Nationwide protests following the death of George Floyd have thrown issues of economic inequality, already exasperated by the coronavirus crisis, into sharp relief. The wealth gap in America has been growing since at least the 1970s as income levels stagnated for lower and middle class households while continuing to grow for households at the top of the spectrum.&nbsp;



Centuries of racism and discrimination mean that this divide is a great deal wider for black households that are denied the access to the opportunities and resources available to white households. “No progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years,”&nbsp;<a href="https://www.minneapolisfed.org/research/institute-working-papers/income-and-wealth-inequality-in-america-1949-2016" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to economists Moritz Kuhn, Moritz Schularick and Ulrike I. Steins who published a 2018 paper on U.S. incomes and wealth since 1949. The Brookings Institution&nbsp;<a href="https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/" target="_blank" rel="noreferrer noopener">points out</a>&nbsp;that the ratio of white family wealth to black family wealth is higher today that it was at the beginning of the century.&nbsp;



Here are 9 numbers that sum up the vast gap.



<h3 class="wp-block-heading">16.8%</h3>



That’s the May 2020 jobless rate for black workers. During the same month, white workers were unemployed at a rate of 12.4%.&nbsp;<a href="https://www.nytimes.com/2020/06/01/business/economy/black-workers-inequality-economic-risks.html" target="_blank" rel="noreferrer noopener">Less than half of black adults</a>&nbsp;currently have a job, compared with just under 60% prior to the beginning of the pandemic layoffs in February. The sobering statistic comes after unemployment rates for black workers reached a record low in the months before the pandemic.



<h3 class="wp-block-heading">$17,150</h3>



That was the median net worth of black households in 2016, according to the Federal Reserve’s Survey of Consumer Finances, the <a rel="noreferrer noopener" href="https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/" target="_blank">Brookings Institution</a> notes. The median net worth of a white family at the same time was $171,000—nearly ten times as much.



<h3 class="wp-block-heading">8.7%</h3>



The Washington Post <a rel="noreferrer noopener" href="https://www.washingtonpost.com/business/2020/06/04/economic-divide-black-households/" target="_blank">points out</a> that in 1968, the median black household had just 9.4% of the wealth of the median white household, according to Fed data. Yet by 2016, that ratio had fallen to just 8.7%. In other words, the wealth divide actually widened a bit over nearly a half century of what is commonly thought of as progress for African-Americans. 



<h3 class="wp-block-heading">44.3%</h3>



That’s how much the median net worth of black families fell between 2007 and 2013, reflecting lingering damage from the Great Recession. White families experienced a smaller, though still substantial, drop in median net worth of 26%.&nbsp;



<h3 class="wp-block-heading">40%</h3>



That’s how much less likely black families are to&nbsp;<a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" target="_blank" rel="noreferrer noopener">own their homes</a>&nbsp;than white families, according to the Census Bureau.&nbsp;



<h3 class="wp-block-heading">28%</h3>



That’s the portion of black homeowners who didn’t pay or deferred their mortgage payment in May, during the depths of the covid-19 crisis, compared with just 9% for white homeowners, according to the Urban Institute’s&nbsp;<a href="https://www.urban.org/urban-wire/new-data-suggest-covid-19-widening-housing-disparities-race-and-income" target="_blank" rel="noreferrer noopener">analysis</a>&nbsp;of the Census Bureau’s Household Pulse Survey .&nbsp;



<h3 class="wp-block-heading">36%</h3>



That’s the percentage of black respondents who said they had money in the stock market, according to a&nbsp;<a href="https://news.gallup.com/poll/211052/stock-ownership-down-among-older-higher-income.aspx" target="_blank" rel="noreferrer noopener">2017 Gallup poll</a>. The rate was 60% for white respondents. Investing in the stock market is one of many ways families compound their wealth.&nbsp;



<h3 class="wp-block-heading">46%</h3>



According to a&nbsp;<a href="https://crr.bc.edu/working-papers/measuring-racial-ethnic-retirement-wealth-inequality/" target="_blank" rel="noreferrer noopener">study</a>&nbsp;from Boston College’s Center for Retirement research, the typical black household had just 46% of the retirement wealth of a typical white household in 2016. The study notes that the gap would be much larger if it weren’t for the value of Social Security benefits households have earned and are expected to receive.



<h3 class="wp-block-heading">2 out of 5</h3>



That’s the share of black small businesses that were forced to close down in April because of the pandemic, <a rel="noreferrer noopener" href="https://siepr.stanford.edu/sites/default/files/publications/20-022.pdf" target="_blank">according to</a> University of California, Santa Cruz economist Robert Fairlie. Among white businesses, just 1 out of 5 was forced to close.



&#8211;<a href="https://www.forbes.com/sites/sarahhansen/">Sarah Hansen</a>, Forbes Staff, <a href="https://www.forbes.com/markets">Markets</a>

Miniature people standing on a pile of coins. A concept of income disparity.

Here’s What The Racial Wealth Gap In America Looks Like Today

It’s hard to determine Sol Kerzner’s net worth due to his complex web of properties, consultancy fees, dividend income, tax havens, and public and private interests. What’s clear is that he’s sitting pretty in retirement.
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His is a story with humble beginnings.
Born in August 1935, in Troyeville, a rough part of Johannesburg, Kerzner was the youngest of four children. A couple of years later, the close family moved to the nearby Bezuidenhout Valley. While in Johannesburg, Kerzner’s parents, who were Lithuanian immigrants, ran a café and he gives credit to his eldest sister for raising him since his parents were busy seven days a week.
Kerzner was not the best student, more of a boxer, preferring sport to books; he is surprised he made it through school without a problem. His father sent him to Damelin College for his last two years of schooling, where there was no sport to distract him.
He went to the University of the Witwatersrand to study accounting, not knowing what else to do. After graduating, he moved to Durban to do his articles at a top firm. His parents had taken up a lease for a 50-room residential hotel in the coastal city. Kerzner convinced his dad to buy another, down the road, that had a liquor license. He would work there at night, while keeping his day job as an accountant. This gave him his first taste of the industry in which he was to make his fortune.
At night, they would change the light bulbs – and the mood – in the dining room, playing some music to create a spot where the revellers and sailors could unwind. It’s a place Kerzner says was far from five-star but definitely interesting.
In 1962, things were going well for Kerzner. He was a junior partner at an auditing firm and was offered a chief financial officer job at a big industrial company. Instead he bought the lease of the Astra Hotel in the backstreets of Durban.
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“I can’t tell you exactly why, I just got the urge to give up the profession [accountancy] and actually get involved in the hotel [business].”
While he was saying his goodbyes, one of his clients, Herald Franckle, asked why he was doing this when his career in auditing was going so well.
“I’m going to build South Africa’s first great hotel,” Kerzner said.
Kerzner had been receiving brochures from holiday destinations like Miami and Hawaii, and looking around Durban he realized South Africa wasn’t in the same league.
“I’ve always had confidence that South Africa should be able to do as well as any other country.”
The Astra Hotel was just a test run to get a feel of things, complete with dinner club and cabaret to draw in a crowd. He ultimately wanted to build in Umhlanga, a few kilometres north of Durban, because he used to take his girlfriends there and thought it was a ‘nice spot’. Trying to get his vision across, and prove he wasn’t crazy, Kerzner drove Franckle to the spot he had in mind and hooked himself an investor.
At the end of 1963, the designs for his big project in Umhlanga were complete and the bulldozers were on site. But Kerzner had never been abroad, so in November he flew to Miami, via New York. After checking in at the hotel, Kerzner asked a cab driver to show him every hotel in Miami Beach. The trip lasted from midday to 2AM the next morning. By lunchtime the following day, he was back on a flight to New York and recalls hearing about John F. Kennedy’s assassination while he was in the elevator. When Americans were weeping, he spent the night in New York looking at hotel lobbies
and restaurants.
He was convinced his designs were as good as what he had seen in the United States. Kerzner recalls articles in the Sunday Times calling him crazy and over capitalized. He was in his twenties and little worried him. His bet paid off and turned out to be exactly what South Africans were waiting for.
In 1964, the 88-room Beverly Hills Hotel, boasting uninterrupted views of the Indian Ocean, became South Africa’s first five-star hotel, with a R1 million price tag at the time.
The Elangeni Hotel in Durban was bigger and attracted a lot more financing since Kerzner now had some credibility. While he was building it, South African Breweries approached him and together they founded one of South Africa’s largest hotel groups, Southern Sun, now Tsogo Sun. Kerzner later founded Sun International.
A casino license was to prove a spur. A concession was up for grabs in Bophuthatswana, an independent homeland of the apartheid regime. Kerzner and his team won the concession with a warning to deliver.
This became Sun City, a renowned resort around 150 kilometers north west of Johannesburg. The four hotels, two Gary Player-designed golf courses, manmade lake, artificial rainforest and entertainment center took about 10 years to complete. When the resort first opened in 1979, the place was so overwhelmed the doors had to be locked. The estimates of 2,000 day visitors were way off with almost 15,000 turning up that first weekend. Kerzner laughs about how he had to come out with a megaphone to turn people away. The 6,000-seater Entertainment Centre opened with Frank Sinatra in 1981, in breach of the cultural boycott imposed on the country.
“He [Sinatra] walked in, he got on stage and he started singing with the orchestra and he stopped after a few bars and said ‘Sol, I’ve played all over the world… I’ve never played in a room with the sound as what you’ve created here, this is the best room I’ve ever worked in.’”
Kerzner sold his stake in Southern Sun in 1983 and a deal to sell out of Sun International was finalized in 1992. He left South Africa for London in 1987 to break into the international market as he felt he had reached the ceiling at home. It was tough because of the negative feeling towards South Africa at the time. Sentiment changed after Nelson Mandela’s release from prison in 1990.
Two months after his release, Mandela’s office called Kerzner to discuss a meeting. It took place at Kerzner’s Johannesburg home and was about his relationship with the then president of Bophuthatswana, Kgosi Lucas Manyane Mangope, and Zulu chief, Mangosuthu Buthelezi. Mandela wanted to create a united South Africa and wanted Kerzner’s help.
When Kerzner asked Mandela about his thoughts about the controversies surrounding Sun City, the then future statesman said he thought it was great that a young man was creating thousands of jobs out in the countryside.
The business was not easy. Kerzner had to face bribery allegations. In the late 80s there was a long investigation into an alleged R2 million bribe to Transkei‘s prime minister, George Matanzima, for exclusive gambling rights.
Kerzner soldiered on to build award-winning international ventures that include Atlantis Paradise Island in the Bahamas, the One &amp; Only Resorts and The Palm in Dubai.
The Bahamas adventure began when Kerzner was approached by an investment bank to see if he was interested in American entertainer Merv Griffin’s bankrupt Paradise Island resort. He bought it in 1994 and launched into a major redevelopment and expansion program – demolishing the entire front and creating a nearly 60-hectare aquarium that allows you to walk under the sea. The resort ran throughout the construction with cheaper rates, scaffolding and all.
Paradise Island became Atlantis when the Governor General’s wife came over for tea one afternoon, heard the plans and said it sounded a lot like the lost city of Atlantis.
The response was great and occupancy high. Michael Jackson wanted to see it for himself. His tour of the water habitat ended in a mob of tourists taking pictures and getting autographs, none of which fazed Jackson or his bodyguard.
In 2002, the One &amp; Only Resorts were launched in tourist destinations. In 2009, the $128-million, six-star and seven-story One &amp; Only in Cape Town’s V&amp;A Waterfront opened six months ahead of schedule.
Located on Dubai’s manmade Palm Jumeirah is The Atlantis Palm Dubai, a $1.5–billion and 1,539-room joint venture between Kerzner International Holdings Limited (KIHL) and Istithmar World, a private equity and venture capital arm of Dubai World Corporation. Home to a seven-hectare waterpark and 65,000 marine animals, it survived a fire in its lobby before its $20-million opening. Being the biggest opening the company has ever had, a lot of the money was committed before the global financial crash, so the show went on. It featured impromptu performances from friends like Stevie Wonder, Michael Jackson and Natalie Cole, as well as fireworks by the same company that lit up the Beijing Olympics.
Istithmar bought out Kerzner’s 50% stake in the resort in 2012 and sold it last year to the Investment Corporation of Dubai (ICD), the emirate’s sovereign wealth fund.
Kerzner historically had no capital and relied on financing and strategy, and as a result his ventures had always been financed conservatively. This policy changed in 2006. His son Howard ‘Butch’ was chief executive officer and told him it was a great time to go private. The markets were great and everyone was doing it. The company was taken private in a reported $4 billion buyout; a $2.6 billion mortgage to finance this came at a most inopportune time.
The global recession led to a decline in leisure travel. The situation in the Bahamas was bad. The group also had to face the threat of competition from Baha Mar, which had found a new financial backer and builder in the Export-Import Bank of China and the China State Construction Engineering Corporation, and was being built less than 10 miles away from Atlantis Paradise Island. Brookfield Asset Management held a small piece of the Kerzner loan, $175 million, and went into debt restructuring talks – converting the debt into equity. Brookfield took ownership of the Atlantis and One &amp; Only Ocean Club in the Bahamas, as well as a 50% stake in the One &amp; Only Palmilla, in Mexico, but KIHL held on to long-term management contracts for
the properties.
In 2006, when Butch died in a helicopter crash in the Dominican Republic, Kerzner took two weeks off to figure out if he would take the helm again. This was in the midst of building phase three of Atlantis. It was work that eventually helped him through that difficult time. It was then that he knew it would never be a family business.
“He was one of the few sons who was able to stand up in terms of talent to a great father, and you don’t see that much in my business,” Donald Trump once told the Los Angeles Times about Butch.
The ICD purchased a significant, yet unspecified, stake in KIHL for an undisclosed amount; Kerzner stepped down as chairman and was replaced by Mohammed Al Shaibani.
There is no question in Kerzner’s mind that there are still some investment opportunities in Africa’s hospitality industry. He believes that Africa has opened up and is a whole new ball game.
Although Kerzner has retired, he’s not ready to sit around and do nothing. He is involved in a joint €790-million bid for Club Med with Andrea Bonomi, a former chairman of Banca Popolare di Milano.
During his career, Kerzner planned to open hotels in Zimbabwe and built Chobe Game Lodge in Botswana. He recalls taking in Elizabeth Taylor and Richard Burton for what was to be a two-day visit. When Kerzner got back to his friends two weeks later he found out that not only had they not left, but had decided to get married on the banks of the Chobe.
A 50-year career has its fair share of mistakes.
“In business, if you’re going to be successful and do things that are a little out of the ordinary, invariably you’re going to make mistakes.”
He just tries to avoid the very big ones and has had too much fun to do much differently. One missed opportunity was turning down an offer to be the first person to get involved in a gambling operation in Macau. Another big mistake was going private.
“It’s not only all about how much money you would have made and what you would have got. It’s about having a little bit of fun, being able to create things.”
The part of the business that excited Kerzner most was creating it all and watching it come to life. He feels that his intricate involvement in the design process is part of the reason he has succeeded.
When you are this enthused by what you do, it’s hard to balance work and family. Kerzner has been married and divorced four times, has four children and 10 grandchildren. He feels blessed to have the family and friends he has and admits that he perhaps got a little too carried away with his work.
After a quashed unauthorized biography, we can only hope for a sanctioned one giving greater insight into this private yet well-known personality.

Tag: Income

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