Revival

American Demographics, Oct 1, 2003

Byline: William H. Frey

NO TERM IN AMERICA'S SOCIO-CULTURAL VERNACULAR conveys the idiosyncratic identity, psychic resonance, values, vibrancy and symbolism quite like the term "middle class." For decades, the pairing of these two words has simply meant everything American - from plain vanilla mediocrity to the oppressed majority to the very pulse, indomitable spirit and vitality of the nation's most defining households. About 10 percent of America's population controls 90 percent of its wealth and power. In fact, a great deal of the country's past and present persona and ethos, and, inarguably, a critical key to the nation's future as an economic, political, technological and cultural world leader lies in the health and well-being of its middle class.

Here is the first in a series of analyses American Demographics plans to publish in the next six to nine months under the title "America's Money in the Middle." The reports will dissect and drill down into the data, and pan for revelations and insights that can make their way into audience and customer segmentation models, marketing initiatives and models, marketing initiatives and organizational strategies regarding the numbers of America's middle class and what they all mean.

The black middle class represents a significant share of many more markets than in the past, and this has tremendous bearing on the nation's future. The economic boom of the 1990s, the rising professional ranks of African-American Gen Xers and Gen Ys and the dispersion of blacks to growing, prosperous parts of the country - including their return to a revived "New South" - have increased both the numbers and visibility of middle-class blacks. Many are located in familiar African-American settlements, both in and outside of the South. Yet the rising prosperity and mobility of African Americans during the 1990s has taken them to new, and sometimes surprising, destinations.

UPSCALE BLACK LOCATIONS

"MIDDLE CLASS" IS AN AMBIGUOUS PHRASE, even to those who use it to characterize themselves. It is especially tricky when applying household income as the critical yardstick. The 2000 census reveals that a little more than 4 in 10 American households earn in excess of $50,000 per year - an income that reflects middle- class consumption in even the toniest of markets. Because of significant income gains over the past two decades, nationally, nearly 3 in 10 black households have achieved middle- and upper- income status.

The extent to which black households in the "middle and above" income categories cluster into metro areas varies widely. The highest concentrations tend to occur in and around pricey coastal regions in the Northeast and in California, resurgent Southern magnets for middle-class blacks (e.g., Austin, Texas, Atlanta) and emerging magnets for mobile black professionals (e.g., Denver, Phoenix). At the same time, many parts of the country with large settlements of black households, be they Midwest Rust Belt cities (e.g., Cleveland, Milwaukee), or part of the old Southern Black Belt (e.g., Birmingham and Mobile, Ala.), have relatively low shares of higher-income black households.

In four large metro regions, more than half of all black households earn more than $50,000 per year (see chart, "Highest Shares of Middle- and High-Income Blacks"). These include Middlesex, N.J., and Nassau-Suffolk, N.Y., home to many commuting New Yorkers, "The Silicon Valley" (San Jose, Calif.) and Orange County, Calif., - home of suburbanizing Los Angelinos. In fact, 10 of the top 13 metros for well-off blacks are located in the greater New York, San Francisco and Los Angeles regions.

Two exceptions are Washington, D.C., a traditional magnet for blacks in government, and Atlanta, a "rising star" magnet for black professionals in the 1990s. College towns (Ann Arbor, Mich. Colorado Springs, Colo.), and high-tech economy clusters (e.g., Austin, Texas and Boston) also pop up on the radar. Curiously, despite a vibrant Southern economy, only four of the top 20 metros for middle- and high-income blacks are in the South.

RAPIDLY RISING

ALTHOUGH THE SOUTH might be underrepresented among markets with the highest shares of middle- class blacks, Dixie metros are prominent when it comes to rapid growth in both black households and incomes. Three Texas metros - Austin, San Antonio and Dallas - along with Atlanta, lead all others in the growth of black per capita household incomes in the 1990s, among markets that increased their black household populations by more than one-fifth. Other such Southern metros are the Research Triangle hub, Raleigh-Durham-Chapel Hill, N.C., and Fort Lauderdale, Fla.

Other high-fliers are places not typically associated with black middle-class populations (see chart, "Well-Off and Flying High"). Western metros such as Denver, Phoenix, Las Vegas, Portland,Ore. and Colorado Springs, Colo. have increased their total population dramatically over the last decade. Today, they are also attracting droves of middle- and high-income blacks. Additional black population spillover into the Pacific Northwest and more "suburban" interior California metros is being driven by an accelerated out-migration of blacks from large coastal California metros such as San Francisco, Los Angeles and San Jose.