The Hustle Economy

The real worth and value of African Americans

2010 Census…

Reports that the current US black population is at…

42 MillionFrom 12.3 % of U.S. in 2000

To 13.6% of U.S. in 2010

Total $1 Trillion AA buying power

* African American Market in the U.S., Package Facts, 2008

“Many (African Americans) seem to continue to be lost in the illusion of being rich…

“According to the Census data…we can’t afford it…

“…based on these data…the average African (American) can not truly afford the lifestyles that we lead…”

The Income Disparity Among African Americans: We Ain’t Ballin’” Brandale Randolph, 3/4/11, http://www.sicklycat.com/2011/03/04/the-income-disparity-among-african-americans-we-ain%E2%80%99t-ballin%E2%80%99/

CONVENTIONAL WISDOM

The Census reports the official taxable income data (which fuel the conventional wisdom regarding the economics of the black community) comparing:

THE EMPLOYED THE UNEMPLOYED

However, this view of our community is one from the outside-looking-in…

A more accurate view of the community (from the inside) would capture all the ways income is generated and then provide a better descriptor:

EAP: ECONOMICALLY ACTIVE PEOPLE

Informal Economy Literature Review, Jan L. Losby, John F.Else, Marcia E. Kingslow, Elaine L. Edgcomb, Erika T. Malm, and Vivian Kao, December, 2002, www.kingslow-assoc.com/images/Informal_Economy_Lit_Review.pdf

An economic state of making money, no matter whether or not taxes are paid, has spawned lots of academic phrases :

Informal EconomyShadow EconomyUnderground EconomySubterranean EconomyIrregular EconomyHidden EconomySubmerged EconomyUnrecorded EconomyClandestine EconomyNon-Official Economy

Informal Economy Literature Review, Jan L. Losby, John F. Else, Marcia E. Kingslow, Elaine L. Edgcomb, Erika T. Malm, and Vivian Kao, December, 2002, www.kingslow-assoc.com/images/Informal_Economy_Lit_Review.pdf

The Hustle Economy

Urban Dictionary Definition of Hustling:Hustling in making money out of everything, no matter what it is

At Footsteps, we take the POV of our consumers as are our guide and we call it what they would call it:

$0-$7,500 $7,501-$15,000

$15,001-$20,000

$20,001-$40,000

$40,000 +

ANY INFORMAL ACTIVITY

58% 61% 59% 54% 49%

Between 50% to 60% of our consumers, at a variety of “official” income levels, are engaging in informal work

Informal Economy Literature Review, Jan L. Losby, John F. Else, Marcia E. Kingslow, Elaine L. Edgcomb, Erika T. Malm, and Vivian Kao, December, 2002, www.kingslow-assoc.com/images/Informal_Economy_Lit_Review.pdf

Informal Work Engagement at Various Income Levels

PRIMARY WORKS FOR COMPANY

EXTRA WORK FOR CURRENT EMPLOYER

Person works for someone else (AA: 29%)

• Works off-the-books• Works under-the-table• Paid in cash and not taxed

• Works extra hours on weekends (paid in cash not taxed)

PERSON OPERATES OWN SMALL BUSINESS

DOES SPORADIC ODD JOBS, SERVICES, OR PRODUCTS

Person self-employed (AA: 71%)

•Cash-only exchanges• On-going, regular• Business seems as primary income•May invest income into business

• Seasonal work• Helps keep household expenses down by bartering for services or low-cost products•Not as formalized as a “small business

Informal Work Typologies

Informal Economy Literature Review, Jan L. Losby, John F.Else, Marcia E. Kingslow, Elaine L. Edgecomb, Erika T. Malm, and Vivian Kao, December, 2002, www.kingslow-assoc.com/images/Informal_Economy_Lit_Review.pdf The Informal Economy: African Americans, Jan L. Losby, Marcia E. Kingslow, and John F. Else, 2003, ISED Solutions

“when applied by researchers in Los Angeles County, between 9 and 29 percent of county employment may be informal…based on an estimated 811,000 informal workers…a conservative estimate of $7,200 a year in average earnings…

Informal Economy Literature Review, Jan L. Losby, John F.Else, Marcia E. Kingslow, Elaine L. Edgcomb, Erika T. Malm, and Vivian Kao, December, 2002, www.kingslow-assoc.com/images/Informal_Economy_Lit_Review.pdf

“On average, people who are informally operating businesses earn more per month ($1,013) than do people who are employed informally ($702)…”(the average yearly income for all is $10,920)

The Informal Economy: African Americans, Jan L. Losby, Marcia E. Kingslow, and John F. Else, 2003, ISED Solutions

A Tax-free Supplemental Income Between $7K -$11K

Why Hustle?

First and foremost, it is about

$’s

But it is also about:

Wanting to be in controlWanting independenceWanting a creative outletWanting a flexible scheduleWanting a sense of security

The Informal Economy: African Americans, Jan L. Losby, Marcia E. Kingslow, and John F. Else, 2003, ISED Solutions

A Tale of Two Hustles

Some have skills that they want to maximize; some of which they may not be using in their formal job engaged

Some have few formal job options open to them either because they have little education and/or menial skills

But for many, because it just what we do…

In their research, Jan Losby and colleagues found that many African American respondents who were engaged in the Hustling Economy had grown up watching their elders doing the exact same thing

“When I was 10 or 11 years old, my dad used to take me around to relatives housed and different family members that needed work done. I just got really interested…”

“I’m used to seeing people with extra jobs or working on the side….”

“The majority of people …probably work informally…I don’t think that’s really unusual…at least not for the people in my neighborhood…”

The Informal Economy: African Americans, Jan L. Losby, Marcia E. Kingslow, and John F. Else, 2003, ISED Solutions

This is a part of the AA Community’s DNA

Since African Americans have been in this country we have had an informal economy that has supplemented and sustained us…

Throughout formal segregation it was a community-wide survival mechanism

Despite the advent of the Civil Rights Act, the spirit of entrepreneurialism is still alive in our communities no matter our income brackets

Stylin’, African American Expressive Culture, Shane White and Graham White, 1998 Cornell University

“There are two informal economies, says Saskia Sassen, a sociology professor at Columbia University in New York...

“You have a poverty kind of informal economy, and you have an informal economy that feeds into the high end,” she says. These are creative professionals such as freelance designers and performers...”

“America’s ‘shadow economy’ is bigger than you think – and growing,” Taylor Barnes, The Christian Science Monitor, 9/12/09, http://www.csmonitor.com/Business/2009/1112/americas-shadow-economy-is-bigger-than-you-think-and-growing

Formalizing the Informal

When the Kaufman Index of Entrepreneurial Activity: 1996-2009 reports that the entrepreneurial activity rate for African Americans has increased to highest rate over the past decade and a half and an Uptown Magazines study suggests that mass affluents are leading the charge as 53% of them are engaged in full time or part time entrepreneurial ventures for the most part it is just a formalizing of what has been going on in our community on an informal basis because for many they want to be in compliance…

Hustlin’ Raison d’etre

Whether the hustlin’ is informal or as it is now considered to be -- “entrepreneurial” -- African American culture has historically emphasized and reinforced independence survival mechanisms that have continued to pay dividends for black folks…

They call me the Boss, I be callin’ the shots,It’s Rick Ross, that boy be ballin’ a lot

Everyday I’m, everyday I’m, everyday I’m hustlin’

Real African American Worth

Official Economy The Hustle Economy