MLK Day: Income gap widens between whites, African Americans in California

Dr. Martin Luther King Jr. addresses marchers during his “I Have a Dream” speech at the Lincoln Memorial on Aug. 28, 1963 in Washington.
Dr. Martin Luther King Jr. addresses marchers during his “I Have a Dream” speech at the Lincoln Memorial on Aug. 28, 1963 in Washington. AP

The income gap between African Americans and whites in California has reached its widest point in decades, a trend that reflects a broader, growing chasm between the state’s wealthy and poor, experts said.

It is also a sign, some advocates said, that many of the economic disparities decried by Martin Luther King Jr. persist, even as the nation observes his birthday today.

In 1970, shortly after King’s death, California’s white, non-Hispanic families had a median income 50 percent higher than its African American families, according to a Sacramento Bee review of U.S. Census data. In the decades that followed, incomes for both blacks and whites rose for a couple of decades – but incomes for whites rose faster.

Conversely, during the recent Great Recession, incomes fell sharply for both black and white families – but they fell faster for African Americans.

As a result, median income today is 80 percent higher for California’s white, non-Hispanic families than for its black families, the latest census figures show. White California families typically earn about $90,000 annually; black families earn about $49,000.

In the Sacramento region, black families typically earn $43,500, barely half the $79,500 typically earned by white families.

“The doors of opportunity need to swing a little bit wider,” said James Shelby, president and CEO of the Greater Sacramento Urban League, which provides job placement and training in disadvantaged communities.

Shelby, other advocates and demographic experts attributed the growing income gap to a variety of factors: the lingering effects of the housing bust; shifts in the economy that reward those with a college degree and punish those without one; the persistent “achievement gap” in the state’s K-12 schools; and the higher incarceration rates among black men. Some also attributed the trend to prolonged racial discrimination.

In the last 15 years, as the state added 8 million residents and the nation added 5 million African Americans, the number of blacks living in California fell slightly.

“African American Californians generally are leaving the state,” said John Powell, professor of African American studies and ethnic studies at the University of California, Berkeley. “The opportunities here – it’s becoming much less attractive.”

Sacramento resident Tex Williams said he doesn’t think he’s had a lot of opportunities, even though he has taken many of the right steps to obtain good work.

Williams, 48, finished high school and spent two years in junior college. He said he has applied repeatedly for well-paying jobs in the transportation sector. Instead, he works as a janitor for the Sacramento City Unified School District. He isn’t sure if he’ll ever move up the economic ladder.

“It’s hard out there,” said Williams, a black father of three with a mortgage payment. “I’m constantly working to pay the bills.”

For blacks and others without a four-year degree, Williams’ experience is common. Many of the solid middle-class manufacturing and construction jobs once available to them have dried up or left California. In their place came a plethora of low-paying service jobs, often temporary.

“The trend is more opportunities at the top or the really low end” of the job market, said Sarah Bohn, a research fellow at the Public Policy Institute of California. “The middle is where we are seeing a really big drop.”

Blacks are less likely to have a four-year degree than whites, Bohn noted, and are thus less prepared to take advantage of growth in high-wage, high-skill jobs.

About 21 percent of black adults in the Sacramento region have a bachelor’s degree, compared with 35 percent of whites, census figures show. The proportion of blacks with a four-year degree has grown during the last 30 years, but not as quickly as the proportion of whites with a degree.

The disparity has its roots in the state’s K-12 system, where the student bodies at many schools attended by blacks and other minorities remain largely segregated and poverty-stricken, advocates said. These schools often have trouble attracting the best teachers, they said, and lack the resources needed to prepare impoverished students for college.

“Education determines what sort of jobs you are able to compete for, and education turns on what sort of schools you are able to access,” said Sarah Treuhaft, deputy director of PolicyLink, a national advocacy group promoting economic and social equity.

In Sacramento City Unified, almost 60 percent of black students attend schools where fewer than one in 10 students are white, state data show. The district’s white students score at the proficient level on end-of-course English and math tests at nearly twice the rate of its black students, though that gap has narrowed.

African American youth “are coming into high school with a second- or fourth-grade reading level,” said Urban League vice president Kevin Daniels, a former teacher.

Foreclosure crisis a factor

Before the recession, many black families in California and Sacramento turned to their biggest asset – their homes – as a way of paying debt and generating income. They refinanced mortgages during the housing boom and lost their homes in the subsequent bust at a disproportionate rate.

As recently as 2007, 40 percent of California’s black households owned their homes. By 2013, that figure had dropped to 33 percent, or one in three. The drop was even steeper in the Sacramento region, where black homeownership rates fell from 42 percent to 32 percent. Homeownership among whites didn’t fall nearly as fast.

The foreclosure crisis that began in 2007 was largely driven by “subprime” lending that charged borrowers exorbitant interest rates. In many cases, mortgage brokers and lenders earned significant fees for selling subprime loans. They tended to focus their attention on lower-income communities with a high number of minorities, households that otherwise struggled to get a loan.

Thousands of foreclosures later, many neighborhoods that once had a stable population are dominated by renters. They make monthly payments to landlords who scooped up homes at bargain prices during the housing bust.

“For a lot of people of color, most of their wealth was in their houses,” said Sacramento NAACP President Stephen T. Webb, a veteran real estate broker. “From 2005 to 2009 when we had the predatory lending, they were the ones most affected.”

Some advocates said that the dishonest lending during the last decade was indicative of a larger pattern of economic discrimination against blacks. Powell detailed studies showing that job applicants with “black-sounding” names are less likely to get job interviews than others. Treuhaft has conducted research showing that blacks with the same education level as whites still tend to make less money at their jobs.

Other advocates cited criminal laws imposing tough penalties for certain crimes, particularly drug-related crimes, as an example of institutional policies that disproportionately affect blacks. In 2010, black men in California were incarcerated in state prisons at a rate eight times as high as the rate among non-Hispanic whites. Job applicants with a criminal record often have trouble finding good work, which lowers their income.

‘Achievement gap’ key

Despite the lost ground, several experts and advocates said they believe the income gap between blacks and whites can be shrunk or even eliminated. But it will take concerted effort by government and business leaders, they said, as well as by leaders within the black community.

Improving the state’s education system and working harder to lower the “achievement gap” was the most common solution proposed by experts and advocates. The test score divide between whites and blacks has shrunk over the last decade but remains large.

“Make sure that students are in class,” Powell said. “If students miss more than five days of classes, it starts to heavily influence their performance. Make sure they have experienced teachers.”

Raising the minimum wage would help tens of thousands of black workers in service-oriented jobs, several experts said. The minimum wage is scheduled to rise to $10 an hour in 2016, but some advocates say that is not high enough.

A full-time job at $10 an hour pays about $21,000 annually. One in six blacks working full-time in California earned less than that in 2013, census figures show. Average rent for a one-bedroom apartment in Sacramento is about $10,000 a year.

“You have to make $17 an hour in Sacramento as a single person to sustain yourself,” said Danielle Williams, 29, a community organizer with Sacramento Area Congregations Together.

Several leaders also said that African Americans need to come together and initiate programs that fight poverty, promote education and support black-owned businesses. College-educated blacks must “understand the importance of networking” and build relationships in companies that will help them overcome bias and gain promotions, said Kimberly Merriman, a black manager at a local technology company.

Once they find success, black entrepreneurs should reinvest in their home neighborhoods so others can thrive, said Pastor Kevin Brown of Mt. Sinai Missionary Baptist Church in Sacramento.

“Our people of color have left those low-income communities and taken their resources, capital and intellectual property and decimated those neighborhoods,” Brown said.

The consequences of not closing the income gap are that “people start to lose hope,” he added. “You still see mass incarceration and young men who can’t read in third grade heading toward juvenile hall.”

Call The Bee’s Phillip Reese, (916) 321-1137.

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