Whitman School of Management at Syracuse University
Abstracts > Abstract Details JDE

Abstract Details

Reply to Raheim
Vol. Volume 1, Number 1 June/1996

Timothy Bates
Professor Raheim states in at least a dozen different variations the notion that "Bates characterizes low-income African Americans . . . as having immutable human capital defects." One problem with this is that I do not subscribe to the "Bates view of low-income people as being deficient in human capital." Perhaps I should thank Professor Raheim for permitting me to clarify any remote evidence of ambiguity on this point that may appear in my article. Many low-income individuals are prime candidates for successful pursuit of self-employment. "Low income" is not the trait to focus upon, unless low income blocks access to financial capital. If low income impedes efforts to finance one's business startup, then low income, by itself, can profoundly undermine viability in many lines of small business. The proper focus is upon the human-capital characteristics listed in the second sentence of my article, "the founder's education, training, work experience and specific skills." One's income is often correlated to such human-capital traits; in important cases of strong human capital coexisting with low personal income, self-employment is a pragmatic option to consider if adequate financing can be arranged. (Paragraph one from Bates' Reply.)