Black MBA - Fall 2008 - (Page 32)

FEATURE Is the Middle Class Disappearing? states. “Benefits such as these could be combined with traditional social services to reverse decades of slippage in African-American economic vitality.” POLICY PRESCRIPTIONS Policy efforts from boosting homeownership and savings rates to expanding educational access sound good, but new economic realities pose significant challenges. Predatory lending is systematically stripping tens of thousands of Black households of home equity, their primary source of wealth. And lenders are running scared as fallout from the subprime mortgage debacle continues to ripple through the economy, making it even harder for families to buy regardless of creditworthiness. In the meantime, the cost of a college education is skyrocketing at three to four times the rate of inflation. Roderick Harrison, a consultant with the Joint Center for Political and Economic Studies and an associate professor at Howard University, says the Black middle-income population’s disproportionate number of blue-collar workers could prove devastating in this economy. “We could be facing a period where there could be serious losses of middle-class status and reversing the trend over the last four decades for the growth of the middle class,” he says. “Even during the 1980s when growth was slow and incremental, we never had a drop in the percentage of Blacks in the middle-income brackets.” He believes that policies must focus on both ends of the spectrum. Programs must be developed to provide the financial and academic support needed to increase the percentage of Blacks who earn bachelor’s degrees and to provide jobs for low-skilled, low-educated workers. “It was actually the so-called lousy jobs that had the greatest effect in reducing Black poverty during the ’90s,” he says of the Clinton-era job creation. “We need to realize that not everybody will be able to get into telecommunications or high tech or whatever the latest fad is. There are people who need the restaurant job and for whom particularly we raise the minimum wage,” he says. “For a lot of people, an eight-, nine- or ten-dollar job or two in a married couple means that they are not going to be raising their children in poverty.” Mary Pattillo, a professor of sociology and African-American studies at Northwestern University, says public policy fueled the expansion of the Black middle class in the latter half of the 20th century. “After the major policy interventions of the 1950s to 1970s – school desegregation, the Civil Rights Act, the Fair Housing Act, affirmative action – any subsequent growth in the Black middle class has been the result of overall economic growth as was seen in the 1990s under Clinton and before 9/11,” she explains. Pattillo, the author of Black on the Block: The Politics of Race and Class in the City and Black Picket Fences: Privilege and Peril among the Black Middle Class, advocates policy intervention to turn the tide. “In order to spur upward mobility among Blacks, which still trails far behind Whites, there needs to be investment in public education through college, as well as a commitment to affirmative action,” she says. “The returns to a college education have grown tremendously since the 1970s and much of the income gap can be attributed to differences in educational attainment.” Indeed, history has shown that policy efforts that don’t address discrimination along with opportunity fall short. The post-World War II policies that strengthened the middle class as a whole by expanding college education and home ownership didn’t allow African Americans to ride as high as Whites on the wave of economic progress. CLASS VALUES Beyond policy changes, many say there’s a role for Black professionals to play in securing the economic future of Black middle-income families and bolstering the possibility of intergenerational wealth transfer. And values have as much to do with it as economics. Taken together, these factors describe a Black middle class that is hanging on by the barest of threads. And it’s not only this population that is hurt when households lose their economic footing – their families, neighborhoods and local economies feel the strain, too. In many cases, Black professionals who have positioned themselves well in terms of education and earning power carry the additional weight of being a financial resource for less privileged members of their extended family. Karim Hutson, the managing member of Genesis Companies, a New York-based real estate development and construction firm, says that he and his other Black Harvard Business School graduates feel a responsibility to give back to their families, churches and communities. Having often grown up in economically adverse situations, they utilize their professional success to give back financially and through community service. “As a young professional, I sit on four boards,” Hutson says. “It is incredibly important to me that in all my professional and personal endeavors, I remain conscious of where I came from and help contribute positively to the community in every possible capacity.” Strengthening the economic standing of African Americans also would bolster the competitiveness of the cities where they reside. A study released by the Chicago Urban League posited that the city’s economic advancement is intimately tied to that of its 1.1 million Black residents. The report stated that greater economic inclusion would bolster per capita and household income, educational achievement, property values, tax receipts from tourism and workforce productivity for the city at large. “The city could expect to enjoy significant gains in GDP [gross domestic product] if the nearly $4 billion in revenues produced annually by African-American-owned firms were to double or even triple,” the report 32 BlackMBA • Fall 2008 • www.nbmbaa.org http://www.nbmbaa.org

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Black MBA - Fall 2008 Contents Online From the Chairman From the President & CEO Up Front Who is Middle Class? Life and Times of the Middle Class Modern Times CEO to CEO: Why Didn’t I Think of That? Pass it Forward 30 Years of Conference NBMBAA Board of Directors Honorary Co-Chairs Conference History Speaker Showcase Industry Theatre NBMBAA Case Competition® Scholarship Winners NBMBAA Chapter Presidents Conference 2009: New Orleans The New Face of Recruitment Part-Time is the Right Time Across the Pond On Campus Board Bound MBAs for the USA Market Reality: Good Tapping Company Resources On the Move Employer Profiles Leading Bias-Free Mentoring Matters Faith in Corporate Circles Mideast Region Steps Up its Game Collegiate Chapters All in the Family How to… International Markets Are You Happy? Survive and Thrive Striking a Balance Advertiser Index In Focus

Black MBA - Fall 2008

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