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For Release on Delivery Friday, October 19, 1973 6:00 p.me, EDT EDUCATION AND INCOME IN THE BLACK COMMUNITY Remarks By Andrew F 0 Brimmer Member Board of Governors of the Federal Reserve System Before the Fifty-Eighth Annual Convention of the Association for the Study of Afro-American Life and History Hotel Commodore New York, New York October 19, 1973 EDUCATION AND INCOME IN THE BLACK COMMUNITY by Andrew F . Brimmer* The extent to which blacks have--or have not--made genuine economic progress in recent years has been a subject of wide debate. Where one comes out in this controversy is likely to depend as much on his own perception of the progress which he thinks blacks ought to have made as on a dispassionate assessment of the objective evidence,. There are so many dimensions to this issue that it is difficult to explore particular facets in isolation 0 Nevertheless, I believe that our general understanding is enhanced by illuminating strategic elements of the black experience whenever an opportunity arises 0 To that end, I decided t h a t — r a t h e r than presenting a formal Presidential address at this 58th Annual Convention of the Association for the Study of Afro-American Life and History--! would focus on an underlying trend holding significant implications for blacks during f the 1970 s but which I believe has not received sufficient attention 0 S o , I will review briefly the role of education and its contribution to blacks 1 economic advancement 0 ^Member, Board of Governors of the Federal Reserve System -2- Between 1960 and 1972, the proportion of the black population 20 to 29 years old who had completed high school rose from 38 per cent to 64 per cent for males and from 43 per cent to 66 per cent for black femaleso cent For white males in the same age group, the rise was from 64 per to 84 per cent; for white females the rise was from 66 per cent to 83 per cent. Over this period, the white-black education gap at the high school level was reduced from 28 to 20 percentage points for men and from 23 to 17 percentage points for women. Moreover, within the last few years, the proportion of young blacks completing high school accelerated noticeably. An even sharper acceleration occurred in the case of college education. In 1960, about 4 per cent of all blacks in the 25-34 age range had completed 4 years or more of college. (The figures were about the same for men and w o m e n - - 4 0 l per cent and 4.0 per cent, respectively.) For all whites in the same age group, the proportion was 11.9 per cent in 1960; 15.8 per cent for white m e n , and 8.3 per cent for white women. By 1972, about 7.9 per cent of all blacks in the 25-34 age bracket had completed 4 years or more of college; by sex the statistics were 8.3 per cent for black men and 7.5 per cent for black w o m e n . Among whites, the figures were: total, 18.8 per cent; m e n , 22.6 per cent, and women, 15.0 per cent. An even more crucial trend is the rising propensity for young black people to attend college. In 1972, some 540 thousand blacks 18 to -324 years old were enrolled in college compared to 297 thousand in 1967„ The 1972 figure represented 18 per cent of all blacks in that age range vso 13 per cent in 1967. For young whites, the enrollment was 4,710 thousand in 1967 and 5,624 thousand in 1 9 7 2 — e q u a l to 27 per cent and 26 per cent, respectively 0 from The number of black men attending college rose 167 thousand in 1972 to 287 thousand in 1972; this indicated an increase from 16 per cent to 21 per cent of the black males in the 18-24 year age group« In contrast, while the number of white males attending college rose from 2,761 thousand to 3 , 195 thousand, enrollment as a proportion of the 18-24 white male population declined 35 per cent to 31 per cent. slightly--from The number of young black women enrolled in college expanded from 130 thousand to 253 thousand, or from 10 per cent to 16 per cent of the black females of college age« The number of white females in the same category climbed from 1,949 thousand to 2,428 thousand, lifting to 22 per cent from 20 per cent the proportion of the college-age population attending college 0 In 1964, there were 234 thousand blacks enrolled in college (representing 5o0 per cent of total enrollment of 4,643 thousand,) By 1967, blacks represented 4«9 per cent of the total enrollment, and this had climbed further to 8 0 8 per cent in 1972 0 Black males raised their proportion from 5 0 7 per cent to 8 0 2 per cent of all males during this five-year period; the corresponding fraction for black females rose from 6 0 3 per cent in 1967 to 9 C 4 per cent in 1972 0 S o , while a sizable gap remains between the proportion of white and black youths attending college, the differential narrowed appreciably over the last d e c a d e — especially during the last few years« -4These advances in educational attainment made a substantial difference in the degree of economic progress made by blacks during the 1960'so table. Just how much difference is indicated by the figures in the attached Panel A of the table shows median income in 1959 and 1969 and years of school completed by males 25 to 54 years old. The median income at each educational level is expressed as a ratio to the median for all men in the age range: $6,408 in 1959 (in 1969 dollars) and $8,465 in 1969. In Panel B , median income and education in 1969 are shown for both men and women for age groups 25-34 and 35-54. In this case, the base is the median income ($9,651) for white m e n , age 35-54, who had completed 4 years of high school; this was approximately the median income for all men in the age range 25-54 years. Several features stand out in this table. As one would expect, for both races and for both men and women, median income increases progressively with both age and education. the more influence,, However, education clearly has For example, in 1959, men with a high school education earned about two-thirds more than those who dropped out in grade school. Men with 4 years of college, earned 2-1/3 times as much as those with the least education. Four years of college raised earnings by two-fifths above earnings at the high school level 0 This general pattern also held for blacks--except that the extra income yielded by extra education was slightly smaller: three-fifths for high school g r a d u a t e s — a n d 100 per cent for college graduates—compared with grade school drop-outs; and one-quarter for college graduates over those with a high school education. For white men, the high-school-grade school spread was somewhat smaller, -5and the gains from college somewhat l a r g e r — t h a n was true of black men. By 1969, the grade-school-high-school-college differentials were about the same as a decade earlier for all men in the 25-54 age group e Among black men, the grade-school-high school gap was also unchanged over the decade. But the earnings for black high school graduates had climbed to 2-1/4 times those of grade school drop-outs, and the margin of college over high school graduates had widened to two-fifths. Among white men, the gap between earnings of college graduates and those with the least education had also widened somewhat. In recent years, young black m e n — w i t h much better e d u c a t i o n s have advanced their incomes relatively much more rapidly than did blacks who were older. For instance, in 1969, at both the elementary and high school level, black-white earnings ratios were approximately the same for men 25 to 34 years old (about .72) and for those 35 to 54 years (about .73). In contrast, increased education pass the high school level generally raised the ratio of black to white earnings for young black m e n . For the latter with four years of college, the ratio was .78, and for those with five or more years the ratio was .84. Among older male college graduates, the black-white ratio was .64, and for those with five or more years it was .73. O n the other h a n d , in 1969, in contrast to t h e situation among black m e n , the earnings of black female workers with education beyond the high school level roughly equalled the earnings of their white c o u n t e r p a r t s independent ly of a g e . Despite this improvement, however, the absolute income gaps between blacks and w h i t e s — a t all educational l e v e l s — r e m a i n substantial. -6As shown in Panel B of the table, on the average a black man with a high school education was still earning in 1969 about the same amount as a white man who only went to grade school. the situation was only slightly better. Among black w o m e n , Black men with a college degree had earnings about equal to or somewhat below those of a white high school graduate 0 But taken as a whole, the evidence presented here supports the conclusion stated above; younger blacks are making substantial progress in achieving secondary and higher education, and this increased education is yielding higher incomes both absolutely and relative to whites. Education and Income, 1959 and 1969 NOTE: A. In Panel A , median income at each educational level is expressed as a ratio to the median for all men in the age range 25-54 years. In Panel B , the base is the median income ($9,651) for white men, age 35-54, who had completed 4 years of high school; this was approximately the median for all men in the age range 25-54 years. Median Income in 1959 and 1969, B^ Years of School Completed, Males 25 to 54 Years Old. 1959 (In 1969 Dollars) Total Black White Item Median Income Ratio to Median $6,408 1.00 $3,570 .56 $6,637 1.04 Total 1969 Black Whit< $8,465 1.00 $5,222 .62 $8,79! 1.04 EDUCATION ELEM: TOTAL Less than 8 years 8 years HIGH SCHOOL: 1-3 years 4 years TOTAL COLLEGE: TOTAL 1-3 years 4 years B. .75 .63 .87 .47 .44 .58 .82 .71 .90 .70 .61 .80 .49 .46 .53 .75 .65 .83 1.03 .98 1.06 .66 .64 .70 1.05 1.01 1.08 .98 .88 1.02 .69 .63 .73 1.01 .92 1.04 1.32 1.19 1,48 .82 .78 .88 1.35 1.22 1.50 1.28 1.14 1.44 .94 .88 1.02 1.30 1.16 1.46 Median Earnings in 1969 and Educational Attainment of Persons 25 _to 34 and 35 to 54 Years Old (Year-Round Workers), B^ Sex. BLACK Education Male Median Income Ratio to Median ($9,651) 8 yr. or less HIGH SCHOOL 1-3 years 4 years COLLEGE 1-3 years 4 years 5 years or more Source: 35-54 $6,346 .66 $6,403 .66 $4-, 403 $3,901 .40 .46 WHITE Male Female 25-34 35-54 25-34 35-54 $8,839 .92 $9,736 1.01 $5,175 .54 $4,96< .51 .49 .54 .30 .27 .69 .77 .41 .60 .70 .67 .77 .38 .48 .37 .47 .82 .89 .91 1.00 .44 .52 .46 .53 .80 .90 1.03 .85 .97 1.27 .57 .72 .82 .59 .76 .94 .95 1.16 1.22 1.19 1.51 1.74 .59 .75 .84 .60 .76 .96 CM • ELEM: 25-34 Female 25-34 35-54 Panel At U.S. Department of Commerce, Bureau of the Census, "Social and Economic Characteristics of the Population in Metropolitan and Nonmetropolitan Areas: 1970 and I960," Current Population Reports, Series P-23, N o . 37, June 24, 1971, Table 12, p. 54. Panel B:. Bureau of the Census, "The Social and Economic Status of the Black Population in the United States, 1972," July, 1973, Tables 15 and 16, pp. 25 and 26.
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