Can blacks keep gains in a slowing economy?

Record educational gains may help break boom-bust cycle of the past 60 years.

In the 1990s, African-Americans finally latched onto the nation's economic boom and have ridden it to new highs. But in downturns, they've been the most vulnerable to layoffs. Does this economic slowdown promise anything different?

The pattern of the past six decades looks so strong that many economists doubt today's black workers will be able to break the cycle. If they don't and the downturn becomes severe, then the economic gains African-Americans have reaped during the 1990s could be erased. The most marginal workers among them will lapse again into joblessness.

But there's one cause for hope. African-Americans have attained record levels of education, according to Census figures released today. And this time, some black economic development officials say, the message is getting through. Education is the closest thing to a one-way street of progress.

"One thing you can plan for in this economy is change. And the way to cope with it is to go to school," says Clyde McQueen, president of the Full Employment Council, a nonprofit job-training organization in Kansas City, Mo. "Twenty years ago ... people didn't know the value of an education." Now, thanks to the long technology-based boom, everybody understands, he adds.

Just as technology stocks were hitting their peaks last March, African-Americans reached new highs of educational achievement. According to today's Census report, 79 percent of black adults 25 years and older held a high school diploma. One in 6 (17 percent) could boast a college bachelor's degree.

The long economic boom also helped push up wages and salaries to new highs, the Census reported.

By 1999, median household income for African-Americans had reached $27,910 - the highest figure ever recorded, even after adjusting for inflation. Just over half of black married-couple families earned $50,000 or more, compared with 60 percent of their white, non-Hispanic counterparts.

Moreover, a quarter of black women - and 18 percent of black men - worked in managerial and professional specialty occupations. Just under half (47 percent) of African-American householders owned their own home.

All these indicators suggest that blacks are narrowing the gap with whites, although big disparities remain.

For example: black households had a net worth of only $7,073 in 1995 (the latest figures available), the Census Bureau reported today in a separate study.

That's slightly under Hispanic householders and only about one-seventh of the $49,030 held by the average white.

The big question is: What happens next?

Many economists are skeptical that African-Americans can hold onto their economic gains.

"The old adage 'last hired, first fired' will hold as the downturn we're experiencing commences," says David Thomas, a professor at Harvard's Business School and co-author of "Breaking Through: The Making of Minority Executives in Corporate America." "This will be especially true for minorities in service industries and many of those who have lifted themselves out of poverty, because companies were willing to take people with less work experience with the intent of training them."

When the downturn comes, these least-trained workers are most vulnerable to layoffs.

The trend may already be showing up. In January, black female unemployment leaped from 5.7 percent to 7.3 percent. (The rate for black men dipped, however, from 7.3 percent to 6.9 percent.)

"This is a one-month blip. I don't know whether to make too much of it," says Robert Lerman, economist at the Urban Institute and American University in Washington. But it does raise concerns for marginal workers who get laid off.

"Each time, they sort of have to start fresh, and they're not worth as much when they get started with a [new] firm," Professor Lerman says.

Concerns run especially high for former welfare mothers who, because of welfare reform, have only recently moved into the workplace.

"It's going to be a harder test" of welfare reform, Lerman says. The reforms successfully pushed women into the workforce. But if they're laid off during a business slump, it's not clear how well the unemployment insurance system will sustain them, he adds.

The gap between white and black unemployment is a phenomenon of the industrial economy.

It first showed up in 1940 as blacks moved from the agrarian South to the industrial North, says Rob Fairlie, economics professor at the University of California at Santa Cruz.

And it widened during the 1950s and again during the 1980s. By 1990, the black unemployment rate was 2.5 times what it was for whites.

The reasons for the widening gap aren't fully accounted for, but they have swamped more positive trends, such as the narrowing of the education gap, he points out in a 1997 study.

Of course, whites have made important strides toward more education as well. It remains to be seen how the post-industrial economy treats blacks' hard-won education gains.

(c) Copyright 2001. The Christian Science Publishing Society