America's economic future may be glimpsed on the southwestern side of Houston, in a gated subdivision of new town houses. Julia DeLeon is an undocumented immigrant from Guatemala who owns a small business and has raised two college-bound daughters. She is sitting in the happy clutter of her older daughter's new motherhood, glowing as her toddler grandson rolls around on the floor.

But just a few miles away, too many blacks and Latinos have remained trapped in the  lower class or emerged from it just to slip back in. Not the DeLeon family. Its three generations represent the entrepreneurial spirit of self-selected immigrants that has long fueled the U.S. economy. Yet no one in this family is clear on how, or even if, they fit into American life.

DeLeon came from Guatemala two decades ago — when daughter Evelyn was a baby — and stayed when her visa expired. Now Evelyn is 21 and juggles school and motherhood. Julia's teenage daughter, Sharon, was born in Houston and is therefore a citizen, as is Evelyn's young son. Families can be unwieldy in that way; they don't conform neatly to pigeonholes and borders.

Julia's life story is an untidy example of the sort of self-made success about which so many Americans dream. She came to the United States, she recounted, as a stone-broke young mother who spoke no English and bunked with her daughter in the corner of a friend's apartment. She cleaned houses for poverty wages.

But soon Julia realized that the housecleaning agency was hoarding the profits, and she concluded that the arrangement made no sense. And so she slowly built her own base of clients, offering whichever domestic services affluent Houstonians needed to manage their busy lives. She watched children, walked dogs, and house-sat while investing her earnings in her daughters' future — Girl Scouts, art classes, church, and volunteer work.

"She always found stuff for us to do," Evelyn said. "I think that's why we've been able to get as far as we have." The family isn't wealthy, but Evelyn and her sister are living in a comfortable town house and preparing to set out on their own.

How far they make it as adults will matter a lot — to their family and to the country as a whole. The urban triangle in eastern Texas of Houston, Dallas, and San Antonio is bursting with young people of color such as Evelyn and Sharon — not just Latin-American immigrants but also domestic transplants and the children of both. Meanwhile, largely rural — and white — West Texas is rapidly aging, its communities dying. As a result, the state that saw the largest population gain in the past decade is one of four in which people of color constitute a majority of the population (along with California, Hawaii, and New Mexico).

A similar surge is under way nationwide. The 2010 census found that Latinos accounted for 56 percent of the nation's growth in the past decade, which was actually less than in previous decades, owing to the post-9/11 crackdown on immigration and then to the economic recession. Members of racial and ethnic minorities accounted for nearly 47 percent of Americans younger than 18 years old. In 2009, according to census officials, the median age among white Americans was 41; among African-Americans, it was 32; among Latinos, 27. In the nation's schools, in its workforce, in its supermarket checkout lines — and increasingly, in its electorate — people of color are, literally, the future.


The pressing question, however, is how many of these young people will truly join the middle class. Will they reap the benefits of their parents' labor and achieve an economic security that enables them to buy homes, start businesses, and take road trips even with gasoline at $4 a gallon? This is where the complexities of America's racial politics, past and present, cloud the way.

Consider the lessons of the would-be black middle class.

In the lexicon of black America, baby boomers are the civil-rights generation. They have witnessed an impressive change in the lives of their children and, now, in their millennial grandchildren. College graduation rates for blacks have quadrupled since the late 1960s. The number of African-American workers in jobs that sociologists regard as middle class has leaped nearly tenfold. Those are two of the three traditional measures of middle-class status.

The third is income. Here, too, both black and Latino workers have seen a notable improvement since the civil-rights generation stormed onto job sites to demand equal opportunity. The median income for black households jumped from just under $25,000 in 1967 to more than $35,000 in 2007, adjusted for inflation. For Latinos, the median household income climbed beyond $40,000. During the prosperity of the 1990s, the proportion of black families below the poverty line declined from one-third to one-fifth.

Nonetheless, income levels of people of color — and especially blacks — remain far behind that of whites. In 2009, according to census figures, the median income among whites was more than three-quarters higher than for blacks and more than a third higher than for Latinos — roughly the same disparities as in 1972. Measured by income, the racial makeup of the middle class hasn't changed much.

Worse, the improvement in income levels for blacks and Latinos may matter less than the measure regarded by some economists and sociologists as a truer test of economic class: wealth. It is wealth, they argue, that provides a feeling of security and a stake in the economy — the ability to finance a child's education, to seize an opportunity, to weather bad times.

The black and Latino communities lag badly in wealth. A study by Brandeis University sociologist Thomas Shapiro traced a cohort of families' finances between 1984 and 2007. Among middle-income whites, the average household in 2007 held $74,000 in financial assets — bank deposits, home equity, stocks, and the like. That was more than four times the $18,000 in assets of blacks who earned high incomes. Another study, conducted by the Federal Reserve Board during the housing boom, found that the median white family in 2007 held assets totaling just over $170,000, more than six times as much as the median nonwhite family's worth of less than $28,000.

This asymmetry has deep, historical roots. Notably, people of color were pretty much excluded from post-World War II policies that created a bulging middle class. Taxpayers helped to put GI's through college and raised homeownership rates in whites-only neighborhoods, while collective bargaining increased the pay for skilled jobs. And for decades, racial and ethnic minorities were excluded from these goodies by law and practice, and the nation is still living with the consequences.

Contemporary factors have done even more damage. For one thing, today's wealth-creating incentives often require having some wealth already. Economic policy aimed at the middle class is dominated by tax benefits for retirement accounts, mortgage interest, college savings, capital gains, and inheritances — all of less benefit to people of color than to white Americans. The Fed found that less than a tenth of nonwhite families in 2008 owned stocks, savings bonds, investment funds, or any financial assets beyond bank accounts, retirement accounts, and life insurance. Among white families, one in four owned stocks; one in five held bonds.

Another problem is predatory lending. Racial covenants and redlining are gone, but the housing market is still a dangerous place for black and Latino borrowers. They were significantly more likely, research has shown, to have been sold high-cost and subprime home loans during the housing boom compared with white borrowers with similar incomes and credit ratings. According to the Center for Responsible Lending, a research and consumer-advocacy group, this was especially the case for mortgage refinancings, which accounted for the bulk of subprime activity. In Atlanta, considered a bastion of the black middle class, subprime brokers swarmed church parking lots in search of elderly black homeowners to peddle unneeded, costly refinancings.

Historically, the wealth of black households has been disproportionately concentrated in their homes. This has magnified the destructive impact of the housing bust. The homeownership rate among blacks and Latinos is less than two-thirds that of whites and has recently been declining more sharply. The foreclosure rate among both blacks and Latinos is twice that among whites.

Combined, these factors go far in explaining perhaps the most bracing statistic describing the economic road that blacks have traveled since gaining their full civil rights until the election of the first black president. One way that economists measure class mobility is by dividing income earners into five quintiles and seeing how many people move from one to another over time. In 2008, according to the Economic Policy Institute, a stunning 45 percent of black Americans who belonged to the middle-income group during their childhoods had slipped into the bottom group as adults. That is, nearly half of the civil-rights generation's middle-class parents watched their progeny slide down the economic ladder to the bottom.


This reversal of the American Dream has many causes. Surely, one is the fact that more than 15 percent of black college graduates younger than 25 were jobless last year — twice the rate of whites. After the 2001 recession, it took until mid-decade before black unemployment slipped comfortably into single digits; by this spring, it had climbed to 16 percent.

Maybe the clearest way to understand such a backsliding among blacks is to think beyond the specific measurements of economic health and consider families as part of a larger community. By any measure, over generations, black families in the aggregate have commanded fewer resources at their disposal. They've had lower incomes, scarcer savings, and a rate of property ownership that's been tenuous at best. Nor has the government or anyone else stepped in to counter these realities with public initiatives on the scale of those that created the white middle class.

Instead, the financial industry has exploited hard-pressed black families, whether by redlining or by peddling credit to subprime borrowers. Drive through any heavily black neighborhood and you'll see what wonky research doesn't make plain — the multitude of lenders who jack up interest rates to customers who borrow against paychecks, tax refunds, and even household appliances. The relatively few black families that succeed in building up their assets must swim against the tide.

Blacks differ from Latinos in some economic particulars. Latinos, for instance, record lower rates of crippling consumer debt compared both to blacks and to Americans overall, according to the Pew Hispanic Center. Double-digit unemployment has shown some sign of relenting for Latinos, Pew reports, although their new jobs offer lower pay and flimsier security than before.

Still, in the end, the reams of data that try to measure the economic prognosis for Jim Crow's survivors and for the emigrants from Latin America point to a single, dramatic fact: In the United States, roughly a quarter of both blacks and Latinos live in poverty. It is tempting to set the poor aside and to think of the young people of color who are earning more money and higher degrees as a separate community of middle-class strivers. But they aren't. Another instructive finding in Brandeis sociologist Shapiro's work suggests that successful blacks are more likely to have family members deeply in need, which places greater demands on their wealth.

The same is undoubtedly true for Latino families, in which some members may be U.S. citizens and others may not. American-born Latinos consistently score better on measurements of prosperity and economic opportunity than the foreign-born do; which suggests the likelihood that Sharon, Julia DeLeon's Houston-born daughter, will have a brighter future than her older, undocumented sister. She will qualify for in-state college tuition and financial aid and, statistically, will be more likely to land a white-collar job.

Nonetheless, she'll be part of a community in which one in four of her neighbors — and family members, potentially — is poor. In 21st-century America, where people of color constitute the demographic future, a defining question is whether so many of them can continue to be left behind without the society blowing apart.


The author is the editorial director of

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