If Barack Obama embodies the American dream of equal opportunity, Velma Hart represents the midnight wake-up call bearing bad news. In September, the Army veteran and successful executive interrupted Obama's "recovery summer" road show by announcing, in a CNBC town hall meeting with the president, that she was broken. "I'm exhausted of defending you," she told the president. "I have been told that I voted for a man who said he's going to change things in a meaningful way for the middle class. I am one of those people, and I'm waiting sir. I'm waiting."
Hart is hardly the only worn-out American, as the midterms proved. But her moment in the political spotlight was striking because she is exactly the everywoman the president's remarkable personal narrative evokes: a middle-class black person who has worked hard and shared in the benefits of American prosperity, race be damned. Hart took a fabled road through military service to the middle class. She owned a house. She enrolled her kids in private school. She had a white-collar job. And by Thanksgiving, she'd been laid off. "She got bit by the same snake that has bit a lot of people," her former boss told The Washington Post last November. "It was a move to cut our bottom line."
We don't know how Hart's family has weathered the loss, because she quit talking about it. But if her trajectory matches the black middle class that she and Obama represent, she's suffered a decidedly more lethal bite than her white peers.
The black bourgeoisie has long held a contradictory place in the American psyche, balancing the discomfiting fact that a quarter of black people live in poverty. If a once enslaved people can now fill suburban tracts, the thinking goes, then surely we have overcome our racist history. The opposite is true: The insecurity and often backward mobility of would-be middle-class African Americans like Hart reveal how unjust our economy remains, and not only for black folks.
The American middle class as a whole is collapsing as poverty reaches record highs. But that collapse is most apparent in black communities. The median income for blacks fell by more than 4 percent in 2009, putting it more than $17,000 behind the national median. Joblessness is now at least 15.8 percent among African Americans, not counting the untold numbers who are working longer hours for less pay or taking jobs that set back both their salary and career.
The most striking of the bleak numbers, though, comes when considering young people. Few parental lectures stand out more from my childhood than the ones about education. That's true for most kids of civil rights-era black strivers. For generations, black families have held up schools as the portals to a better future, the stepladders for upward mobility and the security it brings. Indeed, one key measure economists use for middle-class status is the number of academic degrees you've earned. But try to explain that to today's black college grads. More than 15 percent of them are jobless, according to the Economic Policy Institute, compared to less than 8 percent of white graduates. A shocking one in three black high school graduates under 24 are out of work.
Black students also graduate saddled with disabling debt. According to a College Board report, in 2008, 27 percent of black college students left school with more than $30,500 in debt, by far the highest rate among all races and ethnicities -- even more striking when you consider the lower average black income. Just one in five black students graduates debt-free, compared to more than one in three white students. The divide is starker when looking at graduates of private, four-year universities, where 33 percent of black students leave with more than $30,500 in debt, compared to 23 percent of white students.
All of this means that too many black young people are starting their trip into the middle class both jobless and deep in the red. In so doing, they are haunted by the very history from which America is supposed to have broken. At the start of the recession, African American families had a dime for every dollar of wealth held by white families. Given that black wealth is disproportionately held in homes, and black homes have been disproportionately foreclosed upon, that gap is surely much worse today. One of the many consequences of being asset poor is that parents have a tough time putting kids through school and end up piling on debt -- for themselves and their children. Rather than passing on increased opportunity from generation to generation, middle-class black families are passing on debt.
The wealth gap helps explain why African Americans face such striking rates of backward mobility. Economists often measure class mobility by dividing the population into five income tiers and tracking how they shift from year to year. The Economic Policy Institute did so by race. It found that in 2008, a shocking 45 percent of black adults who had been born into the middle-income tier were living in the bottom tier. So, if measured by income, nearly half of black people born into the middle class live in near poverty as adults. The same was true for just 16 percent of whites.
With that backdrop, the racial disparity in the last decade's subprime-borrowing boom makes more sense. As I've written previously in the Prospect ("The Assault on the Black Middle Class," July/August 2009), in 2006, African American borrowers at all income levels were three times more likely to be sold subprime loans than were their white counterparts, even those with comparable credit scores. They were vulnerable to these predatory products for the same reason they're vulnerable to payday loans and other quick-fix, debt-trap credit -- because asset-poor black families of all classes have far more insecure economic lives and fewer choices.
In covering the foreclosure crisis, I've interviewed too many black families who still struggle to explain how they got drawn into the bad loans that ended in the loss of their sole asset. The White House continues to balk at providing real help by forcing a systemic solution to foreclosures; rather than discuss the deep-rooted causes of the housing crisis, the administration has often preferred scapegoats like speculators and lenders who tried to exploit the housing bubble for a quick profit. But I've yet to meet a family whose story connects with this madness. Rather, many black families invariably reveal a desperation to get out from under already crushing credit-card debt, to bounce back from the 2001 recession that lingered in black neighborhoods, to recover from the blow of an expensive health crisis like the heart attacks and strokes that disproportionately plague African Americans. They did not have the resources to weather these setbacks without leveraging their homes, and banks peddling predatory products took advantage of that fact.
There's a lesson here for our whole economy. Washington has spent the years since the housing crash putting the needs of the banks and the super-rich ahead of working families of all races. Beyond the inadequate real-job creation or foreclosure -- mitigation efforts, legislators struggle to keep even basic safety nets like unemployment insurance and food stamps funded. As a result, more and more Americans confront the same insecurity that the black middle class has faced for generations. A record 44 million people lived in poverty in 2009, and many of those who cling to the middle class do so tenuously. As Hart told The Washington Post, "You don't have to be on the street to be struggling."
The political space for the sort of real public investment needed to alleviate Hart's struggle is now likely gone. If it is not somehow reopened, the black middle-class story will cease to be exceptional.