Recession Threatens To Stagnate Black Middle Class

The U.S. Dept. of Labor Department reports that 467,000 jobs were lost in June, far more than expected. The numbers also reflect how the recession could erase financial gains made by African-Americans, particularly in the 1990s. Personal finance contributor Alvin Hall and New York Times magazine writer Jonathan Mahler discuss the concern.

Copyright © 2009 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

MICHEL MARTIN, host:

I'm Michel Martin, and this is TELL ME MORE from NPR News.

We're going to spend some time today talking about the economy, how the recession is affecting particular groups. In a few minutes, we'll discuss the ethnic media, with a particular focus on black media. For decades, African-Americans could find their best selves reflected in the pages of black newspapers and magazines. So, with readership still high, why are some of the most popular ethnic publications in serious financial trouble? We'll ask a panel of media watchers in just a few minutes.

But first, yet more disappointment on the employment front. More jobs were cut in June than expected, about 467,000. That was more than the 322,000 jobs lost in May, and the first time in four months that the number of jobs lost rose from the previous month. With the unemployment rate now at 9.5 percent, a growing number of Americans are wondering when they'll see an economic recovery.

But those concerns are even greater for African-Americans, who now face an unemployment rate closer to 15 percent. It's part of a disturbing trend in the black community, which is seeing generations of economic progress slip away and more families being pushed out of the middle class. That crisis was documented in a 2008 report from the Economic Policy Institute that explored how economic gains that African-Americans made in the 1990s have slowly eroded.

So why are African-Americans not just losing jobs, but wealth? We decided to ask Alvin Hall, TELL ME MORE's regular contributor on matters of the economy and personal finance. Also with us is Jonathan Mahler. He's a writer for the New York Times Magazine, and he recently profiled a black family in Detroit that's trying to stay in the middle class despite the meltdown in the auto industry. I welcome you both. Thank you so much for joining us.

ALVIN HALL: My pleasure.

Mr. JONATHAN MAHLER (Writer, New York Times Magazine): Glad to be here.

MARTIN: Alvin, let me start with you. This report from the Economic Policy Institute stated that, quote, on all major economic indicators, which can include income, wages, employment and poverty, African-Americans are worse off than at the beginning of the decade. Why is that happening? And why is the effect so pronounced - so much more pronounced among African-Americans than it has been among whites - who are also, it has to be said, feeling the pain?

HALL: I think it's a legacy of what happened in the '50s and the '60s. When we weren't able to get jobs and get on the ladder early on, we were handicapped. So this is, in many ways, the first generation of African-Americans who've been able to buy their homes, get jobs, have access to the credit markets, but we didn't have enough money to put down. We didn't have - we didn't understand how these markets actually work.

So when the economy starts to go down, we're affected because we're often living closest from paycheck to paycheck. Those statistics in that report were really devastating for certain groups. You saw that single homes headed by African-American males were down huge amounts. I think it was 9.3 percent in terms of income. Single females were also down. The only couple - the only group that remained relatively stable were married couples, but even they were down.

MARTIN: Are there specifics - is part of it that African-Americans are clustered in specific sectors of the economy that tend to be more vulnerable or who have suffered more from this particular recession, or are there other factors? What I'm asking is, is it the employment side that's the main issue or is it the - for want of a better term, the asset allocation side?

HALL: I think it's the employment side. The jobs that were available to us when we did make the great migration north were in manufacturing, primarily the automobile industry and other types of manufacturing jobs. They have been hit very hard, first by the movement of jobs outside of America, and then by this huge economic downturn.

The number of us who had access to jobs in those areas like investment banking -or in simple, straight commercial banking - were very, very limited in reality. And so I think that influenced it more than asset allocation. We never actually had the amount of money to create a broad asset-allocation plan. For most African-Americans, myself included, the major way to wealth was to buy your home. But to come up with the amount of money so that you got the best mortgage, the best deal, was very difficult.

MARTIN: Jonathan Mahler, you talked about the job picture with a particular family in Detroit. Both father and son worked in auto-assembly lines, and you talked not just about their work but what the work meant to them, and what it meant to them to do that work, and what it meant for their whole family. So obviously, you wrote a whole piece about this. So we can ask you to encapsulate the whole thing in just a minute, but tell us a little bit about why you chose this family.

Mr. MAHLER: Sure. I mean, I think I was in a sense trying to illustrate, I think, that - the idea that, you know, we have - I think, you know, I focused in particular, obviously, on the auto industry. And I think, you know, my sense going in was that, you know, we have this image of the - kind of the classic auto worker. And I think he tends to be a white, working class guy, lives in suburban Detroit, hangs out in the union hall, goes bowling, maybe has a hunting lodge that he goes to on weekends up in the Upper Peninsula.

And, you know, in reality, something on the order of 20, 25 percent of all auto workers actually are African-American. And not only that, but the auto industry - Alvin was talking before about the black migration - and the auto industry, you know, played sort of a critical role in providing jobs to African-Americans who came north during over the course of the 1950s and '60s and really, even into the '70s.

And so what I wanted to capture was that this whole - kind of way of life and this whole kind of critical piece of, I think, the rise of the African-American middle class is kind of slipping away with the death of the auto industry. And I think it's something that, you know, people hadn't really looked at that aspect of it, that kind of consequence, very serious consequence of the fall of the big three.

MARTIN: If you're just joining us, this is TELL ME MORE from NPR News. We're talking about the recession. We're talking about the particular affect on the African-American middle class, and we're speaking with Alvin Hall. He's our regular contributor on matters of the economy and personal finance. We're also talking with New York Times writer Jonathan Mahler about a piece he did profiling two generations of a black family in Detroit, and how they're being affected by the ongoing turmoil in the auto industry. Jonathan, here is a line from your piece. We've been hearing this phrase, the death of Detroit, for years now, but this is what it's going to look like, how it's going to play out. There's a perverse paradox here, one that I was reminded of every time I met a black autoworker in an Obama T-shirt or with an Obama bumper sticker adorning his or her car.

We've just elected our first African-American president and yet, at the same moment, a city and industry that together played a central role in the rise of the black middle class that made possible lives like Marvin Powell's(ph) is being destroyed. And Alvin, I wanted to ask whether you feel that there is any - do you feel that this is - and I'm asking for an opinion here. Is there an acknowledgement, is there a sense of just how serious this erosion of progress is in the African-American community?

HALL: I think in the African-American community, absolutely. We can feel it among people we know, among the children of people who built their lives in Detroit and in those industries, sent their kids off to school. And now, those kids are seeing their parents struggle to hold on to the little gains they have. But what's more interesting for me is that I think there isn't an acknowledgement about this among the broader American public.

I was with three friends having dinner on the day Jonathan's article came out. And they could not read the article, and I thought this was curious. They said, I don't see why they're writing this type of article. All that happens is that black people have moved up now. So the next generation will come in and take their jobs because they're now earning more money. I said, did you really read that article about what's happening in Detroit? Some people want to believe that the American dream has been fulfilled; therefore, black people have enough money, we have enough job security to be sustained in this economic downturn.

MARTIN: Jonathan, one of the questions I had for you, though, was how much of the circumstances that these communities are experiencing are structural? And how much are personal decisions? You talked about the fact that, for example, the younger Mr. Powell had other aspirations than working in the auto industry. He didn't pursue them.

Mr. MAHLER: That's right, he did but, you know, at the same time, I mean I think he always - living in Detroit, he always believed and always assumed that the auto industry was there. And, you know, just to sort of also to speak to what Alvin was saying before, I mean, I think, you know, one of the things that I just found so striking and tragic in a sense is that, you know, here this sort of two generational family.

Marvin's father - Marvin's parents live in the city of Detroit, in a neighborhood that when they moved into it in the 1960s was a very nice, stable, working class neighborhood - which has gone downhill so rapidly now that they probably couldn't sell their house if they wanted to. And if they could, the last house that sold in their neighborhood went for $5,000.

MARTIN: $5,000.

Mr. MAHLER: $5000. Meanwhile…

MARTIN: …which is probably less than what they paid for it.

Mr. MAHLER: …that was - yes, they paid $25,000 for it in 1968. So it's - in 40 years has lost most of its value. Meanwhile, Marvin managed to move out to the suburbs to, you know, a nice, working class, suburban subdivision just outside the city. But if he loses his job at GM, which might very well happen - in fact, it's probably, one could say, likely to happen at this point - he's going to have a hard time, probably an impossible time paying his mortgage. And what he may very well end up doing is moving back to his parents' house in the city of Detroit.

So, it's this kind of sort of downward mobility, I think, that just sort of underscores how serious this issue is. And just in terms of the numbers, I mean, we talked before - you mentioned briefly the African-American unemployment statistics. Well, in the state of Michigan, African-American unemployment is already at 20 percent. And it's expected to go up close to 30 percent - something like 28 percent - by the middle of next year. So anyone who is sort of inclined to sort of underestimate the seriousness of this issue, you know, need only look at those numbers.

MARTIN: Alvin, we only have about a minute and a half left. Some economists are warning that we could be facing a jobless recovery. What does that mean?

HALL: That means that basically, the stock market would rise up, showing that these businesses are doing well. The businesses would start to improve. But there would not be a move to hire new people at a rate that would reduce unemployment. Instead, the economy would get better, but all of these jobs in manufacturing and these jobs in these sectors that have been hard hit, they would never come back. So, there would be all these people being retrained, all these people still unemployed, but the economy would get better.

MARTIN: And Jonathan…

HALL: It would be very difficult.

MARTIN: …and Jonathan, finally with just the 50 seconds we have left. The Obama administration has talked a lot about retraining, as Alvin was discussing, and also talking about green jobs…

Mr. MAHLER: Mm-hmm.

MARTIN: …as a solution for manufacturing workers who've lost these jobs. Do the Powells, do the people you covered, see this as a solution? Do you think this is viable in Detroit? Is it seen as a realistic answer?

Mr. MAHLER: I have to say it's not really on the radar there yet. I mean, you know, that GM is in fact, you know, working on this car, the Volt, which is, you know, a hybrid vehicle that is - some people see as the possible future of the U.S. auto industry or at least an important part of it. And at this point it's something, you know, if you talk to people out there in Detroit who actually work on the line, to them it seems sort of unrealistic, and not likely to be something they're going to put their faith in at this point.

MARTIN: Jonathan Mahler is a contributing writer for the New York Times Magazine. He was kind enough to join us from his home office in Brooklyn. Alvin Hall is our regular contributor on matters of the economy and personal finance. And he joined us from our New York bureau. Gentlemen, thank you both so much.

HALL: My pleasure.

Mr. MAHLER: You're welcome.

(Soundbite of music)

MARTIN: You're listening to TELL ME MORE from NPR News. I'm Michel Martin. Please stay with us.

Copyright © 2009 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.