[lbo-talk] meanwhile, the US working class......

Eubulides paraconsistent at comcast.net
Sat Dec 18 10:24:45 PST 2004


http://www.washingtonpost.com/wp-dyn/articles/A8839-2004Dec17.html A Tenuous Hold on the Middle Class African Americans On Shifting Ground By Alec Klein Washington Post Staff Writer Saturday, December 18, 2004; Page A01

MIAMI -- A couple of months ago, Kayasa Cobb entered a dim, cramped cubicle to apply for a job paying about $7 an hour selling clothes at Burdines-Macy's.

Then she started thinking. She already had a full-time job as an executive at an image-consulting business earning $39,000 a year -- slightly more than the national average of $17 an hour -- and was strapped for time as it was. Her husband was holding down two jobs, at a library and a movie theater, to help pay the expense of raising two small children. Did the family really need a fourth income to get by?

"It was absurd," she says of the department store job, which she ultimately decided not to pursue. "It was a crazy idea."

Even as African Americans and other minorities have made economic progress in the last 40 years, many of those reaching the middle-income rung, like Cobb, are finding it a hollow promise. In earlier decades, a union-protected factory worker or government employee earning such a wage could expect a comfortable life with company-provided health and retirement benefits, and perhaps enough money for indulgences such as the occasional new car.

Now, though, blacks and other minorities reaching the economic middle find the ground shifting.

By all rights, Cobb should be making it. She studied evenings and weekends to graduate with a master's degree in human resources earlier this year, and then was hired as operations manager for an African American-owned business, a springboard -- she hopes -- to becoming an entrepreneur herself.

But the 33-year-old and her husband aren't even close to making it. "Why don't we own our home?" she wants to know. "Why don't we have money in the bank? Why are we just making ends meet?"

Changes in the global economy and advances in technology have, of course, buffeted middle-income workers of all races. Blacks, however, have faced some particular challenges.

Beneficiaries of the post-World War II boom in manufacturing, they have lost a disproportionate number of jobs as the factory workforce declined in recent years. While African Americans have made substantial advances in the service sector and have been opening small businesses at a pace quicker than whites, other vulnerabilities work to offset those gains. Employer-sponsored health care and retirement benefits have been eroding throughout the economy, but, in the case of private pensions, have declined faster for blacks. With generally fewer resources to fall back on -- the median net worth of African American families is $19,000, about 15 percent of that for whites -- home down payments move out of reach, and periods of sluggish wage growth, like the current one, hit even harder.

Subject historically to higher-rate credit cards and mortgages, even black families with steady and respectable incomes find themselves treading water or falling behind. According to a recent study by Harvard Law School professor Elizabeth Warren, black families are more than six times more likely to file for bankruptcy than whites.

"In a sense, it's a legacy of the racism that kept today's black families' grandparents out of good paying jobs," Warren says. "That echoes through the generations."

To be sure, there are more African Americans in the upper income bracket than ever before. The portion of black households making $75,000 to $99,999, for example, increased nearly fourfold between 1967 and 2003, rising to 7 percent of the black population. The portion of white households in that income range merely doubled, to 11.5 percent.

But for African Americans, the picture overall is of a group with a tenuous hold on economic health, even for those ostensibly in the middle class.

"Even for blacks who are following the model of the American middle class, going to college, getting a white-collar job, blacks have taken it on the chin," says labor economist William Spriggs, former executive director of the National Urban League Institute for Opportunity and Equality, which analyzes African-American issues. One Step Away

That's how Cobb feels.

She grew up in the shadow of the nearby Miami projects in a small, three-bedroom home with as many as 15 relatives packed in at once. Her mother worked as a state foster care secretary for 32 years, a testament to the type of career security that generation relied on to raise their families. Cobb says her father was killed during a robbery in his home when she was 10 years old.

Cobb was the first in her family to get a college degree. When she was hired in June by HeavenSent Consultants Inc., she was thrust into the biggest job of her life. She had no experience in image consulting -- giving clients advice about how to dress and look better. But as operations manager, she handles accounting and vendor relations and oversees the company's three staffers. On occasion, she also teaches a welfare-to-work class sponsored by the firm.

The job pays $2,000 a year more than what she earned before as an assistant director of human resources at Florida Memorial College. But Cobb didn't take the consulting job because of the money. What she was looking for, she said, was "room for growth," a job that promised the possibility of owning her own business one day. Cobb would like to start a temporary employment agency, and even has a name for it: K's Temporary Service.

"I want to change my life," she says, "so my children won't have to go through this."

By "this" she means the barrage of phone calls, demanding she write a check for her overdue car payments ($346 monthly). There's day care for Kennedy, her infant daughter, at $520 a month. The family's health-insurance premium is approaching $400 a month.

It's little things, like the cubic zirconia ring on her wedding finger; that's all her husband, Jammie, could afford.

It's big things, too, like the $80,000 her family owes in student loans, car loans and credit cards. That's about four times the median debt of a minority family and twice that of whites, according to the latest Federal Reserve figures.

Even with her husband's income -- he earns about $21,000 as a librarian assistant and $5.45 an hour as an usher and maintenance man at a movie theater -- the household is run on a razor-thin margin.

"I feel like I'm one step away," she says, from becoming the welfare recipients she tries to help. Ground Gained and Lost

If it looks tough from Cobb's perspective today, the past century has told a story of progress for blacks and other minorities. The first two World Wars created new opportunities for factory jobs in the North, and blacks migrated by the millions from the Jim Crow South, creating the backbone of a nascent middle class, with relatively secure jobs and benefits. Coupled with the desegregation of colleges and universities and the increasing influence of black communities in urban centers like Washington, African Americans began to find firmer economic ground. Immigrant groups, particularly Hispanics, have also been absorbed into that generally rising economy.

Since 1967, the earliest year for which statistics are available, median household income for blacks has increased by nearly 47 percent, to $29,645 in 2003. That's much faster than the 31 percent growth rate for white households during that time. But the median for black households is still $16,000 less than for white ones, a point reinforced by a study released this week by two Duke University professors who found that African Americans in the baby boom generation have not closed the income gap.

Hispanics have made gains, too, with household median income rising to $32,997 in 2003, up 13 percent since 1972, the earliest year for which Census has tabulated data for that minority group. Asians have a household median income of $55,699, although their rate of growth, at 12 percent since 1987, the earliest year available, has not been as dramatic as it has been for blacks.

Within the trend, however, there are some troubling footnotes. The unemployment rate for blacks remains nearly double the national rate of less than 6 percent. In addition, two of the job categories that have historically helped boost black income -- manufacturing and the public sector -- are stagnating, or worse.

Public-sector jobs opened up to blacks in greater numbers in the wake of the civil rights movement of the 1960s, but cuts in government spending throughout the United States in recent years have limited growth. Black employment in such jobs rose 66 percent from 1983 to 1995 but has been essentially flat since then.

The number of manufacturing jobs, meanwhile, has been sliding for a quarter-century, falling by 10 percent between 1992 and 2002 alone. Blacks lost ground at an even quicker pace: Over that same 10 years, the number of African Americans in manufacturing declined by 18 percent.

As a result, African Americans have turned to the service sector -- spanning such professions as data processing and advertising and lower-level jobs such as housekeeping -- like much of the rest of the workforce, only more so. The number of African Americans working in the service sector has nearly doubled in the past 20 years and now makes up about 43 percent of the black workforce, a percentage larger than for the economy as a whole.

But many of those jobs have been characterized in recent years by anemic wage growth and eroding benefits. On a percentage basis, far fewer blacks than whites are covered by employer-sponsored health care -- 52 percent compared with 71 percent -- and less than 40 percent of blacks are covered by private pension plans, compared with more than 46 percent for whites.

The lack of benefits is also partly due to the fact that blacks have been opening their own businesses in record numbers, and many of those small enterprises don't offer health insurance and pensions. The number of black-owned businesses jumped 33 percent to 823,499 in 1997 from 621,000 in 1992, according to the latest census figures. Black businesses still make up only about 4 percent of the national total, but their growth rate was more than four times the increase for all U.S. firms over that period.

Encouraging as a sign of entrepreneurship, that trend has also presented some hard truths about what it takes to get by, as Cobb testifies. Trapped in a Trend

Cobb's career has followed a common path. As a college graduate, she can be fairly well assured of staying employed: The unemployment rate for those with a bachelor's degree or greater in the United States is 2.5 percent, far below the national average.

Service jobs such as Cobb's now make up about 80 percent of the employment in Miami-Dade County and increased 59 percent since 1990. She also reflects the county's growing black population, which has increased by 23 percent since 1990. That includes her boss, Carla Harris, who moved from Washington to Miami, where she opened HeavenSent.

For much of the past decade, Cobb could feel the momentum of those trends in her own life, as she earned pay raises and promotions.

But every day, Cobb says, she is reminded of her family's economic strains on the way home from work. Listening to Christian radio, she picks up her infant daughter from day care, then her husband from the library, then her 8-year-old son from her mother's house.

All the while, in bumper-to-bumper traffic on I-95 North, the conversation revolves around how they can make their lives better: How can they cut costs? Should her husband go to community college? Where can they afford to live? At home, the conversation continues as her husband cooks a late dinner, while she uses the heel of her infant's white shoe to stamp out a trail of ants crawling on an empty kitchen cabinet.

Things could be worse. Just outside her apartment, they are. In her concrete complex, she says the night is sometimes punctuated by the echo of gunshot, or the crash of a neighbor's door knocked down by police.

"I don't even let my son play outside," she says.

She feels trapped, too.

Earlier this year, Cobb applied for a local government grant to help buy a home in a safer neighborhood. She was denied, she says, because her family made too much money.

"Sometimes, I wonder," Cobb says. "Is my life normal?"



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