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). Economic Mobility Project
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.
Many of us believe that wrongs aren’t wrong if it’s done by nice people like ourselves. – Author Unknown