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Original article URL: http://bridgemi.com/2013/10/the-race-to-join-the-middle-class-its-a-steeper-climb-for-minorities/

Economy & competitive position

The race to join the middle class: it’s a steeper climb for minorities

ON TRACK: Students learn machinist skills in a Focus: HOPE classroom. The program is designed to put them on a career path to a middle-class income. (Courtesy photo)

ON TRACK: Students learn machinist skills in a Focus: HOPE classroom. The program is designed to put them on a career path to a middle-class income. (Courtesy photo)

Craig Vanderburg will be the first to tell you that he’s worked hard for what he has, but caught a few breaks along the way.

He came from African-American parents who were college graduates and valued education, so higher education was an expectation, one he readily met, earning bachelor’s and master’s degrees. His graduation coincided with a post-civil rights-era boom in aggressive recruitment of people of color, by both corporations and universities. He was able to get a good job and thrive, along with most of his classmates at Henry Ford High School in Detroit.

He’s still doing well; a buyout allowed him to launch his own consulting business, and his children are following their father’s path. But their skies aren’t as sunny as his were.

“I don’t see kids having that same level of opportunity (that our generation did),” he said. “If you don’t have a degree in particular areas, your chances for employment are slim. A bachelor’s doesn’t get you what it used to.”

No, it doesn’t, as thousands of unemployed college graduates could testify.

Michigan often touts itself as the birthplace of the American middle class. That benchmark of economic security never fell entirely evenly across its population, but the good-paying jobs of the 20th century served to lift African Americans, Hispanics and other people of color on the same tide whites enjoyed. And as the middle class has faltered in recent years, their portion has suffered in kind.

In 1975, the median African-American household income stood at 60 percent of white households: $23,691 vs. $39,463. In 2011, however, it had fallen to 58 percent. Hispanic household income was 71 percent of whites’ in 1975, just under 70 percent in 2011.

In an upcoming report for the W.K. Kellogg Foundation, the Altarum Institute studied “The Business Case for Racial Equity” and noted that after adjusting for age and sex, mid-career white males today earn about 30 percent more than people of color.

“The full set of causes for these earnings differentials is unknown, but it clearly includes inequities in health, education, incarceration rates, and employment opportunities – all areas that can be influenced by targeted policies and programs,” the study reported.

And an Urban Institute study released in April showed the gap in wealth is far greater than income, with whites on average holding six times the wealth of African American and Hispanic households. The difference is significant, the study notes: “A home or a car can offer benefits far beyond their cash value. And even a small amount of savings can help families avoid falling into a vicious cycle of debt when a job loss or financial emergency hits.”

Bobby Ramirez can speak to that from experience. The 57-year-old autoworker spent nine years laid off from the Ford Motor Co. in the 1980s. What had looked like a secure middle-class job when he was hired in 1976 evaporated in the early ‘80s recession.

“I worked part-time jobs and had to move in with my mother,” he said. That wasn’t all he did – he got an associate’s degree at Henry Ford Community College and tried to continue at the University of Michigan’s Dearborn campus before dropping out. But it wasn’t until he was called back to Ford in 1988 that his fortunes recovered. It was that union job, the gold standard for the working class, that enabled him to consider himself solidly middle-class again. But he is under no illusions about today’s landscape.

During the auto industry’s restructuring in 2009, “a lot of the middle-class autoworkers retired and took buyouts. Now we have a new group of Latino workers coming in, making $16 an hour, with less benefits.”

That number includes his adult daughter, who, like her father once did, finds herself living under a parent’s roof while she tries to figure out a way forward from a $14-an-hour job with an auto supplier.

What Ramirez believes, along with Vanderburg, is that younger people will have to adapt to a radically different economy if they wish to be successful, one with fewer sure things and murkier career paths. But, both believe, success is absolutely attainable with hard work.

Vanderburg advised his son to study finance at Florida A&M, and “we did have the discussion about majors. He was talking about marketing. That won’t cut it. I told him to choose something with long-term potential. He’s good at math, so he’s in finance.”

Ramirez is counting on 2015 contract negotiations, when – he hopes – the reinvigorated auto industry will at least partly compensate workers for the concessions they granted to ensure its survival. But he’s close to retirement. His hopes are with his daughter; he wants her to stick with her union job but get an education, too.

“Because of the benefits, she can take some classes,” he said. “It’s a much better deal than no union.”

They share a certain optimism with William F. Jones Jr., CEO of Focus: HOPE, the Detroit-based job-training and education center. Jones said that while “clearly there have been tectonic shifts in Michigan,” the opportunity exists to bring at least some manufacturing back from overseas.

“You have to be prepared for jobs that might come back, and those that might be available in 10 years,” he said. Smart training won’t just be for a single job, but rather “will be a path to a career.”

Jones, who is African American, said the loss of secure union work and an overall loss of many government positions, both paths to the middle class for people of color in the past, have taken a toll. As the son of a former postal worker, “I can relate to kids whose backgrounds are modest.” But, he said, 21st-century young people should know that with education and the right mindset, they can still do well.

“They say luck is when preparation meets opportunity,” he said. “When I was a kid, a corporate job was what everyone wanted. Today, you might consider the entrepreneurial route. But it starts with education.”

The stakes are high, not just for people of color. The Altarum Institute study argued that “moving toward racial equity can generate significant economic returns” – for the entire country.

People who reach their full economic potential pay higher taxes, enjoy better health and attain higher levels of education than those who are held back through discrimination and other malign forces, the report concluded: “Minorities make up 37 percent of the working-age population now, but they are projected to grow to 46 percent by 2030, and 55 percent by 2050.” Closing the earnings gap for minorities would increase GDP, federal tax revenues and corporate profits, the study argued.

“We want the work to heal our racial divide to be a multi-sector work,” said Gail Christopher, vice president of program strategy at the Kellogg Foundation. “The business community has to be involved in this work. They have the most to gain from improving outcomes. Not only is it good for individuals, but these great big deficits we’re talking about – it’s a way of framing it in the positive. It’s critical to the future of our country.”

Staff Writer Nancy Nall Derringer has been a writer, editor and teacher in Metro Detroit for seven years, and was a co-founder and editor of GrossePointeToday.com, an early experiment in hyperlocal journalism. Before that, she worked for 20 years in Fort Wayne, Indiana, where she won numerous state and national awards for her work as a columnist for The News-Sentinel.

7 comments from Bridge readers.Add mine!

  1. Michael H.

    I opened this article because the title inflamed me. Part of the divide found in the races is simply how it is framed. Could we not have stated that people of color are on the rise in the fight for equality or would that have been a stretch? The negative view of our cultural problems has a tendency, in itself, to continue to propagate these issues.

    The rise of our culture to equality begins with proper education and proper expectations. College is not an option; it is a requirement. With today’s access to education no person should be allowed to fail. Our society as a whole must make this change but journalism must change it’s tune to encourage rather than discourage.

    Secondarily, places like Focus Hope must continue but our entire economy needs to recognize that training is essential for those outside of the workforce as well as those inside. No person wanting to work should be turned down. If a specialized person cannot be found train one in those skills. This is where the corporate machine should be encouraged.

    The other factors of continued hate and prejudice by our society based on little more than the parents passing their views to the children must be stopped. Our society can be color blind if allowed to do so. When we write articles about the failure of our system instead of its successes we breed continued hopelessness.

    Let us all grow up and realize that our society is what we make of it as a group. My sibling in humankind must by virtue of the fact that they are my sibling be treated without prejudice. We can only accomplish this with a closed eye to physical differences and a stance for encouragement and development of all of humankind. This is the only way to success.

    Should the Bridge truly care about these issues there must be a change. There must be a change toward positive stories and positive developments. Good news is the key to the building of life not bad news. So what will it be Bridge? Can we find what is going well and how it prospers America? If not, we are propelling ourselves into a neverending struggle to show how bad life is.

  2. Charles Richards

    Ms. Derringer misunderstands the world. She says, “Ramirez is counting on 2015 contract negotiations, when – he hopes – the reinvigorated auto industry will at least partly [compensate] workers for the concessions they granted to ensure its survival. The auto companies recovered because the UAW reduced the burden that drove two companies to bankruptcy. I cannot see that even partly reimposing that burden is in the long run interests of anyone.

    She quotes Mr. Vanderburg as saying, “I don’t see kids having that same level of opportunity (that our generation did),” Unfortunately, Mr. Vanderburg is absolutely right. The “middle class” that she claims to have been created by Detroit was very possibly a temporary phenomenon created by the destruction of much of the productive capacity of the rest of the world by World War II. We can no longer sell anything we make for whatever price we like.

    And she is mistaken when she says of the value of a college education, “No, it doesn’t, as thousands of unemployed college graduates could testify” Human capital is our only salvation. It is true that a lot of college graduates are working as baristas, but that is due to individuals following their “passion” and getting degrees that weren’t in demand; the lack of economic growth since the Great Recession also accounts for much of the under employment.

    The Altarum Institute study is correct when it says,”People who reach their full economic potential pay higher taxes, enjoy better health and attain higher levels of education than those who are held back through discrimination and other malign forces.” But the trick is to ensure that no one’s potential is wasted, not just that of minorities. The Economist recently noted that the United States is the only rich country that does not spend more on educating poor students. Doubtless, investing more in primary and secondary education in poor areas would pay dividends. The goal should be to promote the general welfare, not equalize groups.

    There is a good case to be made for rewarding good high school GPAs and SAT test scores with scholarships on a sliding scale, with top achievers being given full scholarships. The state of Georgia has such a program. No doubt the Kellogg Foundation, the Altarum Institute, and the Urban Institute would disapprove because a disproportionate number of scholarships come from wealthier zip codes. But what is our objective? Prevent talent from going to waste, or .penalize successful families and transfer resources to poorer families?

  3. Matt

    One question that seems never to be asked is why are there so few minorities in degree areas that actually have job prospects? History, poly sci, pre law, journalism, education, sports managment, outdoor recreation, communications, public admin and all the other bs degrees/courses are where you find most minority kids at colleges. And it’s not just the rigorousness of courses and schools that keep them away. Ferris is far from our most selective university in admissions. Yet it offers dozens of degrees in subjects from welding, construction management, diesel mechanics and plastics manufacturing … that actually are heavily recruited and lead to middle class and better jobs. And what about minority participation? Almost zipo! Instead of whining about some perceived unfairness answer the question why is this.

    1. Richard McLellan

      Good question from Matt.

      NPR had an excellent story on this subject from the perspective of why many women pick the education that guarantees a second tier career in terms of money. The researcher was a woman who made the decision — going into journalism — and wanted to find out why so many women made similar uneconomic decisions. The causes, of course, were multiple and complex, but I got the sense that there was no one to blame.

      With respect to African Americans, I suspect there are different causes and like it or not, residual (or active) racism in society plays a role. For example, in some well paying jobs Blacks were systematically excluded until recently. I am a generic White Republican, but I believe the title of the article is accurate: “The race to join the middle class: it’s a steeper climb for minorities.”

  4. Nancy Taylor

    I just have to reply to Michael and Charles. Please re-read, slowly, these paragraphs from the story you are commenting on:

    In 1975, the median African-American household income stood at 60 percent of white households: $23,691 vs. $39,463. In 2011, however, it had fallen to 58 percent. Hispanic household income was 71 percent of whites’ in 1975, just under 70 percent in 2011.

    In an upcoming report for the W.K. Kellogg Foundation, the Altarum Institute studied “The Business Case for Racial Equity” and noted that after adjusting for age and sex, mid-career white males today earn about 30 percent more than people of color.

    “The full set of causes for these earnings differentials is unknown, but it clearly includes inequities in health, education, incarceration rates, and employment opportunities – all areas that can be influenced by targeted policies and programs,” the study reported.

    And an Urban Institute study released in April showed the gap in wealth is far greater than income, with whites on average holding six times the wealth of African American and Hispanic households. The difference is significant, the study notes: “A home or a car can offer benefits far beyond their cash value. And even a small amount of savings can help families avoid falling into a vicious cycle of debt when a job loss or financial emergency hits.”

    Our “cultural problems” Michael refers to is called racism and there are no fluffy positive terms to describe it, and our avoidance of calling it that is what is keeping us from changing it. And I suggest Charles become familiar with the term “white privilege”. Since the time when Native Americans watched white people from Europe paddling onto the shores of their homeland (and NOT thinking, ‘illegal immigrants’), white people, or more precisely, white men, have benefited the most from the gifts of this country. And your remarks prove what is often said about the privileged – they are selfish and protective of what they have.

    Again, re-read those paragraphs, slowly. Now tell me why we of the privileged color white should not help our brother and sisters of color get some of the advantages that we have taken for granted for generations?

    1. Jon Blakey

      Well said Nancy, and I could not agree more. Positive news stories will not fix this problem and continued acquiescence to the privileged will continue the “economic gulf” between the races. I would like to read more about programs that are effectively addressing this issue, if any such programs exist. One that is taking root in Michigan is an expansion of preschool education that Ron French has reported on in the past.

      Finally, I need to see empirical data not opinions by partisan think tanks (no offense intended towards the think tanks and foundations quoted in this article) to determine what the truth is. I am totally fed up with think tanks who purport to share “the facts” about the reasons for the wealth and income gap in this country, when all they are actually doing is presenting ideological viewpoints. It’s time to quit blaming the victims.

  5. Duane

    It might help if the history were put into context when it is compared to present day.

    The idea of the ‘middle class’ is about the place and time. the so call birth of the ‘middle class’ was in a time when people and markets weren’t mobile. The manufatures in Mighigan weren’t competing world wide and the organizations were dependent on physical strength and stamina, the employer work was scripted in great detail.
    Today it is a world wide market place, work is more knowledge based, the individual employee is more expected to assess work needs and make their own decisions accordling (supervisors have disappear in numbers and levels).

    The nature of the work isn’t dependent on strength and physical stamina. If people aren’t willing to sacrifice to gain the necessary knowledge to provide value at work then they will not have work. I hear the skill based jobs like welding are being left unfilled here in Michigan for a lack of people willing to learn how to weld.

    Why should we concern ourselves who people are if they are not willing to prepare themselves to do the work avavailable? Are we seeing people turned away from the welding classes because of who they are or is it those people talked about here are choising not to apply themselves to learn the knowledge and skills needed to be ‘middle class?

    At a former employer I saw engineers and scientists from all ethnic groups though the distribution did not reflect the state’s population, but when talking to those people it became apparent that the distribution was even lower at the schools the technical people were graduating from. It would seem the article is talking about a symptom and not the problem.

    The problem maybe that kids particulary and adults too are making choices that prevent or create barriers to their being prepared to get jobs that will put them into the ‘middle class’. Rather than focus on numbers we should be talking about what it takes to achieve the ‘middle class’ and asking why people aren’t making the sacrifices, such as schooling, to get the opportunities to put them into the ‘middle class’. Maybe people shouldn’t be simply going to college and should be asking what they will learn that employer need/want their employees to know.

    As for the ‘unions’ providing the ‘middle class’ jobs, unless the unions/members are helping employers be more compatetive the unoin members will not have jobs. The reality is that just as we try to get the best value for our personal money when we spend it so do employers when they spend money on employeees.

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