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Is Black Progress Set To Stall?


Economics: RACE

IS BLACK PROGRESS SET TO STALL?

The Rodney King beating. The Los Angeles riots. The Mark Fuhrman tapes. White horror and black ecstasy at O.J. Simpson's acquittal. The controversies swirling around the Million Man March on Washington. Four decades after the Supreme Court's historic ruling in Brown vs. Board of Education of Topeka and 30 years after the Civil Rights Act of 1964, it seems little has changed in America.

But a lot has changed. The common refrain that America is two nations--black and white, separate and unequal--smothers any appreciation of just how diverse the economic condition of black America has become during the past quarter-century. African Americans have made striking gains. Educational achievement is way up. The black middle class is flourishing. Black entrepreneurs are creating new businesses at a torrid pace. Last year, when the U.S. economy expanded at its fastest clip in more than a decade, black households enjoyed a 5% increase in median income--while white households showed no gain.

At the same time, the economic gap between African Americans and whites endures. The median income of black households is 60% of those of whites. The figures on wealth are even worse. Black households' median net worth of $4,400 is a mere one-tenth of whites' $45,700. The economic plight of the urban poor appears to be worsening. Perhaps most important, many of the powerful economic forces changing America, such as the job squeeze on the less skilled and less educated, affect blacks disproportionately.

JEOPARDY. The gnawing fear is that black economic gains will stall. Conservative broadsides against affirmative action seem largely targeted at African Americans. Black educational gains appear in jeopardy from deteriorating inner-city public schools and the escalating cost of college. A shrinking government and a consolidating health-care industry will offer fewer job opportunities to the upwardly mobile black. The Federal Reserve Board, determined to keep inflation under control, is dampening economic growth and new job creation.

Progress is most apparent in the dramatic expansion of the black middle class. Over the past 25 years, the share of black families earning more than $50,000, in today's dollars, has risen from 8% to more than 20%. The black middle class is narrowing the black-white earnings gap. Median earnings of college- educated black men employed as executives, administrators, and professionals in 1993 were 86% of their white peers, while college-educated black women actually earned 10% more than comparable white women. Over the past five years, the ranks of managers and professional blacks swelled by nearly 30%, vs. an overall increase of 11%. In particular, sharp gains have been made in the number of black mathematicians, computer specialists, doctors, psychologists, lawyers, and other professionals. Black officeholders wield power at all levels of government. General Colin L. Powell, former Chairman of the Joint Chiefs of Staff, is a potential Presidential candidate.

IN THE MONEY. These days, black executives are even starting to climb into the top rungs of management. Richard D. Parsons is president of Time Warner, Kenneth L. Chenault is vice-chairman of American Express, and Warren Shaw is chief executive at Chancellor Capital Management, a giant money-management firm.

Black entrepreneurship is advancing rapidly. Between 1982 and 1987, the number of black-owned companies rose by almost 38%, to more than 424,000, and receipts jumped by 118%, to $19 billion, according to the Small Business Administration. Black business owners, often armed with years of experience in Corporate America, typically compete in the broad marketplace. "I see the most dramatic change in entrepreneurship among African Americans," says John W. Rogers, founder of Ariel Capital Management Inc., the largest black-managed group of mutual funds. "There is more opportunity for African American-owned businesses than for African Americans trying to work their way through the bureaucracy."

Strides in education undergird much of the improvement among African Americans. Black men and women have narrowed the academic gap between themselves and whites. The number of African Americans enrolled in colleges and universities has grown fivefold since 1965. Among 25-to-29-year-olds, 82% of the whites, as opposed to 59% of the blacks, had completed 12 years or more of schooling in 1971. By 1994, these figures were 91% and 84%, respectively. Black test scores have risen sharply. The share of black mothers with less than a high school education fell from 64% in 1970 to 24% in 1990.

Alarmingly, some of this progress now appears at risk. There is a core of inner-city youth who are losing ground. Despite being better educated, many blacks can't find jobs. In 1993, among recent high school graduates not enrolled in college, 72% of whites were employed, compared with 42% of blacks. Whites are still about twice as likely as blacks to receive a college degree, a ratio that hasn't changed much in the past 15 years.

The move to downsize government may hurt black workers more than whites, too. About 24% of blacks aged 16 and over are employed by federal, state, and local government, compared with 15% for whites. Similarly, blacks are vulnerable to the drive to slash Medicare, Medicaid, and other health-care spending. For example, blacks make up 16% of the hospital workforce and 23% of nursing and personal-care employees. And "a large percentage of clients of black physicians are on Medicare or Medicaid. With cuts in those programs, you will see a dramatic impact on those health-care professionals," says Dr. Kneeland Youngblood, an emergency-room physician in Dallas. Adds chemist Kolima David Williams: "When there are cuts, we go first."

BOYCOTT. Support is also ebbing for affirmative action. Recently, the Clinton Administration eliminated the Defense Dept.'s affirmative-action program, and the Supreme Court limited the reach of federal affirmative-action programs. Many blacks are worried that this will harm their ability to get jobs--because discrimination persists. For instance, when the Urban Institute sent out matched pairs of articulate, well-groomed black and white job applicants, 15% of the white applicants got job offers, and only 5% of the blacks.

In Miami, it took a black boycott of the tourism industry between 1990 and 1993 to open up opportunities for the area's professionals. Out of the boycott came a three-year program, Miami Partners for Progress, a coalition of business and community leaders. The organization has placed 95 students with scholarships in hospitality programs, mostly at Florida International University and Miami-Dade Community College, and 20 African Americans from collegiate hospitality programs or related fields have gotten jobs. Large, established companies in the tourist industry are doing more business with black vendors.

TROUBLED YOUTH. The outlook is bleak for African Americans who lack job skills, though. Blacks have become high school graduates just in time to be hammered by the same brutal international competition and technological change that have hit white unskilled workers. Over the past two decades, entry-level wages for both white and black male high school graduates have dropped by about 30% after adjusting for inflation, according to the Economic Policy Institute. But blacks have been hit especially hard because their wages started out lower.

The forces transforming America from an industrial-based economy to a high-tech powerhouse have had a devastating impact en the poor. In many inner-city neighborhoods where manufacturing once flourished, less than 40% of black adults are gainfully employed. Nearly one in three black men 20 to 29 years old is in federal or state prison, jail, probation, or on parole, according to the Sentencing Project in Washington. More and more black children are growing up in poverty. Some 60% of African American families with children are headed by the mother, and more than half of black female-headed households live below the poverty line. Says Marvin Dunn, director of African-New World Studies at Florida International University: "We will end up with an alienated, disaffected, angry, young segment of the population, and that's the formula for disaster."

Everyone agrees it would be a calamity if African Americans' economic progress of the past half-century ground to a halt. These days, economists are focusing on ways to improve public schools, revitalize neighborhoods, and open up employment for poor and working-class Americans, black and white. What Washington policymakers have to consider is that no reform can work without strong economic growth. Robust growth raises incomes of both whites and blacks. More important, it attacks the pinched economic conditions that allow racism to flourish.By Christopher Farrell in New York, with Gail DeGeorge in Miami, Richard A. Melcher in Chicago, Stephanie Anderson Forest in Dallas, and bureau reports


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