UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

August 5, 2009

THE DESTRUCTION OF THE BLACK MIDDLE CLASS

Dedrick Muhammad & Barbard Ehrenereich, Institute for Policy Studies - Left out of the tangle of commentary on race and class has been the increasing impoverishment-or, we should say, re-impoverishment--of African Americans as a group. In fact, the most salient and lasting effect of the current recession may turn out to be the decimation of the black middle class. According to a study by Demos and the Institute for Assets and Social Policy, 33 percent of the black middle class was already in danger of falling out of the middle class at the start of the recession. . .

For African Americans - and to a large extent, Latinos - the recession is over. It occurred between 2000 and 2007, as black employment decreased by 2.4 percent and incomes declined by 2.9 percent. During the seven-year long black recession, one third of black children lived in poverty and black unemployment-even among college graduates-- consistently ran at about twice the level of white unemployment. That was the black recession. What's happening now is a depression.

Black unemployment is now at 14.7 percent, compared to 8.7 for whites. In New York City, black unemployment has been rising four times as fast as that of whites. Lawrence Mishel, president of the Economic Policy Institute, estimates that 40 percent of African Americans will have experienced unemployment or underemployment by 2010, and this will increase child poverty from one-third of African-American children to slightly over half. No one can entirely explain the extraordinary rate of job loss among African Americans, though factors may include the relative concentration of blacks in the hard-hit retail and manufacturing sectors, as well as the lesser seniority of blacks in better-paying, white collar, positions.

The longstanding racial "wealth gap" makes African Americans particularly vulnerable to poverty when job loss strikes. In 1998, the net worth of white households, on average, was $100,700 higher than that of African Americans. By 2007, this gap had increased to $142,600. The Survey of Consumer Finances, which is supported by the Federal Reserve Board, collects this data every three years - and every time it has been collected, the racial wealth gap has widened. To put it another way: In 2004, for every dollar of wealth held by the typical white family, the African-American family had only 12 cents. In 2007, it had exactly a dime. So when an African American breadwinner loses a job, there are usually no savings to fall back on, no well-heeled parents to hit up, no retirement accounts to raid.

All this comes on top of the highly racially skewed subprime mortgage calamity. After decades of being denied mortgages on racial grounds, African Americans made a tempting market for bubble-crazed lenders like Countrywide, with the result that high income blacks were almost twice as likely as low income white to receive high interest subprime loans. According to the Center for Responsible Lending, Latinos will end up losing between $75 billion and $98 billion in home-value wealth from subprime loans, while blacks will lose between $71 billion and $92 billion. United for a Fair Economy has called this family net-worth catastrophe the "greatest loss of wealth for people of color in modern U.S. history."

Yet in the depths of this African-American depression, some commentators, black as well as white, are still obsessing about the supposed cultural deficiencies of the black community. In a December op-ed in the Washington Post, Kay Hymowitz blamed black economic woes on the fact that 70% of black children are born to single mothers, not noticing that the white two-parent family has actually declined at a faster rate than the black two-parent family. The share of black children living in a single parent home increased by 155% between 1960 and 2006, while the share of white children living in single parent homes increased by a staggering 229%.

2 Comments:

Blogger m said...

The destruction of the black middle class.
The destruction of the white middle class.
The destruction of the black lower class.
The destruction of the white lower class.

Separating these issues out on the basis of race provides for the old divide and conquer routine. One group gets to feel smug, and develops an irrational belief that its only happening to the other guy, and that they are safe and favored.

All of those of us who are not a part of the upper classes are getting screwed, and we need to stick together.

August 5, 2009 6:02 PM  
Anonymous Mairead said...

Sing it LOUD, brother! (or, as it might be, sister)

August 5, 2009 6:44 PM  

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