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Human Capital Accumulation as a Source of Black Economic Empowerment

Human Capital Accumulation as a Source of Black Economic Empowerment. A Black History Month Presentation Dr. Frank Martin Southern University at New Orleans February 23, 2010. Human Capital Concept.

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Human Capital Accumulation as a Source of Black Economic Empowerment

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  1. Human Capital Accumulation as a Source of Black Economic Empowerment A Black History Month Presentation Dr. Frank Martin Southern University at New Orleans February 23, 2010

  2. Human Capital Concept • Human capital can be defined as “the knowledge and skills that make a person productive” or alternatively as the “personal stock of knowledge, know-how, and skills that enables a person to be productive and thus earn income” (McConnell, Brue, and Flynn, p. 509, 283).

  3. Gary Becker on Human Capital • Gary Becker, made the following observations, “Some activities primarily affect future well-being; the main impact of others is in the present. Some affect money income and others psychic income, that is, consumption. Sailing primarily affects consumption, on-the-job training primarily affects money income, and a college education could affect both. The effects may operate either through physical resources or through human resources… The many forms of such investments include schooling, on-the-job training, medical care, migration, and searching for information about prices and income”, (Human Capital, p. 1).

  4. Forms of Human Capital Investment • Schooling Knowledge, especially basic literacy, leads to greater productivity and earnings. • On-the-Job Training 1. As important as education in explaining earnings 2. Education (schooling) and training together are greater than the sum of their parts. • Medical Care Good health makes a person more productive.

  5. Forms of Human Capital Investment • Migration Migration from areas of surplus labor to areas of labor shortages (or from areas of low labor productivity to areas of high labor productivity) leads to higher productivity and higher earnings. • Searching for Information About Prices and Income 1. Through searching you find the job where your productivity is greatest thereby earning higher wages than you would have if you had not searched. 2. Searching around for the lowest price stretches your money. • Learning Good Work Habits Good work habits such as punctuality and good attendance make for greater productivity

  6. Schooling • 1900: 44.5% of the African-American population is illiterate • 2000: 80% of African-Americans are high school graduate or more; more than 16% are college graduates

  7. Migration • At the beginning of the 20th Century, 85.4% of the black population lived in rural areas or country districts (the country). A hundred years later (2000), 88% of the African-American population lived in Metropolitan Areas. In 1900, 89.6% of the African-American population lived in the South. By the year 2000, only 54.8% of the African-American population lived in the South.

  8. Farm to City Migration • The migration from the farm to the city was a human capital investment because wages were higher in the city than in the country. During this period, the white population also shifted from the farm to the city. A surplus of farm labor was constantly being created by the huge increases in productivity in agriculture. Farmers were able to produce more and more food with fewer and fewer workers.

  9. Migration from South to Northeast, Midwest, and West • This was a migration from a low wage area to higher wage area.

  10. Occupational Distribution 1900 • Agricultural Pursuits 58.21% • Professional Service 1.18% • Domestic & Personal Service 23.94% • Trade & Transportation 7.68% • Manufact. & Mechanical Pursuits 9.02% • TOTAL 100.0%

  11. Occupational Distribution 2000 • Managerial & Professional Specialty 21.7% • Technical Sales & Administrative Support 29.0% • Service Occupations 22.6% • Precision, Production, Craft, & Repair7.8% • Operators, Fabricators, & Laborers 18.1% • Farming, Forestry, and Fishing 0.8% • TOTAL 100.00%

  12. Occupational Distribution Change • 1. In 1900, fifty-eight (58) per cent of the African-American labor force was engaged in agricultural pursuits. Twenty-four per cent were in Domestic and Personal Service. Those two low paying occupations accounted for 82% of the African American workforce in 1900. • In 1900, 1.18% of the African-American workforce was in Professional Occupations. • By 2000, very little (.8%) of the African-American workforce is in farming while 50% were in Managerial & Professional and Technical Sales and Administrative Support.

  13. Income-Saving-Wealth Connection • The Matel Dawson, Jr. Story • www.nytimes.com/.../matel-dawson-jr-81-is-dead-philanthropic-auto-worker.html?...

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