This is Part Two of the 3-part series on “The Disappearing American Middle Class.”
On July 10, 2011, using an AP story, the Chicago Sun Times‘ Jesse Washington reports the bleak news that the continuing recession “has knocked” many in the Black community “out of the middle class and back into poverty,” and that “some experts warn of a historic reversal of hard-won economic gains that took black people decades to achieve.” Maya Wiley, director of the Center for Social Inclusion, predicted that “History is going to say the black middle class was decimated” over the past few years.
There is no specific definition for “‘Middle Class” according to the U.S. Census Bureau or the Bureau of Labor Statistics. However, a reasonable definition would be “median income” — that income that divides a society’s income distribution into two equal groups, half with incomes above the median and half with incomes below the median.
According to “The African American Middle Class,” BlackDemographics.com, in 2009, the median household income for all US households was $49,777. Some 43% of U.S. households could be considered middle class, with an annual income of $35,000 to $100,000. As a group, American Blacks tend to be poorer, which accounts for why the median Black household income in 2009 was $32,584.
Since the Civil Rights Movement in the 1960s, America’s black middle class had grown tremendously. African Americans have moved into more white collar jobs and are more educated than ever before. No longer isolated and identified by skin tone they integrated into white middle class neighborhoods and developed their own black middle class neighborhoods. By the 1990s middle class Black America was well established as a separate community and was no longer forced to live with lower income Blacks.
But those gains are now at risk of being reversed. Here are the indicators and reasons for the disappearing Black middle class [Source: Chicago Sun Times]. The diminishing Black middle class, in turn, carries troubling implications for American democracy.
The Recession Has Hit Blacks Harder
- From 2007 to 2009, the overall unemployment rate has fallen from 9.4% to 9.1%, but the black unemployment rate has risen from 14.7% to 16.2%. The latest numbers (July 8, 2011) from the Bureau of Labor Statistics have the national unemployment rate at 9.2%, with Blacks having the highest jobless rate (16.2%), followed by Hispanics (11.6%), Whites (8.1%), and Asians (6.8%).
- Even college-educated Blacks fared worse than their white counterparts in the recession. In 2009, unemployment for college-educated Whites was 3.9%; for college-educated Blacks it was 7%.
- Nearly 8% of Blacks who bought homes from 2005 to 2008 have lost them to foreclosure, compared with 4.5% of Whites, according to an estimate by the Center for Responsible Lending.
The Racial Gap in Net worth
But the racial gap goes beyond household income, employment, and home foreclosures. In part because of black Americans’ broken family structure and absent fathers, Blacks have a lower net worth, which means that they spend instead of save what they make. Their lower net worth, in turn, means Blacks are poorer as a group.
An analysis of Federal Reserve data by the Economic Policy Institute shows that the net worth of Blacks is falling at a greater rate than that of Whites. In 2004, the median net worth of White households was $134,280, compared with $13,450 for Black households. By 2009, the median net worth for White households had fallen 24% to $97,860; the median net worth for Black households had fallen 83% to $2,170. Translated, this means that in 2009, for every dollar of wealth the average white household had, black households only had two cents.
The outlook for the future may be even bleaker.
Algernon Austin, director of the Economic Policy Institute’s Program on Race, Ethnicity and the Economy, thinks more Blacks than ever before could fall out of the middle class because Blacks are overrepresented in state and local government jobs. Those are jobs that are being eliminated because of massive budget shortfalls.
Some see a bitter irony in soaring black unemployment and the decline of the black middle class on the watch of the first black president. “I thought Barack Obama could have provided some way out. But he lacks backbone,” Princeton Professor Cornel West told truthdig.com recently. West said Obama sold out the poor to become “a black mascot of Wall Street oligarchs and a black puppet of corporate plutocrats. . . . I don’t think in good conscience I could tell anybody to vote for Obama.”