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Black Pay Declines in Reversal of ’90s

Philadelphia Tribune, News Report, Terry E. Johnson Posted: Aug 03, 2009

It is not that Lester Williams notices every statistical change that occurs in world’s largest economy. But the ripple effects caused by those changes are what turn into frightening financial tsunamis for Williams and his family.

He’s watched wave after wave of economic bad news wash over and undermine his family’s stability.

When the nation’s manufacturing base dried up, Williams lost his job at a steel plant in Conshohocken. The next job he found paid $15-an-hour less than his previous gig.

But the real measure of hope for Williams is his son’s life. An only child and high school graduate like Williams, the only jobs the 28-year-old has found since graduating from high school generally pay less than half of what Williams made at the same age.

Williams is scared to death for his son’s future.

“I ain’t given him nothin’ but tough love,” said Williams. “I told him that he’ll only eat if he works hard. He has.

“But if he can’t make more money, he won’t be able to feed nobody but himself,” said Williams. “He got a family, but he cannot afford a family. He tryin’ to fed two kids and a girlfriend and she ain’t workin.’”

In a recent weekly economic snapshot, the Economic Policy Institute (EPI) shows that African Americans are the only group of workers who have seen their wages go down during the recession.

This comes at a time of rapidly increasing amounts of debt, high job losses, skyrocketing gas and food prices and a tidal wave of foreclosures. From the beginning, Hispanic and African-American households were the most vulnerable.

The EPI report found that from the first quarter of 2007 to the first quarter of 2009, Black workers 25 to 54 years old experienced a 3.7 percent decline, or a $23 drop, in median weekly wages. Conversely, whites and Latinos experienced increases, with Asians seeing the largest gains, 5.5 percent, in median weekly wages over the same period.

“One factor that’s probably at work is a significant decline in the amount of hours Blacks are working,” says Algernon Austin, a sociologist at the EPI who conducted the research. Austin says that while all racial groups may experience a reduction in hours worked, Blacks may be affected disproportionately.

“Across many industries we see job losses, and across all education levels we see high rates of job losses,” he said. “Even Blacks who are relatively high earners are probably seeing a reduction in the number of hours worked.

“If these trends continue, Blacks will likely lead in the percentage-point increase in poverty caused by the recession,” Austin said.

Even before the recession settled in, Black workers were facing tough obstacles. One study found that 33.3 percent of African-American workers and 39.3 of Hispanic workers earn poverty wages.

Some blame part of the problem on the decline in unionized workers. For a while in the 1980s, one out of every four Black workers was a union member; now it is closer to one in seven. This loss of better-paying jobs helps to explain why Blacks are doing worse than any other group in the current recovery.

Some African-American activists fault union leaders for failing to target Black workers in their organizing efforts.

Austin predicted that unemployment would continue to rise at least into the second quarter of 2010.

African Americans consistently have historically had and continue to have the highest unemployment rate.

African Americans are feeling the pain in almost all segments of the economy. Black workers in transportation, retail, wholesale, insurance, manufacturing and real estate are bleeding dollars.

“I’m not going to lie to you, during the real estate boom or subprime mess — call it what you want — I made a lot of money,” said one former real estate agent who chose to remain anonymous. “People got into houses, Black real estate agents made money to feed their kids and take long overdue vacations and everything was singing.

“But now, I’m hurting,” she added. “I’m looking under every pillow, rock and staring at the sidewalk to find dimes, nickels and quarters. That is how bad things are.”

If parents are suffering as a result of declining wages, their children are far more likely to suffer even more in the future.

“Children who are raised in poverty are more likely to do poorly in school and more likely to be involved in crime,” Austin says. “Over the long run, they’re much less productive in society as a whole.”

“Finding a job is almost impossible,” said Lewis Anderson, a student at the Career and Academic Development Institute. “Although most of them are not doing it ‘for real, for real,’ you hear a lot of young people talking about trappin’ (selling drugs) as their imaginary way of making money.”

Low wages also translate into less wealth and wealth is the best measure of economic well-being.

A recent Federal Reserve report showed that in 2007 the net worth of the typical African-American family was only 10 percent of the net worth of the typical white family — down from 12 percent from 2004.

Look at it this way: Black folks had 12 cents of wealth for every $1 of wealth owned by white Americans.

African Americans’ median income declined by an average of 1.3 percent per year from 2000 to 2006, after having risen by an average of 2.2 percent per year in the 1990s. From 1990 to 2000, African Americans’ median income rose dramatically from $27,929 to $34,735 (in 2006 dollars). But this number actually declined from $34,735 in 2000 to $32,132 in 2006.

While there is no quick fix, Austin says a rapid creation of jobs is likely to help reverse the trend. “If we can reverse the unemployment trend rapidly for Blacks, there’s a chance you would also reverse the wage trend.”

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