The following excerpt is from the report “African Americans and the Color Line,” by Michael A. Stoll, and published by the Russell Sage Foundation and the Population Reference Bureau. This report is one of several in the new series The American People, which sets the results of Census 2000 in context and collectively provides a portrait of the American people in a new century. Each report is written by an author or team of authors selected for their expertise with the data and their broad understanding of the implications of demographic trends. Reynolds Farley and John Haaga are the series editors.

(August 2004) Black family incomes, relative to those of whites, remained virtually unchanged from 1949 to the mid-1960s. However, because of the Civil Rights Movement, antidiscrimination laws, affirmative action programs, and a tight labor market, blacks made real gains relative to whites in family income from the late 1960s to the mid-1970s. From this point, with the national recession firmly rooted, black family income gains relative to whites stalled and on many accounts reversed through the mid-1980s.1

Two clear patterns emerge in median family income during the 1990s. First, the median family income of whites and blacks over this period followed trends in the general economy (see Figure 1). Median family income for whites and blacks rose modestly during the economic expansion of the late 1980s and declined somewhat during the early 1990s recession. However, blacks and whites made strong gains in family income during the late 1990s economic expansion. Both whites’ and blacks’ family income was at its highest level at the end of the expansion in 2000. From 1994 to 2000, whites’ family income grew from nearly $45,000 to $53,000, a gain of $8,000, or about 17 percent. Blacks’ family income grew over this period at an even stronger rate, 24 percent, from nearly $25,000 to $31,000, a gain of about $6,000.


Figure 1
Median Family Income by Race, 1980–2000

 

Note: Shaded area indicates recessionary period.
Source: Author’s estimates using the Current Population Survey.


Second, relative to whites, blacks’ family income levels still remained relatively low from 1980 to 2000. Over this period, the median family income of blacks never surpassed $35,000. To put this number in perspective, median family income in the United States in 2000 was about $52,000, or about $17,000 higher than the median figure for blacks. Alternatively put, blacks’ median family income level of $31,000 in 2000 was about the median family income level in the United States in 1965 (using constant 2000 dollars).2 Moreover, the racial gap in family income hovered consistently around $20,000 over this period.

The black/white family income ratio increased from 0.54 in 1990 to 0.58 in 2000. This suggests that blacks made up some ground relative to whites in family income during the last economic expansion. However, an examination of the absolute difference in income between blacks and whites, which indicates the true resource difference between the races, shows that these relative gains disappear. The racial difference in family income remained at virtually the same level at the end of the expansion in 2000 as it was at the beginning of the decade (about $21,500), despite strong gains by blacks in family income over this period. In fact, the racial gap in family income widened somewhat during the peak period of the economic expansion, from 1995 to 2000.

Of course, the difference in annual earnings between blacks and whites is a major explanation of the racial gap in family income. But so too is the racial difference in family structure. Blacks are less likely to be married and more likely to have families headed by females than are whites. Thus, black families have fewer members contributing to family income than do white families, and this difference contributes to part of the racial gap in earnings. This factor has become more important in recent years as the share of wives’ earnings in family income has risen. In 1970, about 27 percent of family income came from wives’ earnings; by 2000 this percentage had risen to nearly 34 percent.3 To the extent that black families are disproportionately headed by females, these factors are likely to influence the racial gap in family income.

Alternatively, the absolute growth in the racial gap in family income in the late 1990s could be related to differences in growth in family income for different household types-two-parent and female-headed families (see Figure 2). The greatest influence on the growth of the racial gap in family income in the late 1990s came from racial differences in family income among married (two-parent) families. The racial gap in family income for this group fluctuated between $10,000 and $12,000 between 1985 and 1992, before rising to nearly $14,000 in 2000. Interestingly, while this racial gap declined somewhat during the economic expansion in the late 1980s, it rose rather dramatically during the economic boom of the late 1990s for reasons that are not well understood. The racial gap in family income among female-headed families declined somewhat during the late 1990s. This gap remained fairly constant at about $8,000 between 1980 and 1994. Thereafter, the racial gap declined precipitously from about $8,000 in 1994 to just under $6,000 in 2000.


Figure 2
Black-White Difference in Median Family Income by Family Type, 1980–2000

Note: Shaded area indicates recessionary period.
Source: Author’s estimates using the Current Population Survey.


Michael A. Stoll is an associate professor of policy studies in the School of Public Policy and Social Research, and associate director of the Center for the Study of Urban Poverty, at the University of California, Los Angeles.


References

  1. Lawrence Mishel, Jared Bernstein, and John Schmitt, The State of Working America, 2002/2003 (Ithaca, NY: Cornell University Press, 2003): Figure 1A, 36.
  2. Mishel, Bernstein, and Schmitt, The State of Working America: table 1.1, 37.
  3. Mishel, Bernstein, and Schmitt, The State of Working America: table 1.1, 37.