Edward Wyckoff Williams
Graduates of Hampton University (Jim Watson/AFP/Getty Images)

(The Root) — President Ronald Reagan's 1984 re-election campaign is notably remembered for a political television commercial with the opening line, "It's morning again in America." The optimism expressed in the narration suggested that improvements to the U.S. economy since the recession of the late 1970s were due to Reagan's policies. It was a winning message. But the ad featured all-white faces and excluded African Americans and every other racial minority.

The more things change, the more they stay the same.

The Great Recession of 2007 has been compared to America's economic woes under President Jimmy Carter. This card was mostly played by Republicans during the 2012 election; they hoped that the stain of Carter's one-term presidency might spell doom for Barack Obama by Democratic association. That didn't work.


What wasn't discussed was the plight of American workers during the recession years of Reagan's first term, which saw lifetime wage declines and long-term wealth gaps, and no full recovery from extended periods of unemployment and underemployment. History is now repeating itself, with the worst disparities affecting young black and brown people.

Research based on data from the Bureau of Labor Statistics shows that 15.9 percent of Americans were "underemployed" in 2011. This includes the long-term unemployed, discouraged workers who have abandoned looking for work altogether and part-time workers who can't secure enough hours to sustain a living wage.

For young people — with high school diplomas and four-year college degrees — the landscape is even worse. The underemployment rate for 18- to 24-year-olds was 28.6 percent in 2011, compared with 16.6 percent for 25- to 34-year-olds and 12.8 percent for adults over the age of 35. Disparities based on race were staggering: 42.6 of African Americans under 25 were underemployed, and 32.6 of Hispanics. Only 24.5 percent of young whites were underemployed.

President Obama's recent commencement address at Morehouse College alluded to difficulties faced by young black males entering a fragile labor market, and the underlying statistical data are undeniable — showing that young people who pursue a college education may be at a disadvantage over the long term because student-loan debt is crippling the millennial generation.


Despite a steady economic recovery, most private-sector jobs created have been for low-skilled service-sector work. American industry is competing with the BRIC countries (Brazil, Russia, India and China), while U.S. corporations continue to move jobs offshore. Generations X and Y (those under 40) in this country are outmatched by advanced technologies that rely on fewer workers, and these young people must compete with citizens of developing economies, who work longer hours for less pay.

Lisa Kahn, a labor economist at Yale University, studied the earnings of men who graduated from college during the deep recession of the early 1980s and found that the higher the unemployment rate was at the time they graduated, the less they earned. And those workers never caught up. "The effects were still present 15 or 20 years later," she said. "They never made that money back." Kahn posits that the same is happening today.


Darrick Hamilton suggests that "occupational segregation" plays a large role in the wage gap. "Nearly 90 percent of U.S. occupations can be categorized as racially segregated," said Hamilton, co-author of an Economic Policy Institute paper called "Whiter Jobs, Higher Wages." The study showed that in jobs in which black men were underrepresented, the average salary was $50,533 annually, but in occupations in which black males were overrepresented, the salary was $37,005. Controlling for education and skills, the racial discrepancy persists.

Researchers at the Urban Institute believe that this emerging income gap is turning into a wealth gap. They found that the average net worth of people ages 29 to 37 had fallen 21 percent since 1983, while the net worth of 56- to 64-year-olds had nearly doubled. This means that millennials may be the first generation in U.S. history to acquire less wealth than the generation before it.


This phenomenon is exponentially compounded for African Americans. According to the Census Bureau, the wealth gap between whites and blacks nearly doubled during the recession, with whites having 22 times more wealth than blacks. The median household net worth for whites was $110,729 in 2010, versus $4,995 for blacks. This was exacerbated by the mortgage crisis of 2007-2008 as black and Hispanic families disproportionately lost homes to foreclosure — victims, too often, of bad loans and discriminatory banking practices.

Employment, income and wealth are interconnected, and as African Americans experience deeply entrenched underemployment — regardless of the cause — the result is that a generation of people who hoped for greater prosperity than their parents faces diminished opportunity and higher levels of poverty.


As the class of 2013 dons hats and tassels, data show that college education is losing its premium value. According to an Associated Press report, 1.5 million graduates in 2011, or 53.6 percent of those under the age of 25 who have a bachelor's degree, were jobless or underemployed — the highest share in 11 years. And 37.8 percent of employed college grads were working in a role that didn't require a degree, according to a report by the EPI. By comparison, only one-fifth of 16- to 19-year-olds were unemployed — suggesting that young, college-educated workers are struggling more to find employment than those with high school diplomas.

Perhaps unsurprisingly, the outlook for educated African Americans is even grimmer. The EPI report found that blacks with college degrees still lagged behind their white counterparts. In 2007 the unemployment rate of young black college graduates was 8.5 percent, rising to 21.9 percent by 2010. By 2012 that number had improved to 10.8 percent. White college graduates experienced an unemployment rate of 5.3 percent in 2007, which rose to 9.4 percent in 2010 and fell to 8.7 percent by 2012. This means that race remains a key factor in employers' hiring decisions.


That theory is borne out by research showing that black immigrants from the Caribbean, Africa and Latin America have struggled as much as native-born African Americans. In fact, they do worse, according to Patrick Mason, professor of economics and African-American affairs at Florida State University.

A popular myth is that black immigrants do better than native-born blacks. Mason, whose research is presented in "The Low Wages of Black Immigrants," argued that if black Caribbean males were doing better, "it might suggest that [this racial wage gap] was not due to discrimination." 


It seems when it comes to underemployment, income disparity and wealth gaps, race matters more than education levels. And for generations X and Y, the nation's progress toward racial equality over the past 50 years may not translate into dollars and cents.

Edward Wyckoff Williams is a contributing editor at The Root. He is a columnist and political analyst, appearing on Al-Jazeera, MSNBC, ABC, CBS Washington, Arise America and national syndicated radio. Follow him on Twitter and Facebook.


Edward Wyckoff Williams is a contributing editor at The Root. He is a columnist and political analyst, appearing on Al-Jazeera, MSNBC, ABC, CBS Washington and national syndicated radio. Follow him on Twitter and on Facebook.

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