45 years in business and employment; money income increases from $7 billion to $260 billion, but the gap between Black and White Americans keeps getting wider - 45th Anniversary Edition

Ebony, Nov, 1990 by Andrew Brimmer

45 Years in Business and Employment

Money income increases from $7 billion to $260 billion, but the gap between Black and White Americans keeps getting wider

During the last 45 years, Black Americans have faced an uphill climb in the world of economics and business. As a group, Blacks were able to achieve moderate improvement in their overall economic status. However, the gains were uneven, and those least able to compete in the marketplace were left behind.

Job Patterns

Over the last four decades, Blacks strengthened their position in the labor market. They lifted their labor market participation to 13.8 million (equal to 11 percent of the total civilian labor force in 1990). They also held 12.2 million jobs (or 10.3 percent) of the total. Yet, Blacks still suffered a sizable jobs deficit. If they had enjoyed job parity, they would have had 829,000 more jobs than they actually held. The lag in employment resulted in a Black unemployment rate of 10.6 percent--about 2.00 times the jobless rate for all workers and 2.30 times that for Whites. The unemployment rate for Black teenagers was 28.2 percent in 1990, compared with 12.9 percent for White youths.

A number of forces combined to limit the progress Blacks were able to make in the labor market over the last four decades. The persistence of racial discrimination--even after the passage of the Civil Rights Act of 1964--undoubtedly had a negative impact. But the lack of skills also prevented many Blacks from competing for jobs in a marketplace where a premium was placed on technical competence. In contrast, Blacks with education and training made up an increasing share of white collar, technical and professional occupations.

Within the Black community, a number of disparities have become more aggravated. A significant proportion of Black men (especially young adults) have dropped out of the labor force. Many of these apparently are engaged in the underground economy, while many others are incarcerated. The number of unmarried Black women with children has grown much faster than the population generally. Many of them have also withdrawn from the labor force. On balance, however, a much higher proportion of Black women than White women is employed, and they contribute a much greater share of the economic support for Black families.

Trends in Income

The moderate improvement in Black employment has been matched by relative gains in income. For instance, in 1947, Blacks had $7.2 billion in money income, equal to 4.90 percent of the total. In the same year, Blacks made up 9 percent of the civilian labor force. If they had enjoyed income parity, they would have received an additional $6 billion. This represents an income deficit of 46.2 percent. In 1989, Blacks' money income amounted to $260.3 billion, equal to 7.57 percent of all income in the country. Their share of the civilian labor force was 10.9 percent. Thus, if they had received the same fraction of total income, they would have gotten an additional $114.5 billion. So, Blacks' income deficit amounted to 30.5 percent last year.

The distribution of income within the Black community has shown the same kind of deepening schism evident in the case of employment. Those at the bottom of the scale--with few marketable skills--have gotten a smaller share of income, while those at the top--with greater capacity to compete in the marketplace--have gotten a larger share. For example, in 1947, the lowest one-fifth of Black families got 4.8 percent of total income and the highest one-fifth got 45.8 percent. In 1988, the lowest one-fifth received 3.3 percent of total income, and 47.9 percent went to the highest one-fifth of all Black families. This deterioration in income distribution among Blacks was worse than that which occurred among Whites or among all families in the country at large.

The schism within the Black community is also evident in the persistent ranks of the poor. In 1959, 18.5 percent of all families in the nation had incomes below the official poverty line drawn by the federal government. Among Whites, the proportion was 15.2 percent, and for Blacks it was 48.1 percent. By 1988, the poverty rate among all families had decreased to 10.4 percent and to 7.6 percent among Whites. In sharp contrast, the proportion among Blacks had decreased only to 28.0 percent. Again, the Black experience reflects the worsening situation among poor Black women.

The relatively greater support which working Black women provide to Black families also shows up in the income figures. For example, in 1986, among Black couples in which the wife worked, the woman contributed 47.5 percent of total family income. Among comparable White families, the wife's income made up 32.2 percent of the total.

Wealth in the Black Community

Over the last four decades, as Blacks' incomes have increased, they have been able to raise their saving rate to the point where it is nearly equal to that of Whites (9.6 percent for Blacks vs. 10.9 percent for Whites). The wider margin of saving has made it possible for Blacks to add to their accumulation of assets. Nevertheless, Blacks' share of wealth remains considerably below their share of income.