As a society we’ve become alarmed by the lack of financial literacy among young people, and in response, many leading cultural and financial institutions have developed programs to help young people develop their knowledge of money matters. In fact, non-profits and schools spend more than 600 million dollars each year on financial literacy education. 1 However, not one dime is spent on another type of literacy which is equally, if not more important - “social capital literacy.”
Social capital literacy is the competency to audit, access, build, maintain, and manage connections effectively to improve financial, social, and community well-being. Through social capital literacy, students will broaden their understanding of the social capital building process, evaluate the significance of each person in their network, and develop strategies to leverage the support of these assets to improve their economic and social well-being.
Social Capital Is Not Distributed Equally
There are many people in America who believe that social capital is distributed evenly among all people. They believe that each young person, regardless of color, has the same opportunities as every other young person. They believe that the playing field is level and that if you can’t get a good job, then it’s your fault.
These are some of the same people who will tell young people that when slavery ended in 1863, everything was suddenly equal.
Of course this is nonsense. After the Civil War, freed Blacks were pushed into a racist system designed to repress them in education, home ownership, personal freedom, and employment. Conditions have changed since then, but not enough. Today, it’s far more likely that the average white college graduate will have a reservoir of generational social capital that vastly exceeds that of her Black counterpart. The white student’s father or mother may work at a company, or belong to a country club, or be a member of a college honor society, or have other deep ties to other whites that go back generations. It’s often easy for a white student’s uncle or mother or family friend to say, “Does Junior need a job? Let me make a phone call to a friend.” When the white student benefits from this deep-rooted network, it’s not seen as something unfair; it’s market efficiency. Why go through the bother of combing through the help wanted ads and posting your resume on Glassdoor when Uncle Bob can get you a position at the bank just by calling his golfing buddy, the bank president?
For generations, gaining an advantage by using help from family and friends has been a powerful, hidden force driving inequality in the United States. It’s closely linked to the sustained suppression of Black generational wealth, which was accomplished through two powerful tools: the “redlining” of neighborhoods to prevent Black families from buying houses, and the closure of upper-level jobs to Blacks so that they were consigned to low-paying service jobs. Less income meant less education, and lack of property wealth that could be passed on to the next generation meant that each new generation was forced to start at the bottom.
Here’s a simple example. When Jeff Bezos founded Amazon.com in 1994, his parents invested $300,000 in the new company. The venture was risky, and they fully expected to lose their money, but they could spare it. The company turned out to be wildly successful, but the point is this: How many Black families can afford to speculate $300,000 on their child’s business venture? Not many. They just don’t have that level of generational wealth.
The Social Capital Literacy Imperative
No one can blame Jeff Bezos for taking money from his parents. It’s all part of one generation giving a helping hand to the next. It’s the way it should be for everyone.
This is why it’s imperative that we help young Black people do three things:
1. Build robust social capital networks. Job training programs that impart skills are just the first step. The important second step is to help weave young people’s connections to familial, developmental, and gateway social capital supports, gainfully employed people who will champion their entry into gainful careers and beyond.
2. Teach young people how to audit, access, build, and maintain social capital connections and give them tools to do so. Ensure their social networks are composed of people who are successful and motivated to succeed. In building social capital, quantity alone does not equal quality. One bank vice president is more valuable than 50 shift managers of fast-food restaurants.
3. Systematically incorporate a social capital framework into current educational and workforce development policy and programming. A social capital framework is an inseparable system of structures, policies, and procedures that recognize that social networks are a key determinant of labor market success and it strategically helps students build and maintain social capital with a wide range of pro-social capital assets within and outside their community.
Society has never been more ready for change. We are poised on the precipice of unprecedented economic and social progress. Let’s make this change happen for youth through connections and watch a world of opportunities unfold that those connections will create.
Edward DeJesus is the Founder and President of Social Capital Builders.