Blacks and the American Economy 2000-07

[Excerpt from "Reversal of Fortune: Economic Gains of the 1990s Overturned for African-Americans from 2000-07" (PDF) by Algernon Austin]

On all major economic indicators—income, wages, employment, and poverty—African Americans were worse off in 2007 than they were in 2000. Although the American economy has grown significantly since 2000, African Americans have not shared in America’s prosperity. Th e current economic downturn and the subprime mortgage crisis bode ill for the immediate future for African Americans.

The overall social well-being of African American communities depends upon strong job growth. The historical evidence shows clearly that strong job and wage growth are the keys to reducing black poverty. Without reductions in child poverty, we can expect continued lower educational achievement, higher rates of teen pregnancy, and a higher than average rate of crime in black communities.

All Americans are hurting from the failure of recent strong productivity growth to translate into wage growth for average workers. All Americans will benefit from a more equitable distribution of the wealth of American society. African Americans, in particular, need policies that will attend to their low employment rates, low wages, and high poverty rates.

A decade ago, the economic outlook for African Americans was quite different. In 1999, the journalist Ellis Cose wrote, “It’s the best time ever to be black in America. Crime is down; jobs and income are up” (Cose 1999). The tight labor market of the 1990s produced increasing employment, higher wages, and a historic drop in the poverty rate for blacks. Home ownership, the major source of wealth for most Americans, was on the rise for African Americans. By 2000, the median black household income had climbed to its highest level ever, while black unemployment and poverty rates had declined to their lowest levels on record. If these trends had continued, African Americans would have made significant advances in closing economic gaps with whites.

These trends did not continue, however. The recession of 2001 brought African American progress to a halt and reversed the gains blacks made over the 1990s. The jobless recovery that followed brought no significant economic progress for African Americans.

The U.S. economy regularly goes through cycles of upswings and downswings, but the recent cycle—including the expansion—has been a particularly bad one for the country (Bivens and Irons 2008) and especially so for African Americans. Job growth since the 2001 recession has been extremely weak. In the 2000s business cycle, employment increased at one-third of the pace of the 1990s cycle (Shierholz 2008).

For most of the 20th century, increased productivity led to increased wages. Since the 1970s, with the exception of the 1990s, increased productivity has not been matched by comparable increases in wages (Mishel et al. 2008). From 2000 to 2007, although American workers were 19.2% more productive on average, the weekly wages for prime-aged workers declined by $1. The weekly wages for prime-aged African American workers declined by $3. The wealth created by the American economy has been going overwhelmingly to the richest Americans.

Overall, the economic condition of African Americans has worsened since 2000. Wage growth for the median black worker has stagnated, incomes and employment have declined, and poverty has increased. This Briefing Paper shows:

• African American median family income declined by $404 or 1% between 2000 and 2007. This is the first decline in black median family income in a business cycle of this length since World War II. Single, African American, male-headed families saw the largest percentage decline—9.1%—in median family income.

• Worker productivity grew 19.2% between 2000 and 2007, but wage growth for American workers generally and African American workers specifically has stagnated. For black workers 25 to 54 years old, the median black weekly wage fell 0.6% from 2000 to 2007.

• The African American unemployment rate increased by 0.7 percentage points between 2000 and 2007, while the employment rate shows a 2.4 percentage-point decline, or three times the number not working indicated by the change in the unemployment rate.

• The black home ownership rate, after increasing to 49.1% in 2004, dropped to 47.2% in 2007. Because the foreclosures from the housing crisis have continued into 2008 and will likely continue into 2009, the African American home ownership rate is also likely to decline into 2009.

• The tight labor market of the late 1990s led to the largest decline in African American poverty since the 1960s. From 1989 to 2000, the black family poverty rate fell by 8.5 percentage points. In contrast, from 2000 to 2007, the African American family poverty rate increased 2.8 percentage points.

• Crime and criminal justice policies are increasingly entangled with the economic outcomes of African Americans and particularly of black men. If one adjusts the employment rate of African American men by counting men in prison as non-working, the already low African American male employment rate drops by about 3 percentage points.

[Read the full report. (PDF)]


Children of Color and the Future of America

[Originally published on The Daily Voice.com.]

The children are our future. All Americans understand this truism. What we don't seem to understand is that this refers to all American children, not just the children of our own racial or ethnic group. Do whites realize that black children are their future? Do blacks understand that Hispanic children are their future? Do Hispanics know that Asian children are their future? So far, I'm not convinced that this is the case.

The latest news from the Census Bureau is that a majority nonwhite America is arriving sooner than we thought. Already, 43 percent of Americans under 20 years old are nonwhite. Whether we are ready for it or not, the future is coming.

All Americans would like the country to be strong and prosperous ten, twenty, thirty years from now. What we don't seem to realize is that the future prosperity of the country depends on how we treat our children today--all of our children. Currently, we are subjecting the majority of our future workforce--nonwhite children--to segregated and inferior schools, high rates of child poverty, counterproductive criminal justice policies and overt and covert racial discrimination in the labor market. We simply won't be the best we can be while continuing this status quo.

Who in America believes that the country would be better off with a less educated workforce than we have today? Yet our current educational policies and priorities mean that this will likely be the case. Hispanics and blacks have significantly lower educational attainment and achievement levels than whites. If we don't improve this situation, the country as a whole will suffer, not just Hispanics and blacks. We need to make sure that Hispanics and blacks have access to education of as high quality as whites from pre-kindergarten to college.

We know that poverty is bad for children. Children growing up in poverty do worse in school and are more likely to become involved in crime. Among developed nations, guess which country has the highest child poverty rate? That's right--the United States. In 2000, by the international standard of 50 percent of the national median income, 22 percent of American children were in poverty. In Germany, it was 10 percent. In Denmark, 2 percent.

If we adopted European-style anti-poverty tax transfers, we could make big reductions in child poverty. Anti-poverty policies would benefit not only Hispanics and blacks, but also a significant number of Asian-American children. Few people realize that Asian Americans, particularly those of Southeast-Asian descent, have higher than average poverty rates. Asian-American children's future success in American society depends on a commitment by non-Asian Americans to reducing child poverty.

Although the nonwhite population is growing rapidly, even in 2050, about two out of every five American workers will be non-Hispanic whites. White children also need good schools, less poverty and smarter criminal justice policies. The impact of our criminal justice policies on whites is rarely discussed since blacks and Hispanics are more adversely affected. But whites too, especially poorer and less-educated whites, are also hurt by our misguided criminal justice policies.

It is much better to have whites in the workforce being productive citizens than languishing in prisons and draining tax revenues. But our criminal justice policies do not reflect this priority. In 2000, the white incarceration rate in the United States was already about three times the European average. In the years since 2000, things have already become significantly worse. For white males, of the prime working ages of 18 to 54 years old, their number in prisons and jails increased by 11 percent from 2000 and 2007 to reach 700,000. For comparable white females, their number increased 51 percent to reach 93,000. The American incarceration rate should not be so high. With better criminal justice policies, we could have less crime and less incarceration.

Americans have a choice. We can begin to make the serious investments in our children--of all racial and ethnic backgrounds--and make sure that the country is strong and prosperous into the future, or we can pretend that the kids who do not look like us don't live in America. We can choose a politics that embraces the multiracial reality of America or one based on fictions of "us" and "them." One of these approaches will succeed and one will fail. The choice is ours.


The Teen Pregnancy Discussion We Are Not Having

Algernon Austin presents an excellent, concise, and wonderfully read scholarly examination of the complicated landscape of race, class and popular perception. Besides the prison industrial complex, black strides in education, poverty rates, crime and other indices contradict claims that blacks are “moving backward.”
--Jeffrey O. G. Ogbar, Director, Institute for African American Studies, University of Connecticut and author of Black Power: Radical Politics and African American Identity (The Johns Hopkins University Press), 2004 and Hip-Hop Revolution: The Culture and Politics of Rap (University Press of Kansas), 2007.

Purchase Getting It Wrong: How Black Public Intellectuals
Are Failing Black America
by Algernon Austin
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The line of the Republican Party on Bristol Palin’s teen pregnancy is that it is a common event in typical American families (see last week’s article), but that is simply not true. The vast majority of American teens do not have babies. White teens and Alaskan teens are less likely than average to have a child. For these reasons, it is incorrect to characterize the Bristol Palin pregnancy as a common occurrence.

According to 2005 data from the National Campaign to Prevent Teen and Unwanted Pregnancy, [PDF] 11 percent of white girls gave birth to a child by the age of 20. For black girls, it was 24 percent. Even if Bristol were black, her giving birth to a child would be a relatively rare event. (Note that becoming pregnant and giving birth are different things, and thus the pregnancy rates and birth rates are not the same.)

The bloggers at the National Campaign have been mystified like myself by the national reaction to the Bristol pregnancy. Here is one post:
Daddy Get Your Gun: So, let's see if I have this right: teen pregnancy is okay—"beautiful," in fact—as long as no abortion occurs and as long as there is a shotgun marriage. In addition, becoming a parent at 17 or 18 is preferable to a bit of accurate sex education and preferable to using birth control.

A full seven years ago, E.J. Dionne wrote, "It's better for unmarried teens to avoid premature sex than to use contraception, but it's better to use contraception than to get pregnant." I guess the revision we are asked to swallow is, "It's better to get married as a teen than to use contraception," even though 60% of teen marriages fail, and 80% do when the bride is pregnant.
Most Americans, I suspect, would think that the idea that teen pregnancy is preferable to sex education is crazy, but, apparently, not Sarah Palin.

Bristol's pregnancy should be used as an example to spur a deep discussion about teen pregnancy, but this discussion seems to be the last thing that the Republican Party leaders want. For if we were to do so, the hypocrisies and misinformation around Bristol’s pregnancy would be revealed.

The “Bristol statement” by the National Campaign is a good beginning for a serious discussion:
The teen pregnancy and birth rate have declined dramatically since the early 1990s (down 38% and 32% respectively) driven by decreases in sexual activity and increases in contraceptive use.

Even so, recent data show that the declines in teen sex and improvements in contraceptive use have leveled off and that the teen birth rate is on the rise for the first time in 15 years.

At present, 3 in 10 girls in the United States become pregnant by age 20.

At present, half of all pregnancies in the United States are unplanned and about 8 in 10 pregnancies to teens are unplanned.
What we can deduce here is that both less sex and more contraceptive use reduce pregnancy and birth rates. Also, teens today, generally, don’t plan to become pregnant.

It is important to have some historical sensibility about this issue. Teen pregnancy was both much more common in the past and less of a big deal because people married and entered the workforce earlier. Also, education was less important.

But times have changed. Some reasons why it is important to reduce the rate of black teen pregnancy and births are:
  1. Most teen pregnancies are unplanned. Planned pregnancies are best.
  2. Teen pregnancy interferes with completing high school, and it is more important than ever for blacks to complete high school.
  3. Children have better social outcomes with older parents.
  4. Side benefit: Blacks have high rates of sexually transmitted diseases. The techniques that reduce pregnancy and birth rates also reduce STD rates.
No doubt there are other benefits to reducing the rate of black teen pregnancy. Discussing these benefits are what the Bristol whitewash is preventing us from doing. It appears that one effective means to reducing black teen pregnancy is comprehensive sex education—sex education which teaches the benefits of abstinence and of careful and consistent contraceptive use.

It is not possible to know for sure without a real analysis, but it appears that the decline in black teen pregnancy and birth rates followed the decline in black poverty. Now that the black poverty has risen some, the teen pregnancy and birth rates are also rising.

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--Algernon Austin, Ph.D.

Copyright © 2005-2008 by Thora Institute, LLC. All Rights Reserved.


What If Bristol Palin Were Black?

An invitation for Thora Institute readers in the D.C. Area

Join Algernon Austin, Julianne Malveaux and Deepak Bhargava in celebrating the launch of the Economic Policy Institute's Program on Race, Ethnicity, and the Economy. This program is directed by Algernon Austin.

Julianne Malveaux, President of Bennett College for Women and author, will introduce the program.

Deepak Bhargava, Executive Director of the Center for Community Change, will discuss the importance of race and ethnicity for community organizing.

Algernon Austin, program director, will briefly discuss the program's agenda and goals and provide highlights from new research on the recent economic experience of African Americans.

An informal reception will follow.

Thursday, September 18, 2008, from 5:30 p.m to 7:00 p.m.
Economic Policy Institute
1333 H Street, NW, East Tower, Suite 300
Washington, DC 20005

Cocktails and assorted refreshments

Please RSVP by Monday, September 15, 2008

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I’ve spent the past week wondering what planet am I on. In the 1990s, the Republican Vice President, Dan Quayle made a point of condemning the out-of-wedlock birth of a fictional television character for setting a bad example. Now we have a candidate for the Vice Presidency with a teenaged daughter with a real out-of-wedlock pregnancy. For social conservatives, I would have expected this development to be a huge affront to their conception of “family values” in a family that could be expected to be a role model for the country. I waited for the blast of outrage. It never came.

From the news reports, social conservatives seem to range from indifferent to celebratory about this out-of-wedlock teen pregnancy. The New York Times reported:
Early reaction among women at the Republican convention to the news about Bristol Palin’s pregnancy was almost uniformly supportive.

“This happens to people in all walks of life,” said Karen Minnis, 54, a state representative from Oregon.

. . . “She comes from a great family and it just shouldn’t be an issue.”

When Pam Younggren, 61, of Fargo, N.D., was told the news of the 17-year-old’s pregnancy, she shrugged. “Well, she wouldn’t be the first one,” she said.

“We can’t control what our daughters do,” she said. “I don’t see it as a problem.”
There were similar reactions in another Times story:
In Alaska and here in the convention halls in St. Paul, some said Ms. Palin’s struggles only made her more human, more like them.

“She’s real, and she’s been there,” said Rachel Paulding, 25, of Hatcher’s Pass, Alaska, near Anchorage. “She has got five kids, and some of them are bound to have problems. That is just normal life.”

And in Minnesota, Kris Bowen, an alternate delegate from Indiana, said she now felt more connected to Ms. Palin. “Now she’s a typical American family,” said Ms. Bowen, the mother of two boys ages 10 and 12. “On an individual level, every single person is thinking, ‘Oh my gosh, that has happened to me or someone I know or I’m afraid it will.’ ”
This does not seem at all like Dan Quayle’s Republican Party.

I’ve also been waiting for Bill Cosby, Juan Williams and Orlando Patterson to “call out” Bristol Palin for her bad behavior. These three have been leading the condemnations of black youth for the past four years. Their favorite topics have been teen pregnancy and out-of-wedlock births. Cosby has disapproved of the apparent acceptance of out-of-wedlock teen births:
No longer is a person embarrassed because they’re pregnant without a husband. . . . If you knock up that girl, you’re gonna have to run away because it’s going to be too embarrassing for your family. And in the old days, a girl get pregnant, she had to go down South, and then her mother would go down to get her. But mother had the baby. . . . The mother had the baby—in two weeks.(Quoted in Dyson 2005: 141-2)
. Cosby remembers when girls and their families were so embarrassed that mothers would claim their daughter’s baby as their own. Williams thinks Cosby is generally correct in his condemnations of blacks, and he adds that what people need to do is “have children only after you are twenty-one and married” (Williams 2006: 215). Cleary, Bristol Palin did not follow the path outlined by Williams.

Has Cosby, Williams or Patterson “called out” Bristol Palin? Certainly they should have something negative to say. For four years, they’ve had op-eds in national papers and interviews by the major television networks condemning blacks for teen pregnancy and out-of-wedlock births. So far, I haven’t heard a peep from Cosby and company. I may have missed it, but their previous outbursts were unavoidable.

What’s going on? What’s going on with white social conservatives and the new black public intelligentsia? Where is the outrage?

There are lots of things going on. One is that famed Republican Party unity that allows for top down decision-making that keeps everyone on message. The other is the planned “shotgun marriage” to the young man who had previously said he did not want kids.

A third thing that I think is going on here has to do with race. Because Bristol Palin is white, it is easy for Americans to think of her as a “good girl” who made a mistake. For black girls, it is easy for Americans to think of them as “bad girls.” Period.Quayle’s argument about out-of-wedlock births was that they were the ultimate cause of the 1992 Los Angeles riots—the riots that followed the acquittal of the police officers for beating Rodney King. Clearly, Quayle was really talking about black people and their “bad values.”

When black girls have babies, it is worthy of condemnation. When a white girl gets pregnant out-of-wedlock, it’s an entirely different story. It is simply something that “happens to people in all walks of life.” It “just shouldn’t be an issue.” It no big deal because, “We can’t control what our daughters do.” It’s “just normal life.” It just shows that the Palins are “a typical American family.”

It can’t recall at time when the hypocrisy has been this thick.


Dyson, Michael Eric. 2005. Is Bill Cosby Right? Or Has the Black Middle Class Lost Its Mind? New York: Basic Civitas Books.

Williams, Juan. 2006. Enough: The Phony Leaders, Dead-End Movements, and Culture of Failure That Are Undermining Black America—and What We Can Do About It. New York: Crown Publishers.

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--Algernon Austin, Ph.D.

Copyright © 2005-2008 by Thora Institute, LLC. All Rights Reserved.


The Minimum Wage, Unions and the Economic Health of Black America

Algernon Austin presents an excellent, concise, and wonderfully read scholarly examination of the complicated landscape of race, class and popular perception. Besides the prison industrial complex, black strides in education, poverty rates, crime and other indices contradict claims that blacks are “moving backward.”
--Jeffrey O. G. Ogbar, Director, Institute for African American Studies, University of Connecticut and author of Black Power: Radical Politics and African American Identity (The Johns Hopkins University Press), 2004 and Hip-Hop Revolution: The Culture and Politics of Rap (University Press of Kansas), 2007.

Purchase Getting It Wrong: How Black Public Intellectuals
Are Failing Black America
by Algernon Austin
Barnes & Noble.com Amazon.com
[Note to Firefox Fans. If you cannot view this site with Firefox, you may need to clear your cache and then reload the page. Go to “Tools,” then “Network,” then “Clear Now” the cache, then reload page.]

Too many of the discussions of black economic conditions today avoid economic factors. We can take a quick look at a few that are almost absent from popular discussions. Since the 1970s, there have been a variety of factors that put downward pressure on black incomes. One has been the fact that the real value of the minimum wage has been trending downward. In 1965, the minimum wage was $6.57 in 2005 dollars. In 2005, it was $5.15. Blacks are more likely to be earning the minimum wage so this trend affects blacks disproportionately.

Source: Economic Policy Institute

Blacks in unions earn a wage that is on average 12.1 percent higher than non-unionized blacks. In recent years, that means that the non-union median black wage was $12.74 an hour, but the median for unionized blacks was $14.28 an hour. The unfortunate trend is that the share of blacks in unions have declined significantly.

Source: Center for Economic and Policy Research

Source: Center for Economic and Policy Research

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--Algernon Austin, Ph.D.

Copyright © 2005-2008 by Thora Institute, LLC. All Rights Reserved.