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Black-white economic gap in U.S. is still as wide as ever

by Michael A. Fletcher

The Washington Post

When President Barack Obama spoke at the Lincoln Memorial on Wednesday to commemorate the 1963 March on Washington, he symbolized part of the complicated story of America’s racial progress in the past half a century. Can there be more convincing testimony to the breathtaking advancement of African-Americans than a black president?

Yet even as racial barriers have been toppled and the nation has grown wealthier and better educated, the economic disparities separating blacks and whites remain as wide as they were when marchers assembled on the Mall in 1963.

Between 1959 and 1972, the black poverty rate dropped from 55.1 percent to 32.2 percent. But since then, progress has been slow. In 2011, 27.6 percent of black households were in poverty — nearly triple the white rate, according to the Census Bureau.

“The relative position of blacks has not changed economically since the march,” said William Darity, a professor of public policy, economics and African-American studies at Duke University. “The proportion of blacks to whites who are poor is about the same as it was 50 years ago.”

That is hardly what famed labor leader A. Philip Randolph, the driving force behind the event, had in mind when he called for a mass march for “jobs and freedom.” For decades, Randolph, founder of the Brotherhood of Sleeping Car Porters, the first predominantly black labor union, had pushed for economic equality for black Americans.

Speaking with his precise diction, Randolph told the throng on the Mall in 1963 that freedom to use public accommodations without substantial economic progress does not add up to full progress.

“Yes, we want all public accommodations open to all citizens, but those accommodations will mean little to those who cannot afford to use them,” Randolph said in his speech. “Yes, we want a Fair Employment Practice Act, but what good will it do if profit-geared automation destroys the jobs of millions of workers, black and white?”

Randolph’s words seem prescient. The march took place during a period of American economic dominance that ignited unprecedented prosperity and a surging middle class. But the nation’s economy is now shaped as much by global competition and expansion as it is by domestic forces, fanning inequality and slowing the improvement in living standards for all but those at the very top.

“The economic backdrop to the anniversary of the march is the persistence of racial disparities, but you also have black people mirroring larger trends,” said Steven Pitts, a policy specialist at the University of California, Berkeley’s Labor Center. “Given that the March on Washington in 1963 occurred during the golden era of the U.S. economy, the desire to get on the boat made sense because the boat was rising. But now people may be getting on the boat, but it is sinking.”

The march took place at a time when the benefits of American economic growth were widely shared. Between 1947 and 1979, the wages of workers at all salary levels grew by roughly the same percentages.

But between 1979 and 2007, incomes shifted drastically, with the top 5 percent of earners seeing annual salary increases more than three times greater than those in the middle, according to the Economic Policy Institute, a liberal research organization. Overall, 63 percent of total income growth went to the top 10 percent of households between 1979 and 2007, leaving 37 percent of total growth for the remaining 90 percent, according to Algernon Austin, an EPI economist.

Economists most often attribute the changing income distribution to the weakened state of unions, the rise of global labor competition and the premium placed on bankers and others who facilitate global finance.

They also blame the failure of the minimum wage to keep pace with inflation. March on Washington organizers called for raising the minimum wage by 85 cents to $2 an hour, which would translate into an inflation-adjusted $13 an hour in 2013. The current minimum wage is $7.25 an hour.

The nation’s changing economic landscape has hit nearly all workers of all races. But it has had a disproportionate impact on blacks, who are underrepresented among top earners.

The black middle class, measured by the number of families earning at least $100,000 a year, has grown fivefold in the past 50 years. Now, about one in 10 black households are in that income category. The percentage of blacks older than 25 with high school diplomas has more than tripled. The number of blacks who are college graduates has grown by a factor of 10. Overall, blacks’ buying power is estimated to be nearing $1 trillion, while an increasing number of blacks serve as company chief executives.

Yet racial economic disparities are mostly unchanged and in some cases are growing. In 1963, black families earned 55 cents for every dollar earned by whites. In 2011, blacks earned 66 cents for every dollar earned by whites. The black unemployment rate averaged 11.6 percent between 1963 and 2012, more than double the white jobless rate over that time.

The stubborn persistence of racial inequality has left policymakers at odds over what to do. Civil rights leader Jesse Jackson is among those who argue that federal policy should aim directly at closing these racial gaps.

But Obama has resisted targeted efforts to erase racial economic disparities. Instead, he has pushed policies, such as increasing college access and broadening health care coverage, aimed at lifting the fortunes of all middle- and working-class Americans. He said that approach would have a disproportionate and positive effect on black Americans.

Obama has said that closing gaps in educational achievement will go a long way toward closing racial inequalities.

Others are not so sure. “I’d love to run the president’s experiment,” said Darity, the Duke professor. “We really have to face up to the fact that there is a persistence of discrimination that explains a lot about income and employment gaps.”

Darity called the evidence of discrimination irrefutable. He noted that the 12.1 percent jobless rate for blacks with some college education was higher in 2012 than the 11.4 percent rate for white workers who have not finished high school. He also pointed to work by Princeton University researcher Devah Pager, who found that a black job applicant with no criminal history got a callback or job offer about as often as a white applicant with a felony conviction.