Emergency managers in black-majority cities reflect growing income gap

Reynolds Farley

Benton Harbor, Detroit, Flint, Highland Park, Inkster and Pontiac. What do they have in common?

They are municipalities that, in recent years, had emergency managers appointed by the state or signed a consent agreement to avoid an EM.

Buena Vista, Detroit, Highland Park, Inkster, Muskegon Heights and Pontiac?

They are all school districts that are run by EMs, signed consent agreements or were abolished by the state.

What else do these places have in common? They are all majority African American communities.

There is a reason for this. During the civil rights movement of the 1960s, new laws and programs were enacted to equalize access to housing, jobs, education and health care. In Michigan, evidence indicates that overt racial prejudice waned, residential segregation declined, and interracial marriage and childbearing increased. A black middle class emerged and many of them moved into suburbs that were strictly off-limits to their parents and grandparents.

However, this historic racial progress contrasts to the current reality – a reality that explains why the locations listed above are run by the state, not by local elected officials.

The troubling fact is that the economic status of the average African-American resident of Michigan is much less favorable now than it was in 1970. The proportion of black men in Michigan who are employed has fallen sharply since 1970 and, at present, less than 50 percent have jobs.

And black men who are currently employed at jobs similar to those held by their fathers in 1970 typically earn much less. In 1970, black men in Michigan had per capita earnings of $41,000 in constant dollars. Today it is $19,000. For black women in Michigan, the situation is similarly bleak. Their per capita earnings have risen but much more slowly over the last four decades than those of white women, increasing the black-white economic gap.

The median household income of African Americans in Michigan was more that 80 percent that of white households in the late 1970s. By 2012, it was only 60 percent that of white households. The percent of black children in Michigan living in households with incomes below the poverty line rose from 30 percent in 1970 to 51 percent in 2012.

Whites in Michigan have experienced very difficult economic times – especially since 2001. White households incomes have declined and the earnings of white men have fallen quite sharply. But the economic deterioration of African Americans has been much greater.

For example, the proportion of white households in Michigan owning their homes has held relatively steady at 77 percent since the 1960s. At the same time, homeownership among blacks fell from 53 percent to 43 percent.

Why has the economic status of Michigan’s African Americans declined so significantly over the last four decades?

First, blacks – especially men – traditionally worked in the manufacturing jobs that firms eliminated through automation and the use of information technology. In 1970, 45,000 black men worked as machine operators or assemblers in Michigan. By 2011, this number was down to 14,000.

Restaurants – particularly fast-food places – have replaced the motor vehicle industry as the leading employer of the state’s black workers. And restaurant wages are much lower than those in manufacturing.

Second, the racial gap in college completion has grown significantly. In the early 1970s, young black women in Michigan were approaching parity with white women in terms of earning degrees. Thereafter, the enrollment rates of white women went up rapidly while those of black women rose slowly.

Worse still, black men have fallen significantly behind white men – and black women, too – in college completion. Although the percent of black men in Michigan earning four-year degrees has risen slowly, it is no greater than the rate for white men in the 1960s.

Clearly, not all African Americans have suffered a decline in their economic status. Those blacks with educational credentials to compete in the new, no-longer-segregated labor market may do quite well. And many of them move into the no-longer-segregated suburban ring. One-third of Detroit-area African Americans now are suburban residents.

But this leaves fewer and fewer middle-income blacks in numerous Michigan communities. As a result, there is less commercial activity, home prices are dropping and some residents cannot pay their assessments, leading to a significant loss in tax revenue for local governments.

So what will reverse the downward slide into emergency-manager status for many of Michigan’s largely black communities?

Aggressive programs to create jobs for the unemployed would be beneficial. We tried this and it accomplished much here in Michigan. Depression-era programs such as the Works Projects Administration and the Civilian Conservation Corps put many to work. In 1940, four percent of Michigan men and 17 percent of African Americans were employed in such jobs.

The vehicle industry is thriving in Michigan and that is good news. But automation has and will continue to reduce the need for workers. For instance, in manufacturing cars, it took 287 workers in 1987 to produce what 100 workers now produce.

Finally, many believe that the key to improving opportunities for African Americans in Michigan is to increase their limited educational attainment. The 2001 No Child Left Behind Act was motivated, in large part, by the racial gap in education. It requires states to do much to ensure that students meet measurable goals and focuses upon racial differences.

Michigan has taken many measures to improve education. Fundamental changes were made in the way Michigan supports local schools after the Kalkaska schools ran out of funds and closed in 1993.The state was among the first to charter numerous schools providing parents with alternatives to public schools. The state converted Highland Park and Muskegon Heights schools into charters.

More recently, Governor Snyder established an Educational Achievement Authority to take control of the least effective five percent of schools. However, these innovations have, thus far, yielded only modest gains and Michigan remains quite far down the list when states are ranked by their students’ test scores, high school graduation rates or college completion.

A report about racial change in Michigan should laud substantial achievements. African Americans can, pretty much, live where they wish, and pursue prestigious occupations that were closed to their parents. But for much of Michigan’s black population, employment opportunities are fewer, hours of employment are less, earnings are smaller and asset holdings are lower now than they were for Michigan blacks at the end of the civil rights decade.

Reynolds Farley is a demographer at the University of Michigan’s Population Studies Center and a professor emeritus. His research focuses upon racial trends and demographic issues in the United States. He maintains Detroit1701.org, a website about the history and future of Detroit.