Reverse course

December 31, 2007

Despite some progress, the economic mobility of black Americans is still not comparable to that of whites, according to three recent studies by a scholar at the Brookings Institution. Most disappointing is the financial stagnation that has hit black middle-class families, which raises serious questions about the idea that middle-class status guarantees an even better life for children and future generations. The stagnant, even falling, financial prospects for many blacks is a disturbing trend that will require a number of short- and long-term solutions.

Overall, the studies found that in 2004, the median family income of blacks ages 30 to 39 was only 58 percent that of whites. That's a significant setback, since black family income in 1974 was 63 percent that of median white family income.

Black families have fallen behind in part because salaries of black men have fallen and a greater proportion of those families are headed by women. By contrast, although salaries of white men have stagnated or fallen during the same period, incomes of white women increased significantly, boosting family income.

Equally disturbing is that only 31 percent of blacks from solidly middle-class families had incomes greater than their parents, compared with 68 percent of whites from similar families. And about 45 percent of black middle-class children ended up poor, compared with only 16 percent of white children.

Although the studies showed that black children from less-affluent families were more likely to have higher incomes than their parents, their gains were not sufficient to vault them into the middle class.

The studies reinforce similar findings that black families generally rely on current income and lack broader wealth that can offer protection against a temporary economic setback or provide the means to expand financial opportunity. That underscores the importance of savings and asset-building programs that aim to increase wealth among blacks through homeownership and other investments.

More efforts are also needed to improve the prospects of black men and women in the work force, including better educational programs - from early childhood development and preschool programs to expanded training programs that will prepare them to take advantage of higher-paying jobs in a knowledge-based economy.

Better education as well as more secure incomes and assets should help more black families protect their children from economic adversity, and reverse the downward mobility trend.

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