The Destruction of the Black Middle Class

[Cordell Carter]

The Destruction of the Black Middle Class
August 4, 2009 · from Black Politics on the Web
http://blackpoliticsontheweb.com/2009/08/04/the-destruction-of-the-black-middle-class/

Barbara Ehrenreich and Dedrick Muhammed

- To judge from most of the commentary on the Gates-Crowley affair,
you would think that a “black elite” has gotten dangerously out of
hand. First Gates (Cambridge, Yale, Harvard) showed insufficient
deference to Crowley, then Obama (Occidental, Harvard) piled on to
accuse the police of having acted “stupidly.” Was this “the end of
white America” which the Atlantic had warned of in its January/
February cover story? Or had the injuries of class - working class in
Crowley’s case - finally trumped the grievances of race?

Left out of the ensuing 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. Gates and Obama, along
with Oprah and Cosby, will no doubt remain in place, but millions of
the black equivalents of Officer Crowley - from factory workers to
bank tellers and white collar managers - are sliding down toward
destitution.

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.

But one thing is certain: 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 one 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 percent 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
percent between 1960 to 2006, while the share of white children living
in single parent homes increased by a staggering 229 percent.

Just last month on NPR, commentator Juan Williams dismissed the NAACP
by saying that more up-to-date and relevant groups focus on “people
who have taken advantage of integration and opportunities for
education, employment, versus those who seem caught in generational
cycles of poverty,” which he went on to characterize by drug use and
crime. The fact that there is an ongoing recession disproportionately
affecting the African American middle class - and brought on by Wall
Street greed rather than “ghetto” values - seems to have eluded him.

We don’t need any more moralizing or glib analyses of class and race
that could have just as well been made in the 70s. The recession is
changing everything. It’s redrawing the class contours of America in
ways that will leave us more polarized than ever, and, yes, profoundly
hurting the erstwhile white middle and working classes. But the
depression being experienced by people of color threatens to do
something on an entirely different scale, and that is to eliminate the
black middle class.

Barbara Ehrenreich is the president of United Professionals and
author, most recently, of “This Land Is Their Land: Reports From a
Divided Nation.”

Dedrick Muhammad is a Senior Organizer and Research Associate of the
Institute for Policy Studies.