*The Michigan Chronicle is discussing generational poverty in Detroit, and its history, in this four-part series during Black History Month. In this fourth and final installment, we delve into two women’s stories on generational poverty and success and how we could collectively move forward.
Detroit resident Michelle Swain knows what it feels like to grow up in poverty.
“Not the worst kind of poverty; it was working-class poverty, but we didn’t have a lot of money, lived paycheck to paycheck,” Swain said. “There were five children and while we always had a roof over our head and food to eat it was a struggle for my parents. Living paycheck to paycheck does not allow for savings for things like college and buying homes.”
The real estate broker now heading her own Detroit company, Michelle Renee Swain, said that as a child growing up in that situation, there is a pressure to move out as soon as possible to release some of the pressure on family so there is one less mouth to feed.
As a real estate broker, she said that she finds that people who are in the best situation when buying a house are the ones who were able to live at home for a few years and save their earnings. “It is hard to do that when your family is poor. You have to contribute to bills, family emergencies,” she said.
Bridging the Gap
Swain, who opened up her business in February 2020, (after obtaining her real estate broker license) is in her 18th year as a real estate agent. She primarily works with customers looking to buy and sell homes in Metro Detroit. Swain said that she knows that there is a financial gap between white people and Black people and it’s important to close the gap as much as possible.
“There is no question that the impact of slavery is still with us. Only by building generational wealth will we be able to close that gap, and working for someone else will not get you there. You can gain financial security for yourself and your immediate family working for someone else but [to] build a secure foundation for future generations you have to build businesses and invest,” she said.
Swain added that redlining also contributed to generational poverty, which still has an impact to this day.
“Blacks who reached a level of financial success were still not allowed to buy a home in certain areas,” she said. “These were the poverty-stricken areas where the schools were lacking funding. [If] placed in another area, with a different environment, this is a family that could have started building that generational wealth.”
She added that there is a direct relationship between affordable housing and generational poverty. When a family can’t find affordable housing or when 50 percent or more of their income is going towards housing, “it is like a trap.”
“How does that person ever save enough down payment to buy a house? Put their children through college? Help their children buy their first home? They can’t,” Swain said, adding that Black homebuyers are feeling the pinch.
She is working with buyers approved for $200,000+ and they are struggling to find a home despite having great jobs because they don’t have a large down payment.
“We are not able to put in a competitive offer because they are up against people with down payment money. My white customers in the past have had the advantage when bidding on homes,” she said. “I have had white customers who have bought a condo for their college-age child, I have never had a Black customer do that. That is the kind of thing that starts building generational wealth.”
Swain added that she would like to use her business as a catalyst for increasing the generational wealth in her family.
“Real estate is a sure way to build wealth that can be passed on for generation after generation. I want to use my business to encourage others in my family to do the same, take their talents and work and build for themselves,” she said. “As a people, we are so smart, so strong and have so much to offer, but we give it away. We slave for other people our whole life and the only thing we have to show for it when we leave is a bill and a GoFundMe. I want to see more of us take our talents and skills and use them to enrich their own family, not someone else’s family.”
Karen Burton, a designer, entrepreneur and co-founder, co-owner, and CEO of SpaceLab Detroit, a coworking and shared office space in downtown Detroit, knows, too, about creating generational wealth.
Her grandmothers were a big influence in her life. Her maternal grandmother, Louise Tarver, was a registered nurse — the first Black nurse supervisor in the city of Flint in the 1950s-1960s. Her paternal grandmother, Iva Davis and her husband, Evans Davis, opened up a store in the southside of Flint around the late 1940s when her father was seven.
“It was across from an elementary school,” Burton said adding that when kids got out of school they would run to her family’s store and during the Great Migration her grandparents let Black families new to the neighborhood put groceries on credit. “When it was announced that one of the highways was coming to the neighborhood, they moved the store a couple of miles away. They later closed around 1976.”
The Great Migration was a major movement which saw almost five million southern Blacks move to the north and west between 1915 and 1960. During the early wave, the majority of migrants moved to major northern cities such as Detroit, Chicago, Pittsburgh, and New York.
“We know that even with the federal government saying there is an urban renewal or bringing highways through the city, that impacted a lot of Black families — people had to give up their houses that they worked hard to acquire,” Burton said. “Give up their business and sometimes Black families didn’t recover from that.”
Burton said that what happened in Flint to her family, happened in Detroit’s Black Bottom area, among other places in America.
Burton, who has worked on large-scale architectural projects in Michigan and Las Vegas, Nev., said that it is important to break out of the cycle that is generational poverty whenever possible.
“[It is] important to keep moving forward — access all of the resources that are available and do some research if possible,” she said, adding that her paternal grandmother was around when she opened SpaceLab.
“She was so excited and so proud that we opened this business,” she said. “When I was a kid I really didn’t think much about [having] several entrepreneurs in my family.”
She added that she tells the story about how her paternal grandmother had to start working when she was 10 years old — her paternal grandfather, too, who didn’t finish the third or fourth grade had to work during the Depression.
“They were really poor,” she said, adding that later some of her family had relative success in their chosen professions.
The apple doesn’t fall far from the tree, as Burton is relishing in her success, and that came with a great realization: starting a business can be difficult, especially as a Black person decades earlier.
“I look at the resources that are available now for small business owners and just realizing back then my grandparents didn’t have that. My uncle who owned a business in the ‘80s didn’t have that. I feel really blessed and fortunate… I can look to those role models. They kept going.”
Where do we go from here?
A U.S Census study revealed that 14.1 percent of Michigan residents live in poverty. In Wayne County, 21.7 percent of residents live in poverty. Tylene Henry, MBA, a registered broker with Mass Mutual, wants to help bring that number down through the education of each of her clients that she helps document their financial goals and develop action plans to execute. A majority of her primarily Black clients in the metro Detroit region range in age, finances and professions.
Henry said that to truly move forward from generational poverty, multiple generations need to gain acumen from financial institutions geared to help families, in particular Black families.
“I think it is definitely a community conversation, a family conversation,” she said, adding that even if one person does all they can to build wealth and protect their assets, multiple external factors, including family obligations and the like, need to be considered.
“If we don’t communicate and collaborate, we don’t benefit from having financial acumen in our communities,” she said, adding that she would not be in this space she’s in today for learning about wealth management. “That’s when I got exposed to what is estate planning, what is a trust — what is the difference between whole and term life insurance … if I never had that exposure, if I was just operating in my silo, we would never really understand the benefits.”
Henry said that the characteristics of her most successful clients are:
- Organized: They know their current situation (assets/liabilities), are clear on their goals, and have a written strategy.
- Educated: Not formal education, but empowered with information that is relevant to their goals and current situation.
- Action-minded: They take action, establishing good habits and building upon them.
Rome wasn’t built in a day. It takes clarity, time and persistence to achieve financial wellbeing and success.
“Good habits happen over several generations,” Henry said. “A majority of our counterparts didn’t get to where they were [it took] several generations.”
Omari Hall, a Learning Experience designer at GreenPath Financial Wellness, said that millennials have over $1 trillion in debt, the most of any generation in U.S. history.
According to the Federal Reserve’s 2019 survey of consumer finances, the median wealth of white families is $188,200 compared to $24,100 for Black families.
“Centuries of racism and structural inequalities in the U.S. have contributed to this wealth gap,” he said, adding that “there is essential work that needs to be done to empower Black families, overcome systemic barriers and gain access to the knowledge needed to change this trend.”
“That’s why we highly encourage people to reach out to trusted organizations like GreenPath so that we can look at your entire financial picture and help devise a personalized plan,” Hall added. “When building generational wealth, we encourage individuals and households to look at how they are managing debt and liabilities, how you approach spending, managing assets, and homeownership. A home is not just a place to live, it’s also a valuable asset to your financial portfolio and gives you more financial freedom in both the short- and long-term.”