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Can the black middle class be saved?

Lee A. Daniels

A new report from the Pew Research Center underscores an alarming question: Can Black America’s middle class be saved?

I don’t mean the small class of wealthy and upper-middle class black Americans who earn hefty salaries and whose net-worth runs into the millions of dollars. In today’s more open American society, they’ll do fine economically. I mean that considerable number of blacks who earn five-figure to low six-figure salaries and whose wealth, if they are homeowners, consists almost entirely of the value of that property.

Will they survive? And if many of them don’t, what will that mean for Black America as a whole?

That question has been hanging like a thundercloud over the American horizon ever since the recession of 2001 undermined a bright promise of the prosperity the country enjoyed during the 1990s: that significant numbers of black Americans were finally gaining a secure foothold in the middle class.

Blacks as a group never recovered from that recession, and the subprime housing crisis and the Great Recession that gripped the country just before President Obama won the White House made matters much, much worse.

That was so for many, many Americans, of course — in part because the fierce economic shock intensified the income inequality that had actually been shadowing the economy for decades. The Pew report’s title makes the larger point in stark terms — “The American Middle Class Is Losing Ground: No longer the majority and falling behind financially,” it declares.

That’s bad for America because it’s middle class consumers, not the rich, who are the bedrock of the American economy. And it’s bad news for the black middle class because it has always fared far worse than whites in economic downturns.

The report’s data and statistics from other sources confirm that notion’s validity. (Using a three-person household as the standard, the study defines the middle-income range as stretching from $42,000 to $126,000 annually, with lower-income and upper-income households below and above that range, respectively.)

It found that for the first time in nearly a half-century middle-income Americans no longer comprise the majority of the population. Instead, they now comprise 49.9 percent of the three broad income groups.

That may seem a minor point. But, for one thing, middle-income Americans have been steadily losing ground ­— as income inequality has been increasing — since 1971, when they made up 61 percent of the population. For another, not only have both the lower-income and the upper-income sectors grown in population but the growth in each of them has been concentrated at the furthest extremes of their boundaries — where the poorest of the poor and the very richest of the rich reside.

The upper-income sector has experienced the most growth; it now makes up 21 percent of the population. But even more important is the growing concentration of both income and wealth at the very top of the society. Upper-income households took in nearly half the total income of all households last year. Middle-income households gained 43 percent of the total income and lower-income households took just 9 percent.

Finally, since 1983, only upper-income households recorded “notable gains” in wealth, widening the wealth gap between that sector and other Americans.

It’s no coincidence that the wealth gap between blacks and whites also has increased during that time. The economic pressure besieging the black middle-income sector has been the more severe because it’s exacerbated by the persistence of racial discrimination in the job, housing and education markets.

Among other things, that means the black unemployment rate (currently at 9.4 percent) is consistently close to twice the national average (5.0 percent); some companies remain largely closed to blacks, especially in terms of more prestigious, better-paying positions; blacks still encounter substantial discrimination in both the rental and homeownership markets, and pay more than whites for the housing they get; and the persistence of discrimination limits their ability to raise capital for starting or expanding businesses they own.

America’s strength as a — true, flawed — democracy always has rested on the role of its middle class as a bulwark of social stability and engine of equality. That’s the role a sizable black middle class could be expected to play as well for blacks as a group and the entire society.

That’s why the final answer to the question — can the black middle class be saved? — is so vital to black Americans and America as a whole.

Lee A. Daniels’ collection of columns, “Race Forward: Facing America’s Racial Divide in 2014,” is available at www.amazon.com.