Monday, July 11, 2011

Black middle class falling back into poverty

I saw this in my local paper.  It covers a fair amount of ground, and I am being selective as to which points to cover.  My quote is from the online Washington Post because, although I am not bringing up the issues here, they choose not to truncate certain portions of the story.

It is discussing the problems of black America, and how the current recession has hammered them, and notes some of  the particular issues that they face.  At times it is a little unfocused, and  some of their points are questionable – for instance the high home ownership of white Americans is a valid indicator of past relative success, but may be burden going forward. 

What I would like to see is how well black Americans do on a cohort by cohort basis.  Because they have not been in certain parts of the work force very long, and because of the general racism and suspicion that they often encounter in the job market, it would not stun me to see that do not do all that well.

However, I suspect that the bulk of their problems are simply demographics.   The education levels, the managerial levels, and the types of professions that they gravitate toward are all taking huge hits.  In our winner-take-all society, the lower end of the middle class is taking the hits.  To the extent working class black Americans, because of their previous exclusion,  probably bought more heavily into the consumerism and borrowing spree that was going full force within the United States in the 1990s, means that they also are more vulnerable to the deleveraging going on now.

Illness and an unexpected period of long unemployment are going to do in a majority of people.  But the new middle class, being presumably weighted toward the lower end of resources is going to be just that more vulnerable, and any additional cultural/racial issues are certainly not going to help.

Jesse Washington, The Associated Press, 10 July 2011 via the Washington Post

Millions of Americans endured similar financial calamities in the recession. But for Goldring and many others in the black community, where unemployment has risen since the end of the recession, job loss has knocked them out of the middle class and back into poverty. Some even see a historic reversal of hard-won economic gains that took black people decades to achieve....

Economists say the Great Recession lasted from 2007 to 2009. In 2004, the median net worth of white households was $134,280, compared with $13,450 for black households, according to an analysis of Federal Reserve data by the Economic Policy Institute. By 2009, the median net worth for white households had fallen 24 percent to $97,860; the median black net worth had fallen 83 percent to $2,170, according to the EPI.

This May, black male employment fell to the lowest level since the government began keeping track in 1972. Only 56.1 percent of black men over age 20 were working, compared with 68.3 percent of white men.

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