IV. FAMILY INCOME
The average family incomes of African Americans have increased significantly over the last 40 years. Describing the economic status of the black middle-class in the 1950s, E. Franklin Frazier wrote:
In 1949, the median income of Negro families in the United States was $1,665, or 51 percent of the median income of white families, which was $3,232. Only 16 percent of the Negro families as compared to 55 percent of the white families had incomes of $3,000 or more . . . . For the country as a whole, the incomes of members of the black bourgeoisie range from between $2,000 and $2,500 and upward. The majority of their incomes do not amount to as much as $4,000. In fact, scarcely more than one percent of all the Negroes in the country have an income amounting to $4,000 and only one-half of one percent of them has an income of $5,000 or more.
The data provides ample proof of a growing black middle-class after the late 1960s. For the purposes of this Article, black families were divided into three income groups based on constant 2009 dollars. For purposes of this study, the lower-income group consisted of families with incomes under $49,999, which was $10,089 less than or 83% of the national median. The moderate-income group consisted of families with annual incomes between $50,000 and $99,999. The upper-income group included families with annual incomes above $100,000.
In 1970, the proportion of black families in the lower income category was 76%; by 2009, this had declined to 61% as shown in Graph 3. Since 1970, the proportion of black families in the lower-income category has declined by an average of 5.3% per decade with the exception of the 2000s. The greatest decline in the percent of blacks in the lower-income group occurred during the 1990s, when there was an 8% drop in the percent of blacks in the lower-income group. Despite the overall decline in the percentage of blacks in the lower-income group since the 1970s, between 2000 and 2009, the proportion of blacks in the lower-income category increased by 3% points.
Graph 3
Distribution of Black Families by Income: 1970-2009
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
Source: U.S. Census Bureau, Families by Total Money Income, Race, and Hispanic Origin of Householder: 1967 to 2009 tbl. F-23 (2010), available at http://www.census.gov/hhes/www/income/data/historical/families/2010/F23_ 2010.xls
The change in the proportion of black families in the moderate-income category between 1970 and 2009 was not as great as the changes among black families in the lower- and upper-income groups. In 1970, only 22% of black families were in the moderate-income group. By 2009, the proportion of families in the moderate-income group had increased to 27%. Since 1970, the proportion of black families in the middle-income group increased by roughly 3 percent per decade. However, since 2000, the proportion of black families in the moderate-income group declined by 2% from 29 to 27%.
In 1970, only 2.4% of the black families were in the higher-income category. By 2009, the proportion of black families in this category had increased to 12.1%. The largest increase in the proportion of blacks in the upper income category occurred during the 1980s and 1990s. During the 1980s, the proportion of black families in the upper-income category rose by 3.6%. Throughout the 1990s, the percentage of blacks in the upper-income category rose by 4.6%. However, the 2000s witnessed a decrease of 0.6% (or no significant change) in the amount of blacks in the upper-income category.
Thus, since 1970, there has been a steady expansion in the proportion of black families in the upper-income category (up by 9.7%) and a substantial decrease in the proportion of black families in the lower-income group (down by 15%). The percentage of black families in the moderate income category has changed by only 5 percentage points since the 1970s. Nevertheless, in spite of significant improvements in the percent of blacks in the moderate- and upper-income group and the decline in the percentage in the lower-income group, over half of black families still have annual incomes that are less than $50,000. While the proportion of blacks in the moderate- and upper-income groups increased steadily between the 1980s and 1990s, these changes appeared to have leveled off for all three groups during the 2000s.
If we combine the moderate- and upper-income groups to garner an estimate of the proportion of the black population that would represent the middle-class group, we would see that there has been a significant expansion in the size of this group as shown in Graph 4. During the 1970s, the estimated proportion of families in this group increased by 4.9%. During the decade of the 1980s, it increased by 5.1% and by another 7.3% during the 1990s. However, during the 2000s, the estimated proportional size of the black families in the middle-class decreased by 2.6%.
Graph 4
Proportion of Families with Incomes Above $50,000 by Race: 1970-2009
Source: U.S. Census Bureau, Families by Total Money Income, Race, and Hispanic Origin of Householder: 1967 to 2009 tbl. F-23 (2010), available at http://www.census.gov/hhes/www/income/data/historical/families/2010/F23_ 2010.xls
In spite of significant improvements, the median income of black families is still less than two-thirds the income of white families. In 1970, the median income for black families was $29,921 (in constant 2009 dollars) compared to $48,777 for white families. By 2009, the median income for black families had increased to $38,409 compared to $62,545 for white families. This meant that, in 1970 and 2009, for every one dollar earned by a white family, a black family earned sixty-one cents. In essence, there has been no measurable change in the black/white income ratio since 1970. The black family/white family income ratio did get as small as 0.64 (or to put it another way, the average black family earned 64 cents for every dollar earned by the average white family) in 2000.
Despite a significant rise in the proportion of black families in the moderate- and upper-income groups, the proportion of black families in these income groups in 2009 was still more than twenty percentage points smaller than that of white families as shown in Graph 4. However, it should be noted that between 1970 and 2000, the proportion of black families in the middle-to upper-income groups increased at a faster rate than the proportion of white families. During this 30-year period, the proportion of white families in the middle-income group increased by 13.8%, while the percentage of black families in this group grew by 17.3%.
During the 2000s, both percentages of black and white families in the moderate- and upper-income groups have declined roughly 2%. Nevertheless, according to a PEW Research Center Report, the median wealth of white households was 20 times that of black households, and this was the largest gap between the two groups in over 25 years. Some of the income and wealth disparities between blacks and whites can be attributed to the high proportion of blacks clustered into lower-level white collar occupations (such as sales and clerical), while middle-class whites tend to be evenly split between higher level occupations (professionals and managers) and lower level jobs. Another socioeconomic reality that impedes the wealth development of middle-class blacks is their relationships with family and friends. A large proportion of the black middle-class is first or second generation. They are more likely to have grown up poor and are likely to have siblings or other family members and friends who are poor. Middle-class blacks are more likely to provide financial assistance to their relatives which interferes with their wealth accumulation.
