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Learning Hard Lessons In Income, Education

Economists agree that education is the key to success in the new economy. Yet college-educated blacks, who should be among the winners, haven't shared equally in the gains.

The attitudes of these well-educated blacks, measured by the Post, Harvard, Kaiser survey, match their experience. Those surveyed said they weren't keeping pace with the growth of the overall economy, and they expressed anxiety about the future.

The data about black income and education are unequivocal. Income growth of college-educated African Americans, after surging in the 1960s and into the mid-1970s, slowed nearly to a halt, while incomes of similarly well-educated whites increased substantially.

The result, economists said, has been a widening earnings gap between the best and the brightest blacks and whites, a fact of economic life in the 1990s that stands in stark contradiction to many popular assumptions about black success.

The survey reflected these disparities in relative black and white earnings over the past 20 years. Nearly half -- 45 percent -- of all black college graduates interviewed said their income had not kept up with the cost of living over the past five years. In contrast, 29 percent of all college-educated whites said their income hadn't kept pace with inflation.

And more ominously, 59 percent of all middle-class black college graduates said they're worried that they would fall out of the middle class -- a view shared by only 25 percent of similarly educated whites.

The causes of the growing black-white wage gap among better-educated Americans are not yet understood. Economists say the likely culprits include changes in the economy, historical patterns of black employment and the large increase in the number of African American college graduates entering the labor market during the past 20 years. Another factor is differences in the quality of education available to many blacks and whites. Discrimination also plays a role, argued many economists. "In some ways, the economic analysis still begs the question why these economic outcomes still seem to be organized around racial lines," said Lawrence Bobo, professor of sociology at UCLA. And regardless of the reasons, the widening income disparity "certainly contradicts the widely held belief that blacks have been the beneficiaries of all sorts of undeserved favoritism," he said. Overall, the growth rate of black family incomes has outpaced the increase in white family income over the past 20 years. The median real per capita income of families headed by a black grew by 26.7 percent from 1974 to 1994, while white family income grew by 19.7 percent, according to an analysis of data collected by the Current Population Survey and analyzed by economist Peter Gottschalk of Boston College for The Washington Post, Harvard University and the Henry J. Kaiser Family Foundation.

Yet the overall growth rate tells a different and more ambivalent story when the family incomes of similarly educated blacks and whites are compared. A surprising pattern emerges: Less-well-educated black families actually did better -- or, more accurately, didn't do as poorly -- as their white counterparts. But among college-educated whites and blacks, just the opposite is true: The earnings gap widened as white earnings grew at least twice as fast as the family incomes of blacks with similar years of schooling.

The median per capita earnings of families headed by a white with 16 or 17 years of college education -- the equivalent of a college degree or a year in graduate school -- increased by 31.6 percent from 1974 to 1994, Gottschalk's data shows. That was fully twice the gain of similarly educated black families, which experienced 12.9 percent income growth during that period, or far less than 1 percent a year.

An even more alarming story is told by economists who look beyond family income to the wages earned by individual blacks and whites with similar years of schooling and job experience.

Economists John Bound of the University of Michigan and Richard Freeman of Harvard have studied the earnings patterns of young black and white men and detected a dramatic erosion of earnings of well-educated blacks relative to whites.

"Basically, by the mid-1970s young college educated blacks were earning the same amount as their white counterparts. There was no racial disparity," Bound said. "But by the end of the 1980s, the earnings gap between blacks and whites had grown. . . . The black middle class success story of the 1970s changed in the 1980s."

About This Series
This project is the third in a series of polls that The Washington Post, the Henry J. Kaiser Family Foundation and Harvard University are conducting to measure the ways that information shapes how people think and act.

Representatives of the three sponsors worked closely to develop the survey questionnaire and analyze the results. The Post and the Kaiser Family Foundation, with Harvard University, are publishing independent summaries of the survey findings. Each organization bears sole responsibility for the work that appears under its name.

A total of 1,511 randomly selected adults were interviewed in the survey of public attitudes. The margin of sampling error for the overall results was plus or minus 3 percentage points and larger when results are based on only part of the sample. Sampling error, however, is only one source of error in public opinion polls.

A total of 250 self-described domestic economic specialists were interviewed for the survey of economists. All are members of the American Economic Association, have a doctorate in economics and are employed full time as economists.

Telephone interviewing for both polls was conducted by Chilton Research of Radnor, Pa.

Additional results reported in these articles were based on questions asked on other national surveys with samples of about 1,000 each conducted by ICR Research of Media, Pa.

A copy of results from the Post, Kaiser, Harvard survey may be obtained by calling the Kaiser Family Foundation at 1-800-656-4533. Ask for report No. 1199.