What Happened to the Black Middle Class?

Compiled by the DiversityInc staff
© 2006 DiversityInc.com®
July 28, 2006

The middle class is disappearing, and fast. A recent Brookings Institution report shows communities are rapidly segregating by income, and middle-class neighborhoods are disintegrating at nearly three times the rate of middle-class families. Who bears the consequences of the ever-expanding wealth gap?

The answer is people of color, most of whom are blacks, according to NPR's News & Notes with Ed Gordon this week.

"We often think about class when we think about income, but think of wealth and there's a huge gap," Mary Patilllo, associate professor of sociology and African-American studies at Northwestern University, said on the show. "For every dollar whites make in network, blacks make 10 cents. They have meager wealth holdings so there's a particular type of fragility."

In 1970, middle-income neighborhoods comprised 58 percent of all metropolitan neighborhoods. In 2000, they accounted for 41 percent—a steep downgrade for what was formerly the most stable component of the national income distribution. 

So where are they going? Middle-class neighborhoods are vanishing faster in metropolitan areas than in suburbia, and the 30-year trend suggests families are congregating in areas that fit their economic profiles.

Not surprisingly, access to public services, resources, employment and social networks diminishes along with those who provide it. But not all people of color are sinking into the lower-income bracket. Many are driven to the outskirts of the higher-income neighborhoods, where, as Gordon said, they're holding on by their fingernails.

This study comes on the heels of a Brookings report that exposed the devastating implications of predatory lending in urban communities: hidden taxes for those without the financial literacy to know the difference, a fine for being poor that amounts to hundreds if not thousands of dollars a year. But a look at the demographic profile of these areas shows it's not just a tax on the poor. (See also: Predatory Lending Hurts People of Color Most)

Cities without inclusive representation across income levels, particularly the middle class, lack the stepping stones crucial to economic mobility. When higher-income groups move out of urban communities, they take their resources with them. 

"What about the burgeoning black middle class trying to build wealth and solidify for future generations? Opportunities for groups to move up the economic ladder, especially blacks, are structured by residential location," George Galster, professor of urban affairs at Wayne State, said on NPR. "They need access to things we know are crucial aspects of social mobility, such as a healthy environment, recreational opportunities free from psychical and psychological harm associated with violent neighborhoods, where they go to high-quality schools, places that are increasingly differentiated depending on where one lives and what one's current incomes are."

Neighborhoods that mirror the geographic segregation this nation experienced during the 1960s invite a complementary mindset. This has debilitating repercussions.

"People tend to reduce stereotypes when they're able to live together as neighbors. Neighborhoods representing one income group see polarization of attitudes and stereotypes among socioeconomic groups," added Galster. "With segregation, economic opportunity becomes increasingly difficult."

In the long run, this doesn't help anyone. Stifling opportunity deprives businesses of the talent pool they need to combat global competition. Aside from the employment prospects, companies deny themselves a sizeable population of potential consumers. If communities don't have the money to spend, businesses can't stay afloat. This is a prime reason large corporations, venture capitalists, start-up businesses, banks and other public-services companies avoid poor metropolitan areas, but it also may be the single most important reason why they need to be there—to stimulate growth, improve access and help these communities get off the ground.