African Americans, Latinos and Economic Opportunity in the 21st Century

The United States faces major challenges in sustaining a strong middle class in the decades ahead. Rapidly changing, often volatile economic conditions are making it more difficult to enter the middle class -- and stay there. Even as the bar to a middle class life is raised higher, economic opportunity is fading. As a result, the most rapidly growing groups in the U.S. -- particularly African Americans and Latinos -- face growing obstacles to entering, and staying in, America's middle class. The United States has a history of successfully incorporating individuals from divergent backgrounds and circumstances into the security and quality of life associated with being middle class. Public policy had a definitive hand in building America's middle class in the years following World War II. While these post-war policy efforts created an infrastructure of opportunity that lifted millions into the middle class, they did so in an uneven fashion. Anti-discrimination policies arrived late to the process of constructing the middle class and have been incomplete in their achievement. African Americans and Latinos, the two largest racial and ethnic groups in the country, have made strong economic progress since the late 1960s and early 1970s and now have a greater presence in the middle class. Yet the incorporation of these two groups into the American Dream is far from complete. Educational attainment, homeownership, income level and wealth are still significantly lower among African Americans and Latinos than among whites. Meanwhile, America's infrastructure of opportunity has begun to erode. The post-war emphasis on increasing educational attainment, homeownership and wages has given way to dramatic gaps between rich and poor. The combination of persistent racial inequities and an eroding opportunity infrastructure raises questions about the ability of the fastest growing groups of Americans to move into the middle class. Over the next five decades, the white population will grow 7 percent while the African American and Latino population will increase 129 percent. By 2050, African Americans and Latinos will make up about 40 percent of the US population. With growth proceeding at a rate 18 times greater than the white population, African Americans and Latinos should constitute a large portion of the future middle class -- but this is far from certain. In fact, since 1984, Latinos have actually lost ground on major indicators of motion toward the middle class. African Americans have gained ground in the last three decades, but only slightly and far less in comparison to initial gains experienced by whites in the post-war years. Drawing on recommendations from a previous Demos report, Millions to the Middle, we advocate policies that reinforce educational and economic opportunity for all Americans as the building blocks of a representative middle class. Foremost among these efforts should be developing programs that make college affordable, foster homeownership and asset building and ensure that work pays a living wage. We also advocate addressing discriminatory lending practices as one way to attack America's ongoing legacy of racial discrimination. We must bolster our existing opportunity infrastructure to prepare for the future middle class.