Middle Class Gains, Poor Struggle


HAS a rising tide lifted all boats - including those belonging to blacks? That was one expectation behind Reaganomics. The encouragement of free enterprise through tax reform and reduced regulation would so stimulate business activity that it would provide sufficient good jobs to float blacks as well as whites on a sea of prosperity.

According to David Swinton, business school dean at Jackson State University, the economic strategy failed. ``The 1980s will be recorded as a decade during which progress toward racial equality in economic life for black Americans as a group came to a grinding halt,'' he writes in ``The State of Black America, 1990,'' published this week by the National Urban League.

Using government data, Dr. Swinton notes that the per capita annual income of blacks in constant 1988 dollars rose from $5,699 in 1970 to $7,319 in 1978 to $8,271 in 1988. Average per capita black income was 55.7 percent of that of whites in 1970, 59.3 percent in 1978, and 59.5 percent in 1988 - virtually no change.

The situation appears even worse looking at median family income. Black families on average had 61.3 percent of the income of white families in 1970, 59.2 percent in 1978, and 57 percent in 1988. This decline reflects in part a reduction in average family size as a result of lower birthrates, high divorce rates, and more single mothers.

Other economists point to a more complex picture. For instance, Ronald Mincy, an economist at the Urban Institute, finds such overall statistics not too useful because of the bipolarization of the black community. Families with two working parents have made considerable economic progress. Those with only a single parent - mostly women - are doing poorly.

Poor blacks are making their homes in inner cities. Mr. Mincy counted 270 neighborhoods in 1970 in the United States with extremely high proportions of female-headed families, high school dropouts, unemployed males, and welfare cases. These areas had a population of 752,000. By 1980, areas with these characteristics numbered 800 and had a population of 2.5 million. Mincy suspects the 1990 census will show even more such areas.

Middle-class blacks, taking advantage of improved educational opportunities and reduced discrimination, have climbed the economic ladder. Inner-city blacks, troubled by drugs, violence, and crime, have probably become even poorer.

One factor working against black economic progress was the increasing income disparity in the past decade between incomes of those with a college education and those with high school graduation or less. Taking account of inflation, the income of the latter has gone down for both whites and blacks. Blacks, with a smaller proportion of college graduates, were hit hardest.

Another element hurting blacks has been the entry of white women into the labor force in far greater numbers, one study found. Employers have preferred to hire them for many jobs over black men. The decline in manufacturing jobs in the 1980s has also hit blacks because of their disproportionate occupation of these jobs.

As a result of such factors, the black unemployment rate - eight years into an economic expansion - remained at 11.8 percent last month, compared with 4.6 percent for whites. The black poverty rate (see chart) stood at 31.6 percent in 1988, down only modestly from 35.7 percent in 1983 right after a serious recession.

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