The Rev. Jesse Jackson scolded Democrats, seeking their party’s presidential nomination, for not giving the urban agenda any priority, in his syndicated newspaper column Tuesday. "The Democratic candidates -- with the exception of John Edwards, who opened his campaign in New Orleans' Ninth Ward and has made addressing poverty central to his campaign -- have virtually ignored the plight of African Americans in this country,” Jackson wrote.
It is a mystery why Barack Obama, Hillary Clinton and the second-and-third-tier bidders for the Democratic nomination apparently believe the African American economy isn’t worth at least a little lip service. We know how bad the economy is for poor black folks but it looks like it’s now the black middle class’s turn: a double dose of depressing news from two recent economic reports indicate as much.
One study revealed that the black middle class is downwardly mobile. African American children are making less money than their middle class parents did a generation ago. The other, a survey released last month, indicated that many blacks making $50,000 a year or more need a little know-how on putting their money to work for them.
Both reports can be summed up with this one message: When it comes to wealth, white folks are still ahead.
"Startlingly, almost half (45 percent) of black children whose parents were solidly middle class end up falling to the bottom of the income distribution, compared to only 16 percent of white children," a Pew Charitable Trust Study recently reported. "Achieving middle-income status does not appear to protect black children from future economic adversity the same way it protects white children."
Middle class African American children, born in the Black Power Movement days of the late 1960s, are less likely to bring home as many greenbacks as their middle class parents did. Odds are those white middle class children from that same era and same economic background will do better. While only 31 percent of black middle class children will make more money than their parents, 68 percent of white middle class children will.
This three steps forward, two steps back, money march for black America should be anything but startling. The black nuclear family has fallen into the one-in-four range, while the baby's daddy syndrome has become all too common. Euro-American parents, advantaged by white privilege, have more wealth than African-American parents, who are encumbered by racism. White salaries outpace black ones. Homes in white communities are assessed at higher values than identical homes in black communities. And whites are more financially literate than blacks.
A black paper, released last month by Chicago-based Ariel Capital Management, the nation's largest black-owned mutual fund company, and Charles Schwab Corp., a San Francisco-based provider of brokerage and retirement plans, notes that whites are much more savvy than blacks when it comes to money. When African Americans actually accept the pay-yourself-first rule of thumb, they are either unable or unwilling to follow it as well as they should. Blacks making $50,000 annually or more save an average of $182 a month, while whites with matching income save an average of $261 a month. The bottom line: The overall value of savings and investments for whites is an average of $100,000 but only $48,000 for blacks.
Ariel and Schwab, who have been looking at the investment habits of blacks and whites earning more than $50,000 annually for the past 10 years, report that African American participation in the stock market is the same now as it was in 1998. Back then it was 57 percent of blacks and 81 percent of whites. Last month's survey found that 57 percent of blacks and 76 percent of whites reported that they owned stock mutual funds or individual stocks.
In addition to investing in a greater percentage, whites also start investing in their 30s, no matter what they make. Many blacks think they have to wait until they're bringing in a six-figure income.
That contributes to the black middle class marking time while whites surge ahead. John W. Rogers, Jr., Ariel's CEO, said he thought the difference in approach was cultural: "You learn about investing money when you have money to invest."
And if those who-would-be-president don’t think the African American economy merits serious discussion, then more and more blacks won’t be learning about money.
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