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Study: Income Gap Grows Between Black, White Families

BY Admin  November 13, 2007 at 4:35 PM EST

U.S. money

Forty-five percent of black children whose parents earned middle-class incomes in 1968 (about $55,000 in inflation-adjusted dollars) are in the bottom twenty percent of earners today. Only 16 percent of white middle-class children experienced the same economic fall.

That statistic comes from a series of three reports from the Economic Mobility Project of the Pew Charitable Trusts. The researchers examined data from a study called the Panel Study of Income Dynamics, which has followed 2,367 people — 730 of them African American — since 1968, asking them about their economic status over the years.

The researchers found that overall, family incomes are going up — two out of three people earned more than their parents — and that people who grow up in poverty are most likely to earn more than their parents.

But the gains are not universal. Nine out of 10 white children born into families in the lowest 20 percent of earners grew up to earn more than their parents, while only three out of four blacks did the same.

“Overall, incomes are going up. But not all children are benefiting equally from the American dream,” study author Julia Isaacs, of the Brookings Institution, told the Associated Press.

Columbia University sociologist Ronald Mincy, who was an adviser on the study, told the Washington Post that the researchers don’t have a definite explanation for the findings.

He and others speculated, though, that many factors could contribute: the increase in the number of single-parent black households, continued gaps in education between blacks and whites, racial isolation, and a disparity in wealth between blacks and whites — white earners are more likely than black earners with similar incomes to have assets such as their own homes.

Meanwhile, the study also highlighted that much of the growth in family income over the past generation is due to the fact that many families now have two earners. Between 1974 and 2004, the median income for men in their 30s actually dropped 12 percent. But because more women entered the workforce, median income for women more than tripled during that same time period.

And in fact, because more black women than white women worked outside the home a generation ago, some of the researchers speculate that black families’ incomes have received less of a boost from the rise in the number of working women, thus contributing to the racial disparity the study found.

Overall, researchers who study race and economic mobility say they’re surprised by the scope of the study’s findings. “We already knew that downward mobility was much more likely for blacks,” Northwestern University sociologist Mary Pattillo told the Washington Post. “But this is an even bigger percentage drop than I have seen elsewhere. That’s very steep.”