More Than Just Bonuses

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.

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The outrage over the AIG bonuses runs the risk of missing the larger point of the increasing income inequality in America. The culture-of-poverty argument about the black poor also misses this development. Since the 1970s, the wealth created by the American economy has been increasingly concentrated among the richest Americans. We can see this shift by looking at the minimum wage and the wages for workers by decile.

In 1968, the minimum wage was $7.63 in 2005 dollars [PDF]. In 2005, it had declined by about a third to $5.15. The minimum wage serves as a floor for all low wages. When it moves up, it pushes up the wages of workers earning just above the minimum wage. When it declines, the reverse happens. These workers at the bottom of the wage distribution are disproportionately black.

In 1975, workers at the 90th percentile of the wage distribution earned 3.8 times [PDF] what workers at the 10th percentile did. By 2005, the ratio had increased to 4.5. A similar trend occurred with the ratio of the 90th percentile and the 50th percentile. That ratio went from 1.9 in 1975 to 2.3 in 2005. Again, the workers in the lower half of the wage distribution are disproportionately black.

When the poverty punditry talks about black poverty without paying any attention to economics, they are "getting it wrong." The increasing income inequality that America has experienced since the 1970s is one reason why the black poverty rate is so high.

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--Algernon Austin, Ph.D.

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