CNBC Special Report: The New Black Overclass

Americans have a deep penchant for classifying people, including by race and socio-economic categories. Blacks historically have not fared well in either of those schemes and young black males have been especially stigmatized.

The media portray them as uneducated dropouts, irresponsible absentee fathers, sellers or users of drugs and criminals destined for prison. And it isn’t an accident that many blacks, both male and female, fall into the lower end of the traditional low-class, middle-class and upper-class distinctions of socio-economic standing.

The lines differentiating those classes tend to blur, influenced not only by income or assets — difficult enough standards for many blacks — but also by occupation, geography and heritage, a sorting and sifting process that is, overall, unfavorable to blacks. So strong is the appeal of classifying one another that we can lose sight of tectonic shifts taking place among us. Such is the case with the rise of what I call the New Black Overclass, or Newbos.

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Newbos are young African-Americans who rely on working-class values, a capitalistic philosophy and entrepreneurial instincts to create wealth and fame that would be unimaginable to their forebears. Largely male, they are using entertainment, professional sports, and media as foundations upon which to build diversified enterprises, some already worth hundreds of millions of dollars.

Droves of other young blacks are building businesses and careers in industries that have sprung up around these sports, entertainment and media figures, including sports and entertainment agents and lawyers, producers, financial advisors, publicists, composers, choreographers, stylists, personal trainers and security professionals, among others.

Unlike previous generations of blacks striving to succeed in a white-dominated world, these young moguls and their retinues have found their economic power in refusing to assimilate. Recognizing that institutional racism and other social and cultural barriers often block their way forward in a traditional white-dominated economy, they embrace and commercialize their interpretations and versions of black style and culture, a trend that reflects the emergence of non-traditional, creative leadership — think Bill Gates and Steve Jobs — in every aspect of the American economy. Their rapid rise from almost nothing represents a shining new aspect of the American dream, but also creates unprecedented challenges in their lives.

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The statistics are astounding. Black athletes and hip-hop CEOs like 50 Cent and Sean “P. Diddy” Combs are outperforming and out-earning most Fortune 500 CEOs, usually without the benefit of Ivy League educations, exclusive pedigrees, or generations of familial wealth. Today there are only three African-American CEOs running Fortune 500 companies.

In 2004, the highest-paid black CEO, American Express chairman and CEO Kenneth Chenault, earned a total compensation package of $21.4 million. That same year Bad Boy Records CEO Sean Combs, earned $36 million, Tiger Woods pulled down $87 million and Atlanta Falcons quarterback Michael Vick was paid $37.5 million as part of a 10-year, $130-million contract. The top three highest paid African-American athletes earned a combined $141.9 million in 2004, while the three African-American CEOs working in the Fortune 500 that year earned a combined total compensation of $56.5 million.

By 2007, the disparity in the earnings of the two groups had widened. In fact, two of the three black Fortune 500 CEOs, Time Warner’s Dick Parsons and Merrill Lynch’s E. Stanley O’Neal, were no longer in their CEO posts. Today’s three African-American CEOs in the Fortune 500 earned combined total compensation of $97 million, while the three highest-paid athletes earned a total of $192 million.

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