African Americans : Middle Class  

Introduction:

African Americans or Black Americans form the second largest minority group in the United States today and are an important part of the economic, political and historical structure of modern America. They are citizens or residents of the United States who have origins in any of the black racial groups of Africa. Most African Americans are the descendants of captive Africans who were enslaved within the boundaries of the present United States, although some are descended from voluntary immigrants from Africa, the Caribbean, South America, or elsewhere.

Rise of African-American Middle Class:

The black middle class, as defined by education, occupation, and income, is primarily a post-1960s development. Prior to the 1960s, because of racial discrimination, segregation, and the fact that most blacks lived in the rural South, African Americans experienced a limited opportunity structure due to the harsh laws present at that time.

In 1960, only 20 percent of the black population finished high school, compared with 43 percent of the white population. African Americans had little access to higher education, except at historically black colleges, and were largely excluded from graduate and professional schools. Only 3 percent of African Americans graduated from college, less than half the white graduation rate of 8 percent.

The small numbers of black professionals were largely confined to serving the black population. They were primarily small businessmen, ministers, teachers, and undertakers-with a few doctors, lawyers and pharmacists. African Americans found minuscule white-collar opportunities in either the public or private sectors where their growth was limited.

Outside the black community, African Americans worked in unskilled industrial or service jobs. Black women, in particular, labored almost exclusively as domestic servants where their wages were not those of white citizens and were often treated as slaves with little or no job security.

Today, about 86 percent of African Americans from 25 to 29 years of age have graduated from high school, a rate comparable to that of whites. In 1980, 8 percent of African Americans were graduating from college, still less than half the white rate of 17 percent. Today, about a third of black high school graduates attend college and 13 percent graduate. Although the gap is narrowing, white students attend college at a higher rate (about 42 percent) than African Americans, and about 23 percent graduate.

As a result, African Americans hold a wide range of jobs. They have been particularly successful in securing middle-income employment in the public sector. African Americans are twice as likely as whites to work for city, state, or federal government. Many of them have gone on to become millionaires in the stock market and in sports where names such as Tiger Woods, Muhammed Ali, Michael Jordan are amongst the most prominent ones who rose to international stardom.

The poverty rate among African Americans decreased by 3.2% to 26.1% in the '90s. During the same period the poverty rate among whites declined less than 1% to 10.5%. Internet and print media use among African Americans exploded in recent years. An estimated 7.5 million blacks use the Internet, with about half getting online for the first time in 2000, according to a study by The Pew Research Center, Washington [03].

Power and Position in American Economy:

Although the public sector has provided African Americans with generally stable middle-income positions, it does not pay as much as the private sector. African Americans in the private sector are as likely as whites to be in technical, sales, and clerical positions but less likely to hold executive, administrative, and managerial positions.

Black median household income in 1997 was $25,050. That income level placed about 40 percent of black households in the middle class, compared with about 60 percent of white households. This proportion had almost doubled since 1960. The black middle class grew at a faster rate than the white middle class in that period, increasing from about 40 to 60 percent [01].

This rise has come due to the social integration and the strength amongst the labor unions where African Americans hold monopoly such as plant and industrial workers, security services, technical support and in the law firms. Those that support their community in the sports sectors have also risen by being player agents, trainers or opening their own training centers and gymnasiums where they tend to service their community.

Middle-income status for African Americans, however, requires that black women contribute more to household income than white women do. Although middle-income status today demands more two paycheck households, black wives are one and a half times more likely than white wives to work full time.

The black middle class, unfortunately, is based more on income than on assets. Black married couples have about 80 percent of the income of white married couples but only one-quarter the net worth. The net worth of college-educated whites is about $58,000 more than the net worth of college-educated African Americans. Given its net financial assets, a typical middle-class white family can sustain itself at its present standard of living for about four and one-third months if it loses its income stream, while the typical middle-class black family could not sustain itself for a month.

The median income of black men is about $9,000 less than that of white men, but the median income of black women is only about $1,500 less than that of white women. Because of differences in the opportunity structure for black men and women, more black than white families owe their middle-income status to the wife's occupational and income position than to the husband's. Today, a modern day African American girl can expect to earn around $1200 more as compared to a male boy of her same age. This is due to the fact that girls have become more mature and have better management skills as compared to their male counterparts. Subsequently, there has been a rise in the number of girls who go to high school but are also able to have job earnings of $2,000 to $4000 per month to supplement their family’s income.

Seventy-four percent of middle-class whites and about 62 percent of middle-class African Americans own their homes, but 63 percent of black assets are in home equity, compared to 43 percent of white assets. The median value of black home equity, however, is about $14,000 less than that of white home equity. Black property is located primarily in urban areas and close-in suburbs. White property, generally in the outer suburbs, appreciates at a higher rate than black property. Houses of similar size, design, and appearance are appraised higher in white communities than in black or integrated neighborhoods.
Fewer middle-class African Americans than whites own homes because of continued discrimination in the housing and banking industry, despite laws against it. A Federal Reserve Bank study indicated that African-American and Hispanic applicants were denied mortgage loans two to three times more often than whites. Even with the same creditworthiness and neighborhood characteristics for a new home, black applicants were denied loans more often. The suburbs remain one of the last bastions of segregation in the United States [01].

Individual households in the largely African-American and Hispanic area of southwest Los Angeles may be barely middle class, but in aggregate they have enormous buying power, which the Wal-Mart helped prove. Since Wal-Mart opened in January 2003, the center has attracted 26 other new tenants, ranging from McDonalds to Bath & Body Works. Sales per square foot have jumped from $350 to over $500, says Quintin Primo III, CEO of Capri Capital Advisors [02].

Black consumers are the most brands loyal. About 64% will pay more for premium or brand-name products and 32% only buy established brands. Blacks reportedly make the most visits to grocery stores, averaging 2.2 trips each week [03]. This is where corporations are now targeting customers as African Americans tend to maintain brand loyalty be it generations of blacks are now to visit the same grocery and auto repair shops thus allowing businesses to maintain excellent customer relations and a flow of steady income.

Relocating families are adding to the demographic, and their experiences of feeling welcome serve to encourage others to consider Charlotte. It is those economic opportunities that have placed the area near the top of Black Enterprise magazine's rankings of the best places for African-Americans to live. Last year, Charlotte was No. 6, based on earnings potential, cost of living, housing prices and entrepreneurial opportunities [04].

Conclusion:

In spite of everything, middle-class families do cling to a core belief in upward mobility. That informs their self-image and their aspirations and helps explain the “new luxury” phenomenon: the spread of designer brands and luxury items to the middle class. If African Americans graduated from college at the same rate as whites, much of the gap would disappear. Although African Americans might catch up to whites in income, especially as the national demographics change and fewer white males enter the labor market, they will still have a way to go in matching assets.

Reference

• [01] Robert L. Harris JR, February 1999, “The Rise of the Black Middle Class”

• [02] Anne Field, May 1, 2006,”Twilight of the Middle Class”

• [03] Jim Emerson, September 1, 2001, “African Americans”

• [04] Fred Tannenbaum, February 25, 2005, “An emerging middle class”, Charlotte Business Journal