Why aren't there black universities in our technology and financial centers?

HBCUs can increase economic growth and lift minority communities

Economic growth is maximized when it’s not exclusive; when it invites engagement and diversity, when more people participate.

Yet, even in our most innovative cities, we often fail to engage existing racially diverse communities to fuel growth. This is part of a series of essays on the future of capitalism, innovation and humanity.

The more people who bring different perspectives and backgrounds to a problem, the better the solutions will be. Innovation comes from diverse thinkers and the movement of people and ideas and inspiration in an open adaptive system.

Without diversity (and we can see this when neighborhoods are gentrified), we end up with an environment characterized by a sense of uniformity and homogeneity, which decreases the activity of innovation. The exchange of ideas becomes increasingly one dimensional with a greater number of people who have similar backgrounds and ideologies.

Ultimately, an economically segregated society stunts economic growth. It also leads to wealth and racial disparities and other externalities.

A more inclusive economy will grow faster and bigger than any exclusionary economy. We all stand to benefit when a broader base of people participates in an economic expansion.

There are innumerable reasons that have contributed to the exclusion of minority communities from economic opportunity and prosperity, but I’ll address just one in this article.

Education.

The Rise of the American University System

In the late 1950s and early 1960s, California created a higher education system that became the model for the rest of the country and the world.

It began, at least symbolically, with Sputnik I, which was launched by the Soviet Union in 1957. It was the first satellite to circle the Earth and marked the beginning of the Space Race as part of the greater Cold War.

In response, in 1958, Congress passed the $1 billion National Defense Education Act to expand high school education in science, math and foreign languages.

As Baby Boomers were starting to reach college age, the pressure was on to meet the coming demand. If America was going to compete with the USSR or lead the world in scientific accomplishment, it needed a bigger educational funnel and expansive university system.

University of California President Clark Kerr and subsequently California Gov. Pat Brown (Former Gov. Jerry Brown’s father) recognized the importance of the moment.

Kerr and Brown established a master plan for a three-tiered university system: University of California system, California State Colleges (CSC) system and California Community Colleges system. Kerr and Brown’s vision provided a educational path for an unprecedented number of students.

It also became a model for the rest of the country and the world.

California’s economy today, the 5th largest economy in the world (ahead of India and behind Germany), was largely ignited and driven by that vision.

Minority Communities Left Behind

Unfortunately, some 60 years later, minority communities haven’t benefited from the university system as they could.

Compared to white students, black and Hispanic minorities don’t have the same access to college prep courses in K-12 levels, don’t qualify for admittance to universities at the same levels and don't have the same completion rates within universities.

At the K-12 level, according to a study by CLASP, only 57% of black students have access to the full range of math and science courses necessary for college readiness while 81% of Asian-American students and 71% of white students have access to such courses. 

In California, more than 50% of all high school seniors are Hispanic or African-American, but only 6% of African-American and 7% of Hispanic students were eligible for admission into the University of California in a 2008 state review. It’s unclear if those numbers have improved any since then.

Black and Hispanic students who attend college have about a 30% lower completion rate compared to white and Asian students. According to a 2017 study by the National Student Clearinghouse Research Center, Asian and white students had much higher completion rates (63.2 percent and 62.0 percent, respectively) than Hispanic and black students (45.8 percent and 38.0 percent, respectively).

At predominantly black institutions (PBIs), most of which are community colleges, only 15% of black students graduate and 50% drop out after the first year.

The problem is foundational. Many African-American and Hispanic communities have been structurally disenfranchised and don’t have a direct personal connection to the educational system, to its benefits and opportunities.

The problem is also generational, which further slows progress. For example, if the majority of parents in a minority community have not gone to college, that community has fewer role models who can light the path.

The statistics against those communities are daunting and in themselves can discourage individual prospective students before they even have a chance.

Whatever any of us hope to achieve in life, it starts by having the belief that it’s possible and within reach.

Can we say that young people in minority communities have the same beliefs about their potential in life as those in predominantly white communities?

The Legacy of HBCUs

There are 101 Historically Black Colleges and Universities (HBCUs) in the United States. Some of these institutions date back to before the Civil War and provide a profound perspective on the history of black education in America.

Because they are clustered mostly in the South and Southeast, HBCUs are under the radar for many Americans. Spelman, Morehouse and Howard are probably the most well-known. Vice presidential candidate Kamala Harris went to Howard.

HBCUs are in 19 states, the District of Columbia and the U.S. Virgin Islands. According to the United Negro College Fund (UNCF), HBCUs enroll almost 300,000 students, approximately 80 percent of whom are African American, and 70 percent are from low-income families.

This list isn’t representative of all black colleges. To be designated as an HBCU, a college had to be established before 1964, according to the Higher Education Act of 1965. 

In 2008, a new classification was established for Predominantly Black Institutions (PBIs) to provide federal grants to minority-dominant schools. PBIs include colleges and universities that have at least 40% African-American students and at least 50% low income or first-generation degree seeking students. PBIs are largely made up of community and state colleges, but may also include HBCUs.

Similarly, the U.S. Department of Education maintains several lists of accredited minority institutions.

Community colleges provide a great first step toward a four-year education, but they aren’t necessarily inspirational to young people.

Kids want to dream about making a difference in the world, about achieving accomplishments that reflect on their ideas and values. Those dreams are molded largely by the people and community around them. Without examples of success and role models and institutions that can light the way, their aspirations and dreams might not be as ambitious as they could or should be.

HBCUs Offer a Direct Path to the Middle Class

According to UNCF, HBCUs make up only three percent of the country’s colleges and universities, but they enroll 10% of all African American students and produce almost 20% of all African American graduates.

Likewise, UNCF says HBCU graduates can expect to earn an additional $927,000 in their lifetimes, which is 56% more than they could expect to earn without an HBCU degree or certificate.

A 2019 study by the Rutgers Center for Minority Serving Institutions found that HBCUs are a pipeline to the middle class for minority students. Approximately 70% of students at HBCUs reach the middle class or higher by their mid-30s.

Those numbers would likely be higher if HBCUs had anything close to the funding of predominantly white institutions (PWIs).

Funding and endowment levels for HBCUs are abysmally low. According to Yahoo Finance, the total combined endowment for all HBCUs (101 schools) amounted to $2.1 billion. For comparison, the endowment for Harvard University alone is about $35.7 billion. Further, the endowments of more than 50 predominantly white institutions (PWI’s) are individually larger than all HBCU’s combined.

Several technology billionaires recognized the need and recently made large donations. In June of this year, Netflix CEO Reed Hastings and his wife donated $40 million apiece to Spelman College and Morehouse College and $40 million to the United Negro College Fund. Then, in July, Mackenzie Scott (former wife of Jeff Bezos) donated $40 million to Howard University.

HBCUs need funding just to survive. The federal government, UNCF and other donors should do everything possible to help these schools with their mission and help their students succeed.

Most HBCUs are Clustered in the South and Southeast

Few HBCUs are located where the highest paying jobs are, in our financial and technology centers, where the cutting edge of innovation is happening.

Most HBCUs are in the South and East regions of the country: North Carolina has 12. Georgia has 12. Alabama has 15. Texas has 9. Tennessee has 7. Mississippi has 7.

Meanwhile, Pennsylvania has 2. California has 1. New York has none. Washington State has none. Oregon has none. Illinois has none. That’s not to say that these states don’t have good colleges that provide excellent educations to large numbers of minorities. They do.

But they don’t have symbolically black or Hispanic colleges, whose mission is to represent and serve their communities.

There are no HBCUs in Silicon Valley or Seattle or Chicago or New York, which are hotbeds of economic opportunity. Howard University, in Washington, D.C, is likely best positioned to high-paying jobs in the nation’s capital. Likewise, there are several HBCUs located near the expansive high-tech Research Triangle Park in North Carolina. While these, along with Spelman and Morehouse in Atlanta, provide excellent conduits to high paying jobs, it’s not enough.

It’s the big cities that drive innovation and economic growth that need these institutions, to provide visible stimulus to minority communities and more importantly, to young people in those communities, who can aspire to become part of a great African-American or Hispanic university in their own community as they’re growing up.

The influence an African-American or Hispanic university goes well beyond just the students who enroll. It becomes a point of community pride and an inspiration for minorities in pursuing the American Dream. It becomes a symbol for possibility and empowers young people in minority communities to imagine their own potential without limits.

The big cities that are drivers of economic growth need them: San Francisco/Oakland/San Jose, Seattle, New York, Los Angeles, Chicago, Portland, Philadelphia, Boston. Although this is an incomplete list, it's a start. It's where the highest-paying jobs are and where the conduit from minority communities to those high-paying jobs needs to be improved.

Let’s Put HBCUs in our Financial and Technology Centers

We can build new African-American and Hispanic colleges and universities. We can also invite existing HBCUs to establish new campuses in the financial and technology epicenters. Both models provide possibility.

I’ll conclude this piece by challenging the leaders in our technology and financial centers to build black and Hispanic universities where it matters most, where they can stand as both educational institutions and inspirational symbols to those minority communities, and provide a direct conduit into the best job markets in America.

The HBCUs provide a cultural and economic roadmap for minorities to reach the middle class. It’s time we built minority-focused institutions in our financial and technology centers. The impact to the economy, and the benefit to all of us, would be exponential.

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Thank you for reading.

Tags: #BlackLivesMatter #BLM #WealthDisparity #EconomicGrowth #Innovation #Education #Gentrification #Humanity #RoadAhead