Black middle class losing income, wealth

CHICAGO (NNPA) - President Barack Obama's economic stimulus plan has proposed several initiatives that should increase job growth in the professional services sector-including information technology, engineering, legal and financial services-but a recent report warns old barriers to Blacks in professional services industries could limit benefits from this new investment.According to a Chicago Urban League report, the failure of White firms to hire Black workers or Black firms for professional services, and unequal treatment of Blacks in the industry is already costing the city's Black community some $1.2 billion in lost income.

The report, "African-Americans Navigating Chicago's Professional Services Sector: Facing Challenges, Seizing Opportunities," noted that the professional services sector represents "high level, high wage earning jobs."

Institutional barriers create obstacles to future acquisition of Black wealth and could be the death knell for many Black professionals still employed, it warned.

"Blacks have not recovered from the recession of 2001 which cut Black by about two per cent and income declined about two per cent. Blacks only have about 15 per cent of wealth of White Americans with a disproportionate amount of wealth in home values. These facts have led to projections that almost a third of the Black middle class could fallout of their middle-class status," observed Dedrick Muhammad, a senior organizer and research associate for the Program on Inequality and the Common Good at the Institute of Policy Studies in an e-mail to The Final Call.

"Black businesses nationwide are some of the least capitalized so the tightening of the lending market and the decline in consumer spending disproportionately put Black businesses in jeopardy," Muhammad said.

In his Saviours' Day 2009 keynote address on March 1, the Honorable Minister Louis Farrakhan said that Blacks earn $744 billion annually, and must unite to survive America's severe economic trial.

Instead of seeking economic benefits from a system that is falling, Farrakhan said Blacks should sacrifice some of a reported $2.7 billion spent on leisure and entertainment, some of the $2.8 billion spent on harmful vices such as tobacco products, and on the $2.5 billion on alcohol.

"All our artists, entertainers, and sports figures are doing something to give back . But if we were a part of a national pot and everybody put in what they could afford to sacrifice, we would have $30 million, $40 million, $50 million, $100 million, $200 million, $500 million, a billion dollars? America is for sale but how much of it do we own?" Farrakhan asked.

The report urged increasing the skills of businesses and their employees, the numbers of Blacks who hold partner status in corporate firms, greater transparency and accountability for public agencies and companies, joint action by legislators and policy makers to combat the problem and more shared research and analysis.

On March 4, President Obama announced changes in the way government contracts are awarded, which he says would benefit small businesses, including Black businesses. He has instructed budget director Peter Orszag to work with cabinet officials and agency heads to develop more stringent guidelines by the end of September.

"We will stop outsourcing services that should be performed by the government, and open up the contracting process to small businesses," he said.

During the Bush administration, many no-bid and other highly financially lucrative contracts went to companies and corporations that were already connected to the Washington lobbyist network.

Professional Blacks are often not members of the very influential "old-boy" network that leads to lucrative business contracts and favorable business arrangements. The problem is by the recession.

At a community stimulus package discussion meeting sponsored by Rep. Bobby L. Rush (D-Ill.) on Chicago's south side, community activist Eddie Read expressed concern that some Black organizations and businesses could miss out on the $787 billion package championed by President Obama.

"We need to know what resources are there so that we can develop a game plan, and an overall agenda to make sure this money does not fly over our community but flows through our community," said Rep. Rush.

In a recent column, Harry C. Alford, president and CEO of the National Black Chamber of Commerce, said the group will form at least three committees to pursue opportunities outlined in President Obama's stimulus package to monitor awarding of contracts and jobs produced in cooperation with Black organizations and community leaders.