Global Journal of Management and Business Research, B: Economics and Commerce, Volume 22 Issue 4

Racial and Community Wealth Disparity the Bane of HBCUs: A Wealth Ecology Model Relational Perspective Ebenezer Seisie-Amoasi α & Oliver Jones, Ph.D. σ 1 Global Journal of Management and Business Research Volume XXII Issue IV Version I Year 2022 ( ) B © 2022 Global Journals Abstract- Racial wealth disparities in the U.S. continues to persist despite community, state and federal governments programs to arrest the slide. Contemporary community wealth creation approaches using anchor institutions concepts to bridge the gap assume the wealth improvement duality of the community and the anchor institution coming together with external agents of support. For an HBCU (Historical Black Colleges and Universities) as anchor institution, the improvement duality assumption links its fortunes with that of its community served. The study performs a regression analysis to determine the degree of the relationship and its direction. Measured African American family wealth status using the SCF data on median US household wealth and HBCU school choice by annual enrollment numbers from NCES digest of educational statistics, the analysis yields significant positive effects of student wealth status on HBCU school choice. This positive direction finding does not support the research question that a decrease in African American students’ perceived wealth status leads to a corresponding increase in their HBCU school choice. The assumption that the catchment community served by HBCUs is the source of the school's financial and growth challenges is not supported by the findings. The result shines a light on the benefits of the anchor mission to HBCUs and informs HBCUs’ student recruitment strategies. Keywords: racial wealth disparity, median household wealth, anchor mission, behavioral intention, school choice. I. I ntroduction acial wealth disparities among minority communities in the U.S. and around the globe have persisted despite the improvement in global democratic norms and the proliferation of market and capitalist principles. Most have attributed the phenomena to inferior culture (Lavoie, 2002), values and planning (the lack thereof) and aptitude of African Americans (Galenson, 1972; Wilson, 1987; Brimmer, 1988; Lawrence, 1991; Szydlik, 2004; Frazier, 1957; Lewis, 1963; Banfield, 1974; Charles et al. 2009). Lavoie (2002) says, African Americans need to “tell good stories” about the markets to inject the values system Author α σ : James T. George School of Business, Hampton University. e-mails: ebenezer.seisieamoasi@my.hamptonu.edu , oliver.jones@hamptonu.edu R integral to the enterprise school of thought inherent in capitalist society. Thus, appreciating culture’s role in economics could provide likely different paths toward economic prosperity for different cultures. More importantly, others have attributed the wealth gap to knowledge and to structural and unequal ownership opportunity. Including, discriminatory practices and racialized policies in labor markets (Herring & Henderson, 2016), income inequality (Wolff, 2017) and of human capital (Robb & Fairlie, 2007). Thus, the importance of human capital, education, knowledge driving income form significant ingredients to improving the wealth status of minority communities. Racial income inequality is disproportionately affecting African Americans as data from the Federal Reserve survey of household wealth shows African Americans income have consistently lagged all races (Wolff, 2017). Coupled with higher debt proportions (Rodney & Mincey, 2020), the wealth wellbeing of most African American families and communities continues to be significantly under pressure. Within most African American communities sit Historical Black Colleges and Universities (HBCUs) with the sole purpose to educate Black Americans and have continued to produce increasing proportion of all African American college graduates (Wilson, 2007; Harper, 2019). HBCUs have shouldered systematic equity challenges financially and academically for decades due to both internal and external barriers (Harper, 2019; Simms et al., 1993). Inequitable federal and specifically state funding rates, stagnant and declining enrollments partially spurred by increasing college operating cost, have had significant impact (Kim & Conrad, 2006). Brown and Burnette (2014) find that PWIs have higher capital spending patterns, for example, than HBCUs. HBCUs have been plagued with declining economic status and have student retention challenges (Harper, 2019; Cheatham et al, 1990). Higher education costs have increased dramatically requiring most African American students to use loans (Rodney & Mincey, 2020) with attendant student loan burden impacting negatively on income or wealth (Espinosa et al. 2019). Financial assistance availability and cost of attendance are substantial predictors of African American students’ decision to attend higher education as well as success and