The number of African Americans males who graduate each year hasdecreased leading to public concern. African American individuals whoare college graduates make up 19% of the group. In America,completion of a college education is highly valued and determines thequality of the learning institution. African American students whoenroll for college education make 39% of the country’s students (Xu& Zia, 2012). Research should be established to define theassociation between monetary literacy and the number of AfricanAmericans who graduate each year. Individuals with high debts areunable to experience increased graduation rates, an aspect thataffects the African American male students. The paper discusses howfinancial literacy relates to job turnover rates.
Financial literacy is an aspect that includes the knowledge,ability, and skills that help individuals to make informed,effective, and efficient decisions with their financial assets.Financial literacy is beneficial because it enables people to manageand utilize their investment and wealth in a better way (Lusardi,2012). The amount of income and financial literacy of an individualinfluence his or her financial stability. The issue of financialliteracy affects African Americans. Job turnover rates are associatedwith the level of education of the African American males. Forinstance, the accomplishment of a college degree gives an AfricanAmerican male student basic financial knowledge, which leads toincreased job turnover. According to Roberts (2013), a high number ofmale individuals that make up the African America population have lowor no education. As a result, the financial literacy associated withthe group is limited, and job turnover is highly affected. However,job turnover rates may exist, but there is the lack of adequatestudies accomplished that establish a connection between thefinancial literacy, and the identified turnover (Hale, 2013). A focusis made on African-American males in the United States that seeks toinvestigate their graduation rates. Provision of education to thepopulation is hindered by financial constraints.
The financial literacy in the American society is currently limitedand at minimal levels. Many individuals especially the AfricanAmericans face challenges when solving issues involving numeracy andthe working of financial assets or debt products. Surveys conductedbetween 2004 and 2006 showed that few students understood bonds,stocks, and other investments (Tatum & Muhammad, 2012). TheUnited States encounters issues associated with financial literacy,which also afflicts other countries. Financial literacy is highlyneeded among the African Americans because its status in thepopulation is alarming. Most of the African Americans do not have therequired money management skills and knowledge. As a result, AfricanAmerican males are associated with lower savings, higher debts, lowhomeownership level, increased cases of home foreclosure, andpredatory lending practices. Moreover, 55% of the American Africansdo not own a bank account because they lack the financial knowledgethat would enable them to accumulate wealth (Roberts, 2013). Theindividuals rely on social security for income. The wealthdisparities experienced in the American society can be eliminatedusing financial literacy. The presence of various individuals fromdifferent social-economic backgrounds in the society should nothinder acquisition of financial knowledge.
Job Turnover Rates
AJob turnover rate indicates the number of people who have a job orhave managed to secure themselves employment. A high number ofAfrican Americans males do not have a temporary or permanent job. Thejob turnover rate among the population is therefore, low. Data showsthat unemployment among the African-Americans was approximately 9.5%in 2015 compared to about 4.5% for the whites (Postmus, Plummer,McMahon, & Zurlo, 2013). A gap, in relation to wealthaccumulation, has widened that is influenced by differences infinancial literacy levels. Low level of education among the blacks issaid to contribute greatly to the unemployment disparity. AfricanAmericans who lack any educational knowledge are not able to acquireany job in the American society. Furthermore, despite acquiring acollege education, many African Americans are not able to secureemployment or take long to acquire a job. Studies claim that thereexist a connection between employment of individuals and thefinancial knowledge in the American society (Lusardi & Mitchell,2014). Many African American males are not able to perform andunderstand financial issues that are encountered by differentorganizations.
Jobemployment depends on the level of education and most organizationslook for individuals who can competently help them to solve financialchallenges. Although most blacks may be employed, some lack financialmanagement knowledge (Lusardi, 2012). As a result, most AfricanAmerican males are likely to face wealth accumulation issues.Financial literacy is important because it enables people to investand save money without problems. African American males have low orno financial knowledge and are unable to perform financialtransactions smoothly. High education level increases the chances ofindividuals to acquire employment. Moreover, educated people areassociated with high financial literacy, which boost their ability tomanage their finances and investments. Tatum and Muhammad (2012),claim that African American males who manage to acquire a collegedegree can accumulate wealth and invest in various sectorssuccessfully. A connection is therefore, established between the jobturnover and financial knowledge of African Americans.
FinancialKnowledge and Behavior of African-Americans
Financialknowledge enables individuals to avoid monetary mistakes that maycost their businesses or investment. African Americans are said tohave little or no financial knowledge. According to Xu and Zia(2012), the behavior of African American differs from that for thewhites because they lack enough financial education. Financialeducation programs are needed to promote the spread of financialexperience and knowledge among the American population. Theinvestment and saving behavior of African Americans has influenced apublic concern in America. In most cases, low educated individualsmay not have high-return asset investments because they lackmanagement skills. Most African Americans do not save their earningand hence have accumulated low or no wealth. Moreover, employedAmerican Africans retire before they invest or accumulate largeamounts of wealth. Many factors explain the wealth accumulation andinvestment behavior of different individuals in the American society.The level of education of the African Americans contributes to theirpoor investment and saving behaviors (Hibbert, Lawrence, &Prakash, 2013). A difference in preferences such as risk-aversion iswitnessed among the Americans. For instance, the whites are said tobe high-risk takers compared to the African Americans.
Highlearning and information costs hinder the efforts of most Americansto have a comfortable retirement and accumulate wealth. AfricanAmericans may not be able to afford the education services andacquire the financial knowledge needed to establish and manageinvestments. Education is associated with diverse benefits, whichcannot be understated. A connection between wealth accumulation andeducation has been established, which influences the saving andinvestment behavior of individuals (Postmus, Plummer, McMahon, &Zurlo, 2013). Most African American without financial knowledge maynot own a saving or checking bank account. Acquisition of loans bysuch individuals is difficult because there is no relationshipbetween them and banks. As a result, most African Americans lack thecapital needed to establish businesses because they may not qualifyfor any loan application.
Unequaldistribution of wealth in the American society explains thecorrelation between behavior and financial knowledge. AfricanAmericans are associated with low wealth because they attain loweducation levels. For instance, high school individuals may have nowealth. Lack of financial knowledge hinders the ability of uneducatedindividuals to establish businesses and make profits. High educationgroups can start and manage complex or large investments because theycan comfortably solve the possible problems. However, AfricanAmerican with the same level of education as the whites may holdlittle wealth. The wealth holdings disparity is influenced by lack ofsaving skills and knowledge among the African American population(Mezuk, 2014). Financial practices are also transmitted in adiscriminative way or based on racial lines. For instance, financialmarket integration is achieved through having a checking account,which is not common among the African Americans. The limitedfinancial knowledge influences lack of involvement in the financialmarket.
Theactions of most African Americans prevent them from gainingexperience concerning financial issues. Financial literacy isimportant because it enhances the saving abilities of individuals.Individuals who have limited financial literacy encounter problemswhen investing or saving their incomes. A poor financial behavior istherefore, witnessed since challenges hinder the abilities of thepeople to manage and utilize their savings (Lusardi & Mitchell,2014). The behavior associated with the African Americans isconnected to their financial knowledge. Wealth accumulation andsaving practices are effective if individuals possess the relevantfinancial literacy.
Ethnic Finance Knowledge
The provision of finance knowledge in the American society ishindered by ethnic differences. Access to financial services is achallenge to most individuals because exclusion is witnessed. Povertyand unequal wealth distribution are influenced by the presence ofethnic financial knowledge. Ethnicity includes the level ofeducation, income, net worth, and age. Most ethnic minorities such asAfrican Americans are excluded from accessing financial services. Forinstance, an individual would be denied access to loan if he or shefails to meet the relevant economic requirements. The white andeducated individuals overwhelm the financial advice industry inAmerica. Data show that 79% of the American financial advisers arewhite and 20% are individuals from the minority communities (Marable,2015). Diversity is not witnessed when providing financial advice,but ethnicity is intensified. Distribution of financial literacy ishindered by the lack of diversity during the delivery of financialservices.
Ethnic financial knowledge benefits a small portion of the Americanpopulation. The poor, uneducated, and minority in the society may notafford or access the services geared to the spread financialknowledge. Discrimination based on the provision of ethnic financialknowledge can hinder the actions of individuals to access loans ormortgages. Ethnic businesses in American limit individuals’ accessto financial support and people may feel discouraged to seek forassistance. Individuals from ethnic minorities like African Americansfear being discriminated or treated unfairly by other groups.Predatory lending practices are subjected to African Americans, whichdisadvantage them. Mezuk (2014), argue that financial informationmust be equally distributed for even economic development and wealthaccumulation to be witnessed. Ethnicity that is experienced whenimplementing financial literacy, mostly affects the minority groups.Financial advisers need to promote diversity when performing theirtasks for effective elimination of ethnic barriers to informationacquisition.
Moneymanagement is a concept that challenges many individuals in America.The whites manage and use their money differently compared to theAfrican Americans. The rich individuals in the American society arelikely to invest or save their money in an attempt to accumulate morewealth (Hale, 2013). The diversity of earnings determines thebehavior of different individuals. Money management is influenced byfinancial information possessed by the individuals. Unequal provisionof financial information hinders the efforts of some people to managetheir money. Purchase and payment habits employed by individuals fromdifferent races determine their financial management skills andknowledge. For instance, rich people are likely to access loans anddo a down payment for very expensive items while poor individuals payusing installments (Marable, 2015). African Americans encounter moneymanagement challenges, which hinder their participation in theeconomic sector. Programs need to be developed to help all Americansto manage their money effectively for their benefit.
Inconclusion, there exist a relationship between job turnover and thefinancial knowledge possessed by individuals. Financial educationenables people to manage and use their money effectively resulting inaccumulation of wealth. Job turnovers are associated with financialliteracy because most employed people are educated. Education offersindividuals with finance management skills and knowledge thatinfluence their financial behaviors. African Americans lack moneymanagement skills and are unable to save or invest their financessuccessfully. Ethnic financial knowledge does not benefit mostAmericans. Programs need to be established to help in enhancingfinancial literacy among the Americans. As a result, equal wealthdistribution, and effective management of finances will be witnessedin the society.
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