned by the black person.”

If this is how you think, then I commend you.?This is an important step in the process of supporting black-owned businesses.

Now let me give you another perspective to help you understand what we’re actually dealing with. ??It’s EXTREMELY DIFFICULT for many black-owned businesses to compete in price and quality with businesses that are not owned by black people:

-??????????Big corporations have access to global supply chains that keep the supplier price as low as possible

-?????????Many black business owners are first generation entrepreneurs, so they may not have the same level of expertise as companies in the same industry.

-?????????Black business owners can’t always obtain the capital necessary to take losses by undercutting the prices of their competitors

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The list goes on and on.?In other words, there are millions of black business owners who are doing their best, but have a tough time competing against global corporations with thousands of specialists, massive supply chains and billions in capital at their disposal.

The second thing I ask you to consider is this:?Who benefits when you buy from a company that isn’t owned by a black person??Let me lay it out with an example.?If I buy a pair of socks at Walmart, that money leaves my community IMMEDIATELY.?It gets placed into the corporate bank account, and after expenses are paid for the quarter, the profits go into the hands of shareholders, who are mostly non-black.

These shareholders care nothing about your community and your dollar is probably gone FOREVER.??You spent a dollar and all that dollar will ever be is the financial version of a one-night stand.

Now let’s assume you buy the same product from a black-owned business, where the owners also believe in buying black just like you. ?When they receive your dollar, they aren’t going to take the money out of the black community.?Instead, they are going to either pay their team members with the money or use the money to provide for their family members, who are most likely going to be black like you. ??

After they pay that team member his/her money, that person will go into the black community and spend the money with another black-owned business, who may also then pay their employees.?

So, let’s add up the impact of the dollar spent in the black community:?You give the dollar to the business, who pays an employee, who gives it to another black owned business, who pays another employee.??This means that this dollar has been used four times, which creates what economists call a “multiple.”?This multiple means that black wealth is multiplied when we support black-owned businesses.?

So, to go full circle, the point here is simple:??Spending with black owned businesses is a very natural and simple way to multiply black wealth!?We don’t have to ask for permission to do this, we only have to have economic awareness and discipline.?Of course, it would be difficult to spend every black dollar with a black-owned business, but a simple redirect of just 10% of our black wealth would do wonders for the black community.?

This is an excerpt from The forthcoming book, "The 10 commandments of Black Economic Power," by Dr Boyce Watkins. To learn more from Dr Watkins or join his Stock Market Investing class, please visit BoyceWatkins.com