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The race to join the middle class: it’s a steeper climb for minorities

Craig Vanderburg will be the first to tell you that he’s worked hard for what he has, but caught a few breaks along the way.

He came from African-American parents who were college graduates and valued education, so higher education was an expectation, one he readily met, earning bachelor’s and master’s degrees. His graduation coincided with a post-civil rights-era boom in aggressive recruitment of people of color, by both corporations and universities. He was able to get a good job and thrive, along with most of his classmates at Henry Ford High School in Detroit.

He’s still doing well; a buyout allowed him to launch his own consulting business, and his children are following their father’s path. But their skies aren’t as sunny as his were.

“I don’t see kids having that same level of opportunity (that our generation did),” he said. “If you don’t have a degree in particular areas, your chances for employment are slim. A bachelor’s doesn’t get you what it used to.”

No, it doesn’t, as thousands of unemployed college graduates could testify.

Michigan often touts itself as the birthplace of the American middle class. That benchmark of economic security never fell entirely evenly across its population, but the good-paying jobs of the 20th century served to lift African Americans, Hispanics and other people of color on the same tide whites enjoyed. And as the middle class has faltered in recent years, their portion has suffered in kind.

In 1975, the median African-American household income stood at 60 percent of white households: $23,691 vs. $39,463. In 2011, however, it had fallen to 58 percent. Hispanic household income was 71 percent of whites’ in 1975, just under 70 percent in 2011.

In an upcoming report for the W.K. Kellogg Foundation, the Altarum Institute studied “The Business Case for Racial Equity” and noted that after adjusting for age and sex, mid-career white males today earn about 30 percent more than people of color.

“The full set of causes for these earnings differentials is unknown, but it clearly includes inequities in health, education, incarceration rates, and employment opportunities – all areas that can be influenced by targeted policies and programs,” the study reported.

And an Urban Institute study released in April showed the gap in wealth is far greater than income, with whites on average holding six times the wealth of African American and Hispanic households. The difference is significant, the study notes: “A home or a car can offer benefits far beyond their cash value. And even a small amount of savings can help families avoid falling into a vicious cycle of debt when a job loss or financial emergency hits.”

Bobby Ramirez can speak to that from experience. The 57-year-old autoworker spent nine years laid off from the Ford Motor Co. in the 1980s. What had looked like a secure middle-class job when he was hired in 1976 evaporated in the early ‘80s recession.

“I worked part-time jobs and had to move in with my mother,” he said. That wasn’t all he did – he got an associate’s degree at Henry Ford Community College and tried to continue at the University of Michigan’s Dearborn campus before dropping out. But it wasn’t until he was called back to Ford in 1988 that his fortunes recovered. It was that union job, the gold standard for the working class, that enabled him to consider himself solidly middle-class again. But he is under no illusions about today’s landscape.

During the auto industry’s restructuring in 2009, “a lot of the middle-class autoworkers retired and took buyouts. Now we have a new group of Latino workers coming in, making $16 an hour, with less benefits.”

That number includes his adult daughter, who, like her father once did, finds herself living under a parent’s roof while she tries to figure out a way forward from a $14-an-hour job with an auto supplier.

What Ramirez believes, along with Vanderburg, is that younger people will have to adapt to a radically different economy if they wish to be successful, one with fewer sure things and murkier career paths. But, both believe, success is absolutely attainable with hard work.

Vanderburg advised his son to study finance at Florida A&M, and “we did have the discussion about majors. He was talking about marketing. That won’t cut it. I told him to choose something with long-term potential. He’s good at math, so he’s in finance.”

Ramirez is counting on 2015 contract negotiations, when – he hopes – the reinvigorated auto industry will at least partly compensate workers for the concessions they granted to ensure its survival. But he’s close to retirement. His hopes are with his daughter; he wants her to stick with her union job but get an education, too.

“Because of the benefits, she can take some classes,” he said. “It’s a much better deal than no union.”

They share a certain optimism with William F. Jones Jr., CEO of Focus: HOPE, the Detroit-based job-training and education center. Jones said that while “clearly there have been tectonic shifts in Michigan,” the opportunity exists to bring at least some manufacturing back from overseas.

“You have to be prepared for jobs that might come back, and those that might be available in 10 years,” he said. Smart training won’t just be for a single job, but rather “will be a path to a career.”

Jones, who is African American, said the loss of secure union work and an overall loss of many government positions, both paths to the middle class for people of color in the past, have taken a toll. As the son of a former postal worker, “I can relate to kids whose backgrounds are modest.” But, he said, 21st-century young people should know that with education and the right mindset, they can still do well.

“They say luck is when preparation meets opportunity,” he said. “When I was a kid, a corporate job was what everyone wanted. Today, you might consider the entrepreneurial route. But it starts with education.”

The stakes are high, not just for people of color. The Altarum Institute study argued that “moving toward racial equity can generate significant economic returns” – for the entire country.

People who reach their full economic potential pay higher taxes, enjoy better health and attain higher levels of education than those who are held back through discrimination and other malign forces, the report concluded: “Minorities make up 37 percent of the working-age population now, but they are projected to grow to 46 percent by 2030, and 55 percent by 2050.” Closing the earnings gap for minorities would increase GDP, federal tax revenues and corporate profits, the study argued.

“We want the work to heal our racial divide to be a multi-sector work,” said Gail Christopher, vice president of program strategy at the Kellogg Foundation. “The business community has to be involved in this work. They have the most to gain from improving outcomes. Not only is it good for individuals, but these great big deficits we’re talking about – it’s a way of framing it in the positive. It’s critical to the future of our country.”

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