In what can surely be called unusual and frightening, it appears that black wealth cannot be transferred between generations. In a recent study done by the Economic Mobility Project, which was funded by the Pew Charitable Trusts, a non-partisan think-tank; a staggering 45% of children whose parents were solidly middle-class have fallen completely to the bottom rung of the economic ladder. These were children who were raised middle-class; they went to the better schools and enjoyed the trappings of middle-America. So what happened?
A startling 45 percent of black children whose parents were solidly middle income end up falling to the bottom income quintile, while only 16 percent of white children born to parents in the middle make this descent. Similar trends are found in other income groups as well. In another disturbing example, 48 percent of black children and 20 percent of white children descend from the second-to-bottom income group to the bottom income group. In addition, black children who start at the bottom are more likely to remain there than white children (54 percent compared to 31 percent).[1]
Here is what is disturbing about this study, whatever gains blacks are making they are unable to sustain them from generation to generation. Why is this disturbing? It is disturbing because wealth is built over generations with each generation building on the previous one. The parents acting as building blocks for their children to build increasing wealth, for some reason this does not seem to be happening for blacks. In fact not only is it not happening, but blacks are actually losing wealth between generations. Children who should be moving from middle-class to upper middle-class are instead falling to the bottom rung and being forced to start all over.
Here in America, we pride ourselves on certain myths; that hard work equals success, that we live in a mobile society, and that anyone can achieve the American Dream. The unfortunate truth is that these are not true and that they are just myths. Where one ends up in this society is based a great deal on where one starts. The myth of the poor child that grows up to be wealthy, a self-made millionaire is next to impossible. Only 6% of children who start at the bottom ever makes it to the top, those are not very good odds. I use to frown on poor people who played the lottery, but with these odds they may have a better chance at the lottery. What the study suggests is that no matter what decisions a poor child makes its impact will only be marginal at best. The most he can hope for is middle-class and that appears to be fleeting.
The question then becomes why are blacks not able to maintain or build on their middle-class status? Is that the glass ceiling for most black families in America? While the study provides the data it provides little in the way of conclusions, I guess leaving those for the pundits on both sides of the issues. You know the true experts.
I have a few theories that I would like to submit for discussion and deliberation. The first involves the nature of labor in America, there was a time when a person could get a manufacturing or labor intensive job with little or no education that would pay the person a wage that would allow them to live a middle-class lifestyle. A man could with or without a high school diploma with a strong back and a good work ethic earn enough to escape the bottom rungs of the economic ladder and place his family in middle-class status. Before our high-tech and service oriented economy, many men black and white were able to provide their families a decent life with little more than basic skills. Those days are gone along with our manufacturing industries to off-shore sites where their people will be able to provide their families a step up the economic ladder.
Somewhere there was a disconnect in the black family, instead of using their middle-class status to pursue higher education and career goals than their parents, something else happened to the children. Many black children are now doing worse than their middle-class parents, their incomes have dropped as all male income has flattened out and without the technical skills they are unable to gain access to the new middle-class jobs. This can only be due to two reasons, either the children of middle-class blacks did not adequately prepare themselves for the future or even with preparation they were not able to secure the jobs that provided the income to eclipse their parents. In either case, the question is why?
Another theory is that because the blacks in the 60’s were already at the bottom of the economic ladder due to Jim Crow and segregation which had just been outlawed, their rise would have been meteoric and not necessarily indicative of true progress. Their children could not be expected to replicate their success. I disagree with this, if the purpose of gaining economic status is to improve the opportunities of one’s children then these children should have been exposed to greater opportunities for advancement. Here is the problem, because many of the black middle-class of that time were uneducated and often unskilled many did not promote higher education. Their livelihoods had not been created by education, but by labor so many did not understand the value of education. Many black parents instead promoted hard work over educational achievement. While intelligence is not hereditary, the pursuit of it is. If a parent does not teach the child or express to the child the value of education, the child will not view it as important. Hoping that they too would follow the path of their parents many children have been hard hit by the lost of these labor intensive jobs.
The other issue is that while the parents were middle-class by incomes, they were not middle-class in wealth. Income is what you make, wealth is what you keep. Many of the parents were either unwilling or unable to save money and create wealth which could have been transferred to their children through paying for college, providing startup costs for a business, or a down-payment for a home. These are the three most common ways that wealth is generated in the middle-class. Without these fail-safes it is inevitable that the children would lose any gains made by the parents. Due to a lack of savings and wealth, the black family is not insulated against the costs of living that can plunge a family back down the economic ladder. This fact is true throughout all strata of the economic ladder, there is a large discrepancy between the wealth of whites and the wealth of blacks. Even whites in the lower fifth of the economic ladder still have more wealth than their black counterparts. Where did they accumulate this wealth?
Finally, the biggest gain for white families versus black families has not occurred due to white men earning more, the truth is that wages for all men have been flat-lining for decades, it is due to white women joining the work force. Their entry into the workforce has provided the white family with another income source and as women’s wages have continued to rise and so has the family’s income. White women and black women in the middle income brackets make comparably the same wages, the difference is that the black woman is often times the sole wage earner in her home whereas the white woman is just half of the income producer. In other words the recent increase or separation in white family incomes versus black family incomes is in the makeup of the families. Because whites tend to marry more than blacks they have two incomes versus the single income for blacks. In the past, both groups married at comparable rates, today that is no longer the case and it is showing up in the disparity of income and wealth.
So, there are many causes that have prevented blacks from benefitting from the middle-class boom of the 60’s and 70’s. Some have been the result of racism, some have been the result of a changing economy, and some have been the result of a lack of planning. The truth is we really don’t know exactly what has prevented the transfer or growth of the black middle-class. I would be interested in any ideas or results from studies that I am not familiar with. There is a growing chasm in America, it is not only between rich and poor, but it is also between rich and middle-class blacks and poor blacks. The results of this study demonstrate that we have a long way to go and maybe we weren’t as far along as we thought we were. Until blacks are able to transfer and build their wealth across generations each generation will have to start from the bottom and work their way up and we all know what the chances of that is.
[1] http://www.economicmobility.org/assets/pdfs/EMP_Key_Findings_11-13-07.pdf
Wednesday, December 5, 2007
Black Wealth; Non-Transferable
Friday, June 22, 2007
The Union, Jack
In today’s technologically advanced workplace, do we still need unions? Have unions lost their viability? There is debate going on concerning the Employee Free Choice Act and its impact on the American worker and economy.
The Employee Free Choice Act, would require employers to recognize a union if the majority of workers simply sign cards showing their support rather than hold a vote. It also strengthens penalties against employers that violate federal law against union organizing. There are many who argue that because of the loss of manufacturing and more physical type labor the need for unions has passed. I would submit that because of the weakening of the labor movement we have a shrinking manufacturing industry and a loss of middle-class opportunities.
Protecting the right to form unions is about maintaining the American middle class. It’s no coincidence that as union membership numbers fall there are growing numbers of jobs with low pay, poor benefits, and little to no security. More than half of
Because of intimidation and media savvy consultants the major corporations have convinced a generation of workers that they did not need unions. They promoted how unions were corrupt and outdated; it is no surprise that as the populace became more self conscious (me generation and the greed generation) that the argument held sway with many younger workers. These workers were too young to remember the conditions that brought about the need for unions in the first place, the long hours, the unsafe working conditions, and the low wages of their parents and grandparents generations. Those were greedy robber barons back then the modern corporations would be more benevolent towards it workforce. Let’s ask the employees of Enron, Tyco, and a whole slew of other corporations how benevolent the modern corporation is.
Why has this happened? It’s not a result of a neutral, inevitable economic fact, like the sun setting in the west. It happens because corporations can get away with hogging the fruits of economic activity. It happens because politicians will not stand up and decry either the unfairness of the theft and the underlying corporate greed that siphons away workers’ deserved rewards.
And, sadly, it reflects the weak state of the labor movement. When unions are strong, everyone benefits—union and non-union workers alike. Through collective bargaining, unions act as a counterforce to an unjust diversion of income, creating a system that spreads out the rewards for hard work. Unions turn bad jobs and low wages into good jobs and decent livelihoods. The best middle-class jobs program is, indeed, mass unionization.
Let me make two side points here. First, when wages don’t grow, even when productivity is high, it undermines our nation’s retirement system. This is because taxes on workers wages are the central revenue source for the Social Security system. A key reason the 1983 Greenspan Commission’s modifications to the Social Security system came up short is precisely because wage growth did not match what had been forecasted more than two decades ago. “If wages had grown as the Commission forecast, and inequality had not increased we wouldn’t even have a Social Security shortfall over the next 75 years,” observes Mark Weisbrot, co-director of the Center for Economic and Policy Research. Weisbrot is quick to point out that the projected shortfall is quite small, and according to President Bush’s numbers, the program today is financially stronger than it has been throughout most of its 70-year history.
Second, the outsized corporate windfall from productivity works hand in hand with the other factor propelling the massive redistribution of income in society: Compensation and tax policies that are shifting vast wealth to the upper 10 percent of the population.[2]
It is nothing short of amazing how the wealthy have convinced our nation that welfare for corporations is good, but welfare for the poorest Americans is bad. That record profits for corporations and record salaries for executives is good, but minimum wages and wage increases for average workers is bad. How have we allowed ourselves to be co-opted into this outrageous scenario is beyond words. These things can only occur because we allow them to, while we are so busy fighting over crumbs they are stealing us blind. While we are so concerned with the color of the skin of the guy next to us in the same life boat we are in. Is that insane or what? As long as we continue to allow foolish things to divide us, we will never be able to overcome those who want to keep us all down. If you think that those in power are more concerned about your needs than mine because you are a different shade than me, you are sadly mistaken. There is only one color that matters and that is green. The middle-class has not shrunk because of illegal aliens from
Have unions been corrupt in the past? Yes, but have they been anymore corrupt than their corporate cousins? There have been more workers who have had their retirements decimated by corporate malfeasance than union corruption. If we want to increase wages for average Americans and gain some semblance of job security, unions are our best bet. Unions help all workers, even non union workers. Unions are good for
[1] http://araw.org/takeaction/efca/about.cfm
[2] http://www.tompaine.com/articles/2005/07/14/the_productivity_problem.php
Wednesday, May 23, 2007
Poverty In America
WASHINGTON - The percentage of poor Americans who are living in severe poverty has reached a 32-year high, millions of working Americans are falling closer to the poverty line and the gulf between the nation's "haves" and "have-nots" continues to widen.
A McClatchy Newspapers analysis of 2005 census figures, the latest available, found that nearly 16 million Americans are living in deep or severe poverty. A family of four with two children and an annual income of less than $9,903 - half the federal poverty line - was considered severely poor in 2005. So were individuals who made less than $5,080 a year.
The McClatchy analysis found that the number of severely poor Americans grew by 26 percent from 2000 to 2005. That's 56 percent faster than the overall poverty population grew in the same period. McClatchy's review also found statistically significant increases in the percentage of the population in severe poverty in 65 of 215 large U.S. counties, and similar increases in 28 states. The review also suggested that the rise in severely poor residents isn't confined to large urban counties but extends to suburban and rural areas.
If anyone needed a reason to support John Edwards this should do the trick. No one in the race Republican or Democrat is speaking out more or with the specificity of Senator Edwards. After we finally get untangled from Iraq, poverty will be an issue that must be recognized and dealt with. This administration has used the Iraq war to ignore and deprive the poor, while allowing the corporate profits and CEO salaries to reach all-time highs. There is a problem when you have these types of record extremes. It is an indication that the ones in the middle are disappearing. If we do not address this problem America will begin to resemble our Central and South American neighbors, where you have a few very wealthy people and the majority very poor. I believe that democracy cannot survive without a middle-class. I think that the larger the middle-class the stronger the democracy. Those with the largest stake in democracy are the middle-class. The rich don’t need it and the poor don’t believe in it.
So, what are we to do with the severely poor? How do we defeat the systemic causes of extreme poverty in America? Can we free those who are entrenched in this cycle of poverty?
Fighting poverty is a job for government, but it is also a job for all of us in our own communities. I believe our nation is up to this challenge. Hurricane Katrina exposed us to heartbreaking images of extreme poverty but it also reminded us of the extraordinary compassion of the American people -- millions opened their hearts, homes and wallets after the storm.
We need to speak up when we know something is wrong. Let's put poverty on top of the national agenda and pledge to hold our government accountable for ignoring the suffering of so many for far too long. I’ve traveled the country for more than a year, meeting with people who are struggling to get out of poverty. One thing I’ve noticed in these conversations is that they have never had a champion. They have no idea what it’s like to have somebody to speak up for them. All of us must champion their cause.
We must act both locally and nationally to fight for a higher minimum wage and other measures that will improve the lives of low-income families. And we need to get involved when our neighbors are in need. This can be as simple as volunteering your time to be a mentor to a young person or to help build a house for a homeless family. Each of us can make a huge difference.[1]
According to Senator Edwards government and individuals must play a role in solving this national scourge. There is no one right way to do this. It is going to require all of us to come together and collectively exchange ideas and resolutions. I think one of the biggest problems is that we have allowed Conservatives to scare us off this issue. So what everything we tried in the past didn’t work, but that doesn’t mean we throw out the baby. We must be willing to do what this administration is not and that is to evaluate our strategies and when they don’t work, we try something different. We need to include everyday people in the process as well. One of the things that help to drive innovation in the business world was the suggestion box. A simple little thing like that can make a world of difference. It allowed the people dealing with the problem an opportunity to help solve the problem. Who knows better where to start looking for a solution than those who are at ground zero of an issue?
Solving this issue is one of the most difficult and pressing concerns of this nation. We can no longer continue to let the gap between the richest and the poorest grow at these record rates. We have the money and we have the knowledge[2] of what works from years of studies and experience. What is missing is the political will to act. We are also missing the leadership to take up this challenge. When President Johnson launched his “war on poverty” there were plenty of naysayers and intransigents, but because of his strong leadership and political capital he made hard fought gains. And in doing so, he helped to reduce poverty by its largest margins since the depression.
Now it is our turn to complete the process. Will we continue to turn a blind eye to the poorest among us, while the wealthiest continue to make record growth? Will we continue to step over the fallen strangers pretending not to see, rather than being the good Samaritan? The answers to these questions will say a lot about who we are as a nation and what values we believe are important. We have the technology to solve this, do we have the desire?
[1] http://www.southernstudies.org/facingsouth/2006/07/senator-john-edwards-on-poverty.asp
[2] http://www.washingtonpost.com/wp-dyn/content/article/2007/04/25/AR2007042502442.html
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