Though Phyllis C. Starks still loves shoes, the Cobb County woman spends her money more wisely now — and focuses more on saving and investing it — than when she spoke to an Atlanta Journal-Constitution reporter for a story in 1995. STEVE SCHAEFER / SPECIAL TO THE AJC
Photo: The Atlanta Journal-Constitution
Photo: The Atlanta Journal-Constitution

Atlanta and black wealth: Success for many, but not for all

During the month of February, The Atlanta Journal-Constitution will publish a daily feature highlighting African American contributions to our state and nation. This is the fifth year of the AJC Sepia Black History Month series. In addition to the daily feature, the AJC also will publish deeper examinations of contemporary African American life each Sunday.

Shoes. Phyllis C. Starks loves them.

But the love came at a cost.

Starks guessed she owned between 200 and 300 pairs as she worked her way through college and started a career. By her mid-20s, Starks had spent about $15,000 on shoes, nearly four times more than she had in savings and investments, she told an Atlanta Journal-Constitution reporter in 1995 for the first of a series of articles about African American wealth.

Starks, 53, says she’s now more financially fit. Her shoe collection is down to about 60 pairs, and she won’t spend more than $70 on a pair. More importantly, Starks estimates her investment portfolio is about $190,000, not including the Cobb County home she bought 16 years ago and a southeast Atlanta home she inherited from her father.

» MORE: Full coverage of Black History Month

Starks shares her lessons about money with younger family members. The conversations, she says, are important to helping the next generation of African Americans build wealth. Similar lessons are taught in churches, where it is a frequent sermon topic; as well as at the city’s revered black colleges; at family gatherings and on social media. The topic came up during this month’s Morehouse College fundraising gala when television star Omari Hardwick, the program’s emcee, talked about increasing black wealth through education.

Phyllis Starks holds up the March 20, 1995 copy of the Atlanta Journal-Constitution in her home in Mableton Saturday, January 18, 2020. Starks appeared on in the business section talking about her personal finance. Starks had realized that she needed to change her long-term financial strategy because she spent more money on shoes than she invested.
Photo: STEVE SCHAEFER / SPECIAL TO THE AJC

After years of being denied opportunity and lacking the generational wealth of many white families, more African Americans are now enjoying greater financial success through entrepreneurship, real estate acquisitions, climbing the corporate ladder or working multiple jobs. African Americans who were disproportionately crippled by the Great Recession with lost homes and jobs are rebounding as the economy expands with help from 50-year low unemployment and low mortgage interest rates. While some statistics show a growing racial wealth gap, African Americans here in metro Atlanta are faring better in many financial categories than anywhere else in the nation.

» RELATED: Atlanta fast becoming a mecca for African Americans in tech

» FROM 2018: Wealth gap between whites and blacks widened after Great Recession

Atlanta, many say, is best positioned to support African Americans seeking financial prosperity. Its history of creating black wealth includes landmark legislation in 1974 by the city of Atlanta that opened doors for African American businesses to get city contracts and the massive film studio Tyler Perry opened here last year. The achievements have been important to the region’s standing as the economic capital of the Deep South.

Starks restructured her finances through wiser spending, investing more of her money, working two jobs and renting the Atlanta property.

“I’m glad I grew up,” she said recently. “I just had to stop the spending.”

The success stories, like Starks’, are plenty, but there’s also a disproportionate percentage of African Americans — particularly inside the city limits — who have not shared in it.

A promising outlook

Metro Atlanta has more than 7,600 African American-owned businesses with paid employees, the most recent U.S. census data shows. That’s second only to the New York region, which has nearly twice as many African American adults. Eight black-owned businesses in the Atlanta area were among the nation’s 100 highest-grossing African American companies, according to a recent Black Enterprise magazine report.

Atlanta and Black wealth

Black-owned businesses with paid employees: 7,683 (ranked 2nd in country)

Top 100 revenue companies: 8 (3rd)

Median household income: $41,803 (5th*)

*among cities with the nation’s 20 largest African American populations

Sources: U.S. Census Bureau, Black Enterprise

 

The possibilities of a more prosperous life have drawn many African Americans — particularly from the Northeast — attracted, in part, by larger homes in the Atlanta suburbs they couldn’t afford in those places. Census data shows slightly more than 2 million African Americans live in metro Atlanta, second only to the New York City region. The median annual household income for African Americans here is nearly $42,000, higher than most U.S. metropolitan areas. In Forsyth County, it’s $90,760, according to 2018 Atlanta Regional Commission (ARC) data, the highest in the region.

And more opportunities are on the horizon. In 20 years, Fulton County is projected to have a net increase of about 47,600 jobs for African Americans, the third-largest increase in the nation, according to a report last year on black employment by McKinsey & Company, a global management consulting firm. Atlanta’s vast collection of colleges — including six historically black colleges — continues to be a pipeline for many of these jobs. More than 30% of the region’s African American adults have college degrees, the fifth-highest percentage in the nation, according to the website Black Demographics.

But despite Atlanta’s benefits, many blacks in Atlanta faced with overcoming generational poverty still struggle to build wealth. Homeownership among African Americans — a key component of wealth building — about 25 percentage points lower than for whites a decade ago, has since declined at a greater rate than for whites, ARC research shows. Median household income for African Americans has declined in Clayton, DeKalb and Fulton counties since the Great Recession that crippled the U.S. economy about a decade ago.

Still, the homeownership rate for African Americans in the region is 48%. That’s 7 percentage points higher than the national rate.

Upward economic mobility for African Americans and the poor was the last mission of the Rev. Martin Luther King Jr., before his assassination in 1968. It remains so for those who study the issue, like Bryant Marks Sr., an associate psychology professor at Morehouse College, King’s alma mater.

Marks said the economic disparity, even among African Americans in this region, is a result of underperforming schools, crime, and white and black flight from neighborhoods still grappling with the effects of discriminatory housing policies. He also cited the post-Great Recession homeownership figures, sadly remembering the “For Sale” signs that sprouted throughout his southwest Atlanta community from African American residents who took out subprime mortgages and lost their homes.

“These things are interconnected,” said Marks, a Queens, New York, native, who started the National Training Institute on Race and Equity. “We still haven’t recovered.”

Maynard’s plan

Segregation laws confined much of the region’s black population east of downtown Atlanta in the city’s early days. The laws unwittingly created a booming black business sector on one of those streets, Auburn Avenue. “Sweet” Auburn, as it was called, flourished for much of the first half of the 20th century. It was home to banks, churches, nightclubs and the Atlanta Daily World, the city’s black-owned newspaper. In 1956, Fortune magazine called it “the richest Negro street in the world.”

Civil rights legislation in the 1960s presented new opportunities for black Atlantans, and many moved west of downtown. African American families ventured to south DeKalb County and other suburban communities in the 1970s. By the early 2000s, DeKalb was majority African American, and had one of the largest middle-income black communities in the nation.

Maynard Jackson, shown taking the oath of office as mayor on Jan. 7, 1974, helped more black-owned businesses succeed in Atlanta by requiring the city to set aside a percentage of contracts for minority-owned businesses. AJC FILE PHOTO / CHARLES PUGH
Photo: The Atlanta Journal-Constitution

Arthur Queen was among those who arrived in south DeKalb during that population growth. A Washington, D.C., native, Queen started a glass construction and installation company in Gwinnett County in 1986, where his was one of two black-owned businesses in Norcross. Queen recalled Liane Levetan, DeKalb County government’s last white chief executive officer, urged him to relocate to her county.

Today, Queen’s company, EGM Services Inc., sits near I-20 and Wesley Chapel Road and has 30 employees. The conference room is adorned with framed photos of projects done by the company such as the National Center for Civil and Human Rights, the MLK Natatorium, several local schools and the Fulton County government center. On one table is a coaster with the picture of Maynard Jackson, Atlanta’s first black mayor, an important figure in the company’s survival.

The company was in trouble in its early days. Its fortunes changed in 1989 when City Hall hired his company to do work on Underground Atlanta. The contract, he said, “put us on the map.”

Queen, 77, said his business, originally called Ebony Glass, and other black-owned businesses wouldn’t have made it without Jackson’s program, which required the city set aside a percentage of contracts for minority-owned businesses. Jackson started the effort when he took office in 1974.

EGM Services Inc. CEO Kelsi Queen-Robinson (left) and her father, Arthur Queen, chairman of the board of EGM Services Inc., share a laugh at their office in Decatur Jan. 24, 2020. Queen-Robinson left her job as an educator and got an MBA to help run her father’s business. ALYSSA POINTER/ALYSSA.POINTER@AJC.COM
Photo: The Atlanta Journal-Constitution

By 1999, a quarter-century after the program began, 44% of the concessions companies doing business at the airport were minority-owned, the AJC reported. It was just 1% before Jackson took office.

“The good ol’ boys had it locked up tight,” Jackson, who died in 2003, said in a 1999 PBS interview. “The same law firm had the business, no questions asked, no competition, no bidding, no request for proposals, nothing. So this was a democratizing (of) the whole system and trying to create, therefore, an atmosphere and a process whereby all Atlantans, and that included African Americans, would have an equal opportunity.”

Said the 77-year-old Queen: “Maynard Jackson’s program made all the difference in the world.”

EGM’s current contracts include all four pedestrian bridges at Hartsfield-Jackson International Airport. It’s a family operation. His wife and son work there. So, too, does his daughter, Kelsi Queen-Robinson, who left the teaching profession and got her MBA to help run the business.

“Why work for someone else when you have this nugget (of information) sitting here?” asked Queen-Robinson, 39, looking at her dad.

Queen is president-emeritus of the National Association of Minority Contractors, a role that resulted in him advocating for businesses like his.

EGM Services Inc. apprentice Keith Davis (right) talks with EGM Services Inc. founder and chairman of the board Arthur Queen at the office in Decatur Jan. 24, 2020. Queen credits Maynard Jackson’s set-aside program, which started in the 1970s, with helping him and many other black business owners. ALYSSA POINTER / ALYSSA.POINTER@AJC.COM
Photo: The Atlanta Journal-Constitution

Queen and his daughter recently began a trainee program for glazing windows. One trainee is 29-year-old De Ana Anderson, who wants to start her own business, perhaps flipping residential and commercial properties.

“That was Maynard’s plan,” Queen, leaning back in his chair, said of Anderson’s plan to be a success.

Closing the gap

Rodney Strong has a group picture of Queen, Jackson and other business leaders from the old days. He worked for Jackson and ran the city’s Minority Business Enterprise program under then-Mayor Andrew Young in the 1980s.

Strong says the seeds for Atlanta’s success were planted more than a century ago by what he called the “activist tradition” of W.E.B. DuBois and John Hope, who was president of both Morehouse and what’s now Clark Atlanta University.

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Jackson, he said, came from that tradition, and his program “forced black people in those deals.” The results: Local black-owned companies like H.J. Russell & Co. and C.D. Moody Construction Inc. became national business titans. Those companies and others hired more African Americans, creating working-class communities where Strong says people make more here doing the same work than in other cities, like his hometown of Memphis.

Now a contract compliance officer who has done work with about 60 major cities, Strong said there is work to do to lift up struggling black communities. He believes more must be done to redevelop commercial corridors in some of Atlanta’s historic black neighborhoods, particularly to assist small and emerging businesses.

“We have not addressed them the way we need to,” he said. “We were so busy trying to break down the doors (for businesses to do work with the city).”

Other cities implemented their own versions of the city’s plan. (Atlanta had to ultimately rewrite its program, in part, because of reverse discrimination complaints and court battles.)

Today, the entertainment and the technology industries are the next frontiers for a new generation of black wealth. One-fifth of African American business owners are younger than 35, federal data shows.

In southwest Atlanta, nonprofits like Access to Capital for Entrepreneurs recently offered seed money to small-business owners, particularly those owned by young women of color. Some major companies are exploring ways to help, through the city’s historically black colleges. Dell Technologies organized a recent brainstorming session at Morehouse College.

“We cannot miss out on another industrial revolution without Atlanta being in the mix,” Brian Reaves, the company’s chief diversity and inclusion officer, said in his closing remarks.

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