Black billionaires

According to sociologist Dalton Conley, there are two theories that explain the Black-White wealth gap. The “historical legacy thesis” contends that the current wealth gap was created by the “head start” that White people have had in amassing wealth and inheriting wealth from generations prior.[10] Continuous racial discrimination against Black Americans also contributes to this theory.[10] The “contemporary dynamics thesis” explains how modern phenomena, specifically systematic racism in the housing and credit markets, are the main source of the wealth gap.[10]

In 1994, the typical Black American family had a net worth of $9,800, while a typical White family had a net worth of $72,000.[10] By 1997, the median family income of African American families was up to $26,522, 55% of the $47,023 of White families.[10] Black wealth mostly consists of home equity and car ownership, while white wealth also includes financial assets, "the key to wealth accumulation".[10] For this reason, the wealth gap between blacks and whites has continuously grown since the civil rights movement of the 1950s and 1960s.[10]

In 1860, freed Black Americans owned approximately $50 million worth of land.[10] Land redistribution was promised as reparations for freed slaves by President Andrew Johnson after the Emancipation Proclamation.[10] This promise was not fulfilled for many. For those who did receive land, the ownership was temporary as land was eventually sold off to White individuals.[10]

Former slaves faced a slim job market and many were forced into sharecropping, a system in which laborers rent land from a landlord to grow crops and provide a share of their crops as rent.[10] Many blacks tried to escape this by getting wealthy and buying the land, but these attempts mostly failed.[11]

1900-1938 marked what is considered the “Golden Age of Black Business.” In response to Plessy v. Ferguson (1896) which upheld racial segregation laws, Black Americans established successful eateries, restaurants, hotels and banks.[12] The coalition of Black businesses and entrepreneurs was coined “Black Corporate America.”[12] During this time, Black businesses grossed sales of up to one million dollars.[12] In 1900, Booker T. Washington created the National Negro Business League and Maggie Lena Walker became the first American woman and first Black American woman to establish a bank in 1903.[12]

Greenwood, Tulsa in Oklahoma was an example of a prosperous Black neighborhood in the early 20th century and was one of the richest Black neighborhoods in the country. Known as “Black Wall Street”, Black attorneys and doctors were highly concentrated in the area, as were successful Black grocers, hotels and restaurants.[13] In 1921, "Black Wall Street" was destroyed in the Tulsa race riot, when white residents of Tulsa attacked it on the ground and by plane, dropping firebombs. Ten thousand black people were left homeless.

Black inventors such as George Washington Carver–who developed a system to improve soils after cotton planting–helped develop early ideas for technology, however they often had to sell their patents to corporate White America “because they did not have the same access to venture and development capital.”[12] Leading Black female entrepreneurs included Madame CJ Walker and Annie Turnbo-Malone. Walker invented several beauty products and was considered the wealthiest self-made woman in America in 1919. Turnbo-Malone also developed cosmetic products for Black women.[12]

In the period of 1939-1964, Black businesses grossed sales in the millions.[12] Black American entrepreneurs sought defense contracts–allowing them to produce materials to be used in the war–during World War II.[12] Although only a few received contracts, this marked the first time a large-scale consumer, the U.S. government, bought products from Black businesses.[14] A $4 million defense contract was given to The McKissick Brothers Construction Company to build an airbase at Tuskegee Institute to train the Black 99th Pursuit Squadron. The company employed approximately 2,000 Black employees.[12]

S.B. Fuller led Black Corporate America in the 1930s with his successful door-to-door sales business. He acquired several White companies which sold hair care products and was successful until the 1950s, when White consumers found out that Fuller was Black. The White consumers pulled out of the market immediately and Fuller went bankrupt.[12] In 1954 the Brown v. Board of Education decision, which desegregated schools, led to more widespread calls for economic equality.[12]

Black business sales first reached 100 million in 1965.[12] Protest prompted the federal government to create Black Capitalism initiatives such as President Nixon’s 1969 Executive Order that created the Office of Minority Business Enterprise.[12]

According to Dalton Conley, by 1971, Black banks had received $44.9 million in government deposits.[15] However, these deposits, which were “unstable accounts from government agencies, eventually hurt Black banks because their volatility meant that they required higher servicing costs.”[15] "One study even found that such deposits were actually more costly to Black banks than their regular customers’ deposits.”[15]

Black business expanded by continuing to seek defense contracts. One example was electrical engineering company Jackson and Tull, which received contracts from NASA and the U.S. Department of Defense in 1974.[12] Black innovators were also involved in the rise of the internet and technology. Nigerian immigrant Phillip Emegwali created a 65,000 processor computer that produced 3.1 billion calculations per second, laying the groundwork for Apple’s Dual Processor Power Mac and IBM’s 65,000 processor supercomputer. He received the 1989 Gordon Bell Prize for supercomputing.[12]

Starting in 1990, businesses in Black Corporate America grossed sales in the billions of dollars.[12] Despite this upward trend, there was not a Black billionaire in U.S. dollars until 2001. The 2000 edition of Forbes 400, which documented individuals who amassed wealth from the tech boom, did not feature any Black individuals.[16] The 400 individuals on the list had a net worth of more than one trillion, which was more than the wealth of all 33 million Black Americans combined.[16]

However, the amount of African Americans earning degrees in business has increased since the 1970s. “The number of African Americans earning bachelor’s degrees in business increased by 316.6% between 1976 and 2008, whereas the number of African Americans earning MBAs increased by 1,399%, from 1,549 to 23,220.”[17]

In 2001, BET (Black Entertainment Network) owner Robert L. Johnson became the first Black billionaire in American dollars, with a net-worth of $1.6 billion. The success of hip hop music and Black music videos stimulated Black Corporate America and launched BET to its success.[12] Prominent Black female entrepreneurs like Oprah Winfrey and Cathy Hughes saw success as they entered the realm of communications. Oprah became the first Black female billionaire in 2003. Cathy Hughes became the first Black American woman to take her company--Radio One–-public on the New York Stock Exchange in 2004.[12]

As of 2019, there are 15 billionaires of full or mixed Black ancestry in the world. Out of the total 2,200 billionaires in the world, less than 0.77% of the U.S. dollar billionaires are Black.

On February 6, 2003, Martin Bashir asked Michael Jackson how much he was worth, and Jackson replied: "It's way up there." Bashir then asked, "A billion dollars?" to which Jackson replied, "It's over there." Bashir asked for confirmation: "Over a billion dollars!" to which the star replied "Yes."[37] Jackson never appeared on the Forbes Billionaire list in his lifetime nor was he ever ranked among Forbes 400 richest Americans. Estimates of Jackson's net worth during his life range from negative $285 million to positive $350 million for 2002, 2003 and 2007.[38][39] In August 2018 Forbes reported that Jackson's total career pretax earnings in life and death were $4.2 billion.[40][41]