The Great Recession and the weak recovery have soaked working-class Americans across racial and generational lines. But the groups who suffered most, amazingly, are the ones who remain most hopeful that life will improve for them and for their children. Optimism is plummeting among working-class whites but holding steady for minorities, a divergence that risks inflaming racial tensions. It could also sway the 2012 presidential election.
Census figures show that all American workers slid backward in the past few years. Median income fell by 6.4 percent between 2007 and 2010, to the lowest level in 13 years (adjusted for inflation). African-American incomes fell by more than 10 percent, and Latino incomes fell 7.2 percent. White incomes dropped less, by 5.4 percent. In 2010, income for blacks and Latinos remained 40 and 30 percent lower, respectively, than the median income for whites. Hispanics lost two-thirds of their household wealth between 2005 and 2009, and blacks lost more than half, according to the Pew Research Center’s Social & Demographic Trends project. Whites lost less than a fifth of theirs.
Yet polls suggest that far more minorities than whites believe they are still advancing toward their economic dreams. Latinos and blacks remain more than twice as likely to say that today’s children will have more opportunity than they did, according to an Allstate/National Journal Heartland Monitor poll conducted this summer. Minorities are also far more likely than whites to say that their own economic opportunity exceeds their parents’.
This “optimism gap”—the reason that Tierra and Ambar see the bright side while Dave loses faith, in the face of similar adversity—is a function of economic direction, not circumstance, according to polls and economic research. Minorities are steadily pushing their way into the middle class, which was once the province of whites. In 1979, whites constituted more than 80 percent of the earners whose income fell between the 30th and 70th percentiles, according to an analysis of Labor Department data by the liberal Economic Policy Institute. By 2010, whites had fallen below 68 percent of that middle-income group. Over the same period, the black share grew from 10 percent to 12 percent; the Latino share nearly tripled, from 5.4 percent to 14.4 percent.
The shift was most pronounced over the past decade, when 1.7 million Latinos joined the middle class and 1.5 million whites fell out.
A poll this spring by the Pew Economic Mobility Project underscored how minorities and whites see their divergent economic trajectories. Whites earning between $25,000 and $75,000 per year were more than twice as likely as blacks in the same income range—and nearly twice as likely as Latinos—to say they had already achieved the American Dream. Some three in five working-class blacks and Latinos say they haven’t yet reached that dream but that they expect to in their lifetimes. Just over one in three whites say the same. A majority of Latinos and a plurality of African-Americans say they expect to be making enough money 10 years from now to live the lifestyle they desire. A majority of whites say they don’t expect to be there.
Working-class whites, in other words, are already more prosperous and secure than working-class minorities, but they’re less optimistic because they don’t believe they’re climbing anymore—they’re simply trying to hold on to what they’ve got. Whites today seem to think that the middle-class security their parents and grandparents achieved may be crumbling beneath them. Minorities seem ready to accept the idea that their ascent, while steeper at the moment, will nevertheless deliver them to the middle class someday.
The stories of three families—one white, one black, one Latino—help to explain why.
Christine Angeleri’s great-grandfather, Salvatore Angeleri, emigrated in the 1920s from Italy to Detroit, where he set up a wholesale produce business. The working class in his newly adopted country was white and poorly educated. It stayed that way for generations, as Angeleri’s son took over the family business and his grandson, David Angeleri, passed on a produce career for a more secure position working dispatch for the Detroit Fire Department. There was no lake cottage for David’s daughter Christine to grow up visiting.
Christine married Dave Miller, a blond, baby-faced, second-generation firefighter who ran a construction business on the side. Together for 11 years, they work three jobs and finally bought the ultimate middle-class trophy: Butter-yellow with white trim, the Millers’ cottage is crammed on a narrow lot between a dirt road and Lake Erie. A jet ski rests behind it on a metal boat lift in hip-deep, choppy water. Far across the green-blue lake, Cleveland looms faintly on the horizon.
“Here’s the ticket! Twenty-five years, a pension, health care, and nine working days a month.”—Dave Miller
A year or so ago, Dave and some friends tore off the cottage’s roof and added a second floor, doubling its size to 1,400 square feet, consuming several cases of beer in the process. “Dave lives to come here,” Christine Miller says, lounging in a lawn chair overlooking the beach. “This is his American Dream.”