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6
BLACKS IN THE ECONOMY
269
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Jacob Lawrence
Cabinet Makers (1946)
Gouache with pencil underdrawing on paper sheet
Hirshhorn Museum and Sculpture Garden, Smithsonian Institution,
Gift of Joseph H. Hirshhorn, 1966
OCR for page 271
Four decades ago Gunnar Myrdal sum
marized the economic status of black Americans in dismal terms (1944:205~:
Except for a small minority enjoying upper or middle class status, the masses
of American Negroes, in the rural South and in the segregated slum quarters
in Southern and Northern cities, are destitute. They own lircle property:
even their household goods are mostly inadequate and dilapidated. Their
incomes are not only low but irregular. They thus live from day to day and
have scant security for the fixture.
The 1940 census confirmed Myrdal's assessment. Crippled by the Great
Depression, America was poor, and blacks were very poor. The 1939 in-
comes of 48 percent of white families and 87 percent of black families are
estimated to have been below the federal poverty thresholds (Smith, 1988.
And while a total of one-half of all white families were below the poverty
line, the per capita income of blacks was only 39 percent of white income
(Taynes et al., 1986) . In addition to cash income, much of the population-
including a slight majority of all blacks-lived on the land and depended on
home-grown food and fiber; one-third of southern blacks were sharecroppers
or tenant farmers, who scraped together a meager subsistence in primitive
conditions of work and life. Adding these "in-kind" products to cash in
1. These calculations are based on the official 1964 poverty thresholds with all incomes
converted to 1984 dollars; see also note 2. As discussed below, the percentage of white and
black individuab who were poor was even higher.
27
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A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY
come (if it were possible to estimate them) would not change the portrait of
blacks' absolute and relative destitution.
A HALF CENTURY OF UNEVEN CHANGE
GAINS AND STAGNATION
World War II put America to work, and postwar prosperity and growth
lifted living standards. Twenty years after Myrdal's study, 36 percent of black
families and 9 percent of white families received incomes below poverty
thresholds. Per capita black income was about 4 times higher than it had
been in 1939, although it was still only one-half of white income.
By the 1960s, blacks were no longer concentrated in southern agriculture.
Even as Myrdal was writing in the 1940s, they were migrating by the
thousands to cities in the North and South, pulled by wartime industrial
jobs and wages and pushed by the inexorable labor-saving mechanization of
cotton plantations. The net emigration to the North eventually totaled 3.5
million blacks, more than one-quarter of the national 1940 black population
of 13 million.
Myrdal viewed blacks' urbanization and industrialization with great opti-
mism. He heralded it as the beginning of fundamental changes in American
race relations after more than a half century of no fundamental change.
Fundamental changes were indeed occurring in the 1960s, largely as a result
of changing social conditions and blacks' own insistence on their civil and
democratic rights.
During this period, black men moved from unemployment and farm labor
to an array of blue-collar industrial jobs and a few white-collar positions.
Comparing the employment situation of black men in 1973 with that of
1940 shows that the proportion of labor force participants who were unem-
ployed, on public emergency jobs, or working on farms declined from 52 to
11 percent (Farley, 1987:42~; those working as machine operators, factory
laborers, or blue-collar craftsmen rose from 31 to 50 percent. During the
same period, black women moved from domestic service and farm labor into
factories, shops, offices, and some professional and managerial positions (see
Table 6-1~.
Moving from the rural or small-town South of 1940 to the nation's cities
gradually brought to blacks the common comforts of American consumer
technology-inside plumbing, electricity, refrigeration, telephones, automo-
biles, radio, and, eventually, television. They also gained much greater access
to medical care, especially after President Johnson's Great Society inaugu-
rated Medicare and Medicaid. Yet urban, industrial America, North or
South, was not the promised land. In cities, unlike on farms, you cannot
feed a family without cash income.
In the 1960s blacks deeply resented their continuing second-class status.
Despite their gains since 1939, blacks in general did not share the affluent
272
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BLACKS IN THE ECONOMY
TABLE 6-1 Occupation and Industry of Employment for Black Men and
Women (in percent), 1939-1984
Sex and Occupation or Industry
Employed in major industry groupings
Black men
1939 1949 1959 1969 1979 1984
Agriculture, forestry, fisheries 42.5 24.9 12.7 5.3 2.8 3.4
Construction, manufacturing, mining 21.8 32.9 35.0 41.3 37.7 33.6
Transportation, communication, pub
lic utilities 6.5 9.0 8.2 9.9 12.6 12.6
Wholesale and retail trades 10.1 12.1 13.8 15.1 15.1 16.7
Service, including finance, insurance,
real estate 15.8 15.6 17.4 21.1 24.7 27.5
Public administration 1.6 3.9 5.6 7.3 7.0 6.2
Black women
Agriculture, forestry, fisheries 16.1 9.4 3.6 1.4 0.6 0.4
Construction, manufacturing, mining 3.7 9.4 9.3 16.1 18.1 16.5
Transportation, communication, pub
lic utilities 0.2 0.9 1.0 3.0 5.2 5.4
Wholesale and retail trades 4.2 10.3 10.1 12.2 12.6 14.3
Service, including finance, insurance,
real estate 73.9 65.9 65.0 61.4 55.4 56.5
Public administration 0.6 2.2 3.8 5.9 8.0 6.9
Employed in major occupations
Black men
Professional 1.8 2.2 3.8 7.8 10.7 8.0
Proprietors, managers, officials 1.3 2.0 3.0 4.7 6.7 6.3
Clerical and sales 2.1 4.2 7.0 9.2 11.1 13.1
Craftsmen 4.4 7.8 9.5 13.8 17.1 15.8
Operatives 12.6 21.4 24.3 28.3 23.4 22.6
Domestic service 2.9 1.0 0.4 0.3 0.2 0.1
Other service 12.4 13.5 14.9 12.8 15.8 18.3
Farmers and farm workers 41.1 23.9 14.3 5.6 3.0 4.9
Nonfarm laborers 21.4 24.0 22.8 17.5 12.0 11.0
Black women
Professional 4.3 5.7 6.0 10.8 14.8 13.9
Proprietors, managers, officials 0.7 1.4 1.8 1.9 3.7 5.2
Clerical and sales 1.4 5.4 10.8 23.4 32.4 33.1
Craftsmen 0.1 0.7 0.5 0.8 1.4 2.6
Operatives 6.2 14.9 14.1 17.6 14.9 12.0
Domestic service 60.0 42.0 35.2 17.5 6.5 5.9
Other service 10.5 19.1 21.4 25.7 24.3 24.8
Farmers and farm workers 16.0 9.3 9.6 1.6 0.6 0.5
Nonfarm laborers 0.8 1.5 0.6 0.7 1.4 1.8
Sources: Data from decennial censuses and the Bureau of Labor Statistics.
273
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A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY
life-styles of the white majority. In one city after another, rising dissatisfac-
tion and black consciousness erupted in violence and civil disorder. The
blue-ribbon Kerner Commission, charged to help the nation understand the
black rage, echoed An Am~can Dilemma 25 years earlier (National Advisory
Commission on Civil Disorders, 1968:253~:
Negro workers are concentrated in the lowest skilled and lowest-paying
occupations. These jobs often involve substandard wages, great instability
and uncertainty of tenure, extremely low status in the eyes of both em-
ployer and employee, lircle or no chance for meaningful advancement, and
unpleasant or exhausting duties.
And now, two decades later, black-white differences are still large. These
differences remain despite significant improvements since 1940 in the abso-
lute and relative positions of blacks. But after initial decades of rising relative
black economic status, black gains have stagnated on many measures of
economic position since the early 1970s. Two important examples are pov-
ert~y rates and per capita income. In 1985, 31 percent of black and 11 percent
of white families lived below the federal poverty line; the 1974 poverty rates
had been 29.3 percent of black families and 7.3 percent of white families.
Black's real per capita income in 1984 was one-third higher than it had been
in 1968 and about 6 times its 1939 level; but that income was only 57
percent of white income, the same relative position as in 1971.
The lack of progress in these important indicators of economic status
during the past two decades is largely a consequence of two conflicting
trends: rising average black wages relative to white wages but decreasing
black employment relative to white employment. The rising weekly or hourly
wages and occupational positions for employed blacks have been accompa-
nied by falling and unstable employment patterns that have made employ
ment increasingly unlikely for many blacks. The greatest share of this de-
creased employment has fallen on the least educated workers, who, faced
with rising unemployment and stagnant or declining real wages, have often
responded by dropping out of the labor force. The uneven distribution of
employment and earnings losses has had consequences for the distribution
of income among blacks.
BLACK INEQUALITY: THE POOR AND THE MIDDLE CLASS
Uneven change over time in the average economic position of blacks over
the past half century has been accompanied, especially in the last quarter
century, by accentuated differences in status among blacks. One of the most
important developments since the 1960s has been that some segments of the
black population gained dramatically relative to whites while others have
been left far behind. During the 1960s, incomes were growing for most
black (and white) families. Blacks in all income ranges gained relative to their
counterparts in the white family income distribution. In fact, as the rate of
poverty declined, the relative gains were greatest for black families with the
274
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BLACKS IN THE ECONOMY
lowest incomes (Taynes et al., 1986~. Then, during the 1970s, reductions in
poverty rates slowed, leaving approximately one-third of black families with
incomes below the poverty line throughout the decade and into the 1980s.
A major reason for the divergence in the economic status of black families
is that the economy has been especially unstable with respect to the jobs and
wages of black adult males. Their gains and setbacks, absolutely as well as
relative to whites, are a major part of the economic experiences of blacks
over the past 50 years. Conditions within the black community began to
diverge sharply in the 1970s. This divergence can be seen very clearly in the
experience of young men. By the early 1980s, black men aged 25-34 with
at least some college earned 80-85 percent as much as their white counter-
parts. They also achieved some gains in private-sector white-collar positions.
In terms of education, these black men represented the top one-third of
their age group. At the other end of the group were the one-quarter of black
men aged 25-34 who had not finished high school and who could not
compete in the stagnant 1970s economy. An increasing number dropped
out of the labor force altogether. These differing experiences lie behind the
growing polarization that appears in economic statistics.
Earnings inequality has been increasing over the past 25 years for both
white and black adult men, but especially among blacks (Taynes et al., 1986~.
Since 1959, inequality among black men has been consistently greater than
among white men. The lowest earning 40 percent of black men earned about
8 percent of the total earnings of black men in 1959, but 5 percent in 1984.
The highest earning 20 percent of black men earned 50 percent of the total
in 1959, but 60 percent in 1984. As noted above and discussed in detail
below, a major source of the greater inequality is the increasing fraction of
black men without any earnings. More generally, in 1984, about 40 percent
of black men and 20 percent of white men (aged 25-55) earned less than
$10,000. In 1969, approximately 10 and 25 percent of white and black
men, respectively, had earnings below $10,000 (in 1984 constant dollars).
This income was insufficient to maintain a family of four above the federal
poverty threshold.
Polarization of the family income distribution has also taken place. In
1970, 15.7 percent of black families had incomes over $35,000; by 1986,
this proportion had grown to 21.2 percent (in 1986 constant dollars). Simi-
larly, the proportion of black families with incomes of more than $50,000
increased from 4.7 percent in 1970 to 8.8 percent in 1986 (22 percent of
white families had incomes of more than $50,000 in 1986) . During the same
years, the proportion of black families with incomes of less than $10,000
also grew, from 26.8 to 30.2 percent.
An important aspect of this polarization in the incomes of black men and
black families has been the growth, during the years since 1960, of female-
headed black families. It is among such families that the incidence of poverty
is highest. While some female-headed families are middle class just as some
two-parent families are poor, it is not an exaggeration to say that the two
most numerically important components of the black class structure have
275
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A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY
become a lower class dominated by female-headed families and a middle class
largely composed of families headed by a husband and wife.
The divergent experiences of upwardly mobile blacks and those on the
fringe or outside the economic mainstream are evident in statistics on edu-
cation and earnings and on family composition and income:
· Among college graduates, the annual earnings of black males rose 6
percent relative to those of whites between 1969 and 1984; among persons
with 1 to 3 years of post-high school education, the relative gain was 2
percent; but among high school graduates, blacks fell 5 percent further
behind.
· Among two-parent households with children, black earnings rose 4
percent between 1973 and 1984, while white earnings fell 4 percent. Earn-
ings of female-headed households fell for both blacks (9 percent) and whites
(8 percent), but there are proportionately many more female-headed black
households than white.
The divergent experiences of blacks are also evident in some comparisons
of black and white economic statistics on wealth and poverty:
· The median wealth of black households is 9 percent of the white house-
hold median. However, among black and white households with incomes
of less than $10,800 in 1984, the black median was 2 percent of the white.
At all higher income levels, the relative median net worth of black house-
holds is more than 9 percent, but because the lowest income group con-
tained a much larger fraction of black households (40 compared with 20
percent of white households), the median wealth of all white households
was more than 11 times higher than the median of all black households.
· In 1969, 58 percent of all poor black children were in female-headed
families (compared with 36 percent of white children); in 1984, 75 percent
of poor black children were in female-headed families (compared with 42
percent of white children) .
While much better off than blacks of lower status, middle and upper
income blacks remain well behind comparable white households (see Landry,
1987~. For example, although the absolute and relative gaps between average
incomes of two-parent black and white families are not very large, black
families need more members in the work force in order to approach the
living standard of white families. Because the earnings gap between black and
white women is smaller than the gap between men, black working wives
contribute a greater share of total black income than do white working wives.
In addition, black wives have a higher labor force participation rate than do
. .
w. :llte wives.
Even the most well-off black families in 1979 still had a difficult time meeting
the standards set by the Bureau of Labor Statistics (BLS) as the income needed
by an urban family of 4 to maintain middle-class living standards. The last year
thedatawerepublished,theupperincomestandardwas$34,317;intermedi-
ate, $20,517; and lower, $12,582. In 1979, approximately 24 percent of black
276
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BLACKS IN THE ECONOMY
families were in the middle-income range compared with 50 percent of white
families. At the beginning of the 1970s, 23 percent of black and 47 percent of
white families had been In the middle-income range (Hill, 1987:47~. Thus,
there was visually no growth in the number of middle-income families during
the 1970s by this measure. Although comparable data have not been pub-
lished by BLS since 1979, all other economic statistics suggest that blacks are
likely to have fallen further behind whites.
The rest of this chapter elaborates on these principal points concerning
uneven changes in blacks' economic status over time, the divergence in
wages and employment since the 1960s, and rising inequality. The next two
sections discuss poverty and income and wealth: trends in poverty and the
underlying social forces behind the trends, changes in the sources and sizes
of the incomes received by whites and blacks, and the very large black-white
differences in wealth and types of asset holdings. Blacks' labor market posi-
tion is examined next through a description of their comparative earnings,
employment, and occupational position. The last major section looks at
equal employment laws and their enforcement, and then considers the spe-
cial situation faced by black youth in the contemporary labor market.
POVERTY
TREN DS I N POVERTY Sl NCE 1939
In 1939, the poverty rates for black and white people were 93 and 65
percent, respectively (see Figure 6-1~.2 The odds that a black person would
2. In the late 1950s, the U.S. Department of Agriculture determined the minimum cost of a
nutritionally adequate diet for families of various sizes. In the> 1960s, officials at the Social
Security Administration took these cost estimates and assumed that one-third of a household
budget should be spent for food. This led to poverty "thresholds" or "lines" for households
of different sizes, which arc adjusted annually for inflation using the consumer price index. In
1986, the poverty threshold for an adult living alone was $5,701; for a family of two adults and
two children, $11,203. If the pretax cash income of a person living alone or all members of a
household falls below this poverty line, all members of that household are considered poor.
Some analysts argue that this procedure substantially overestimates poverty because of the
access of farm and rural families to home-grown food and because of noncash federal transfer
programs (such as food stamps) that have been available to the poor since the late 1960s.
Experimental work at the Bureau of the Census suggests that the widely cited poverty rates
would be reduced by about 10 percent were households to receive credit for food stamps,
school lunches, and subsidized housing. In 1985, for example, the poverty rate among blacks
would have fallen from 31 to 28 percent; among whites, the change would have been from 11
to 10 percent.
However, other analysts argue that the official poverty rate is too low since it is challenging
or impossible for a person to live on $5,700 or for a family of four to live on $11,000, especially
in New York, Chicago, Detroit, and Los Angeles, where many of the minority poor reside.
The Bureau of the Census has taken this into account by providing information about people
in households whose incomes fall below 124 percent of the poverty line. If this definition is
used, in 1986 the poverty rate for blacks would increase from 32 to 39 percent and from 11 to
15 percent for whites (see Levine and Ingram, 1988).
277
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A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY
FIGURE 6-1 Poverty rates of blacks and whites and odds of being in poverty,
estimated percentages, 1939-1985.
100
90
80
us 70
a: 60
LL
>
o
CL
~ 50
o
m
~ 40
He
IL
c:
30
20
10 .....
o 1 1 1 1 1 1 . . .!
1939 1944 1949 1954 1959 1964 1969 1974 1979 1984
8
A Relative Black/White Odds
/ \ A of Being
I/ V \ in Poverty
4,:
White
-
~'
-
YEAR
Source: Data from decennial censuses and Current Population Surveys.
278
7
4
5 (9
z
ILL
m
IL
o
cn
o
LL]
>
LIJ
cr
1
OCR for page 279
BLACKS IN THE ECONOMY
be in poverty (the ratio of the poverty to the nonpoverty populations) were
7 times higher than those for a white. After that date, poverty rates fell
rapidly for Americans. By 1974, poverty rates had declined significantly: 30
percent of blacks and 9 percent of whites lived in households whose incomes
fell below the poverty line. The odds that a black would be poor (3 to 7)
were more than 4 times those for a white (1 to 10~. As for many economic
measures, the early 1970s were a watershed, when progress, begun with
recovery from the Great Depression, slowed or reversed. In 1986, both black
and white poverty rates were higher, 31 and 11 percent, respectively, and
the relative odds were similar to their levels in 1974.
The poverty of black children, in particular, is striking: 44 percent of black
children lived in poor households in 1985. The comparable figure for white
children was 16 percent. These figures were computed after family assistance
benefits and other government transfers were added to household incomes
(see note 2~. Comparisons of pretransfer resources are even more distressing,
especially for children in the decisive and vulnerable first 10 years of life.
While a large majority of white children raised during the 1970s escaped
poverty in their first 10 years, two-thirds of black children were not so
fortunate. And 5 of 10 black children were poor for 4 of their first 10 years;
only 1 of 12 white children knew that much poverty during the 1970s. One
black child in 3, but only 1 white child in 33, was poor at least 7 of the 10
years (Ellwood, 1988~.
Perhaps most important among the many contributing factors to the de-
cline in poverty among blacks between 1939 and 1973 was the high rate of
national economic growth sustained, with moderate cyclical interruptions,
throughout the period. Per capita real gross national product (GNP, adjusted
for price changes) grew at an average annual rate of 2.6 percent. During this
period of sustained growth, blacks left the low-income rural South for cities
and industries where wages were much higher. Between the census enumer-
ations of 1940 and 1970, the percentage of blacks living in urban locations
increased from 49 to 81 percent, and the percentage of blacks living in the
South fell from 77 to 53 percent.
The adverse change in poverty trends after the early 1970s can be attrib-
uted to three major factors. First, again perhaps most important, has been
the nation's economic growth. Between 1973 and 1986, per capita real GNP
rose by only 1.5 percent per year. Second, while black men with jobs have
continued to approach whites in the occupational ladder and in hourly wage
rates, these gains have been offset by employment losses so great that relative
per capita annual earnings of black men have stagnated. Third, changes in
family structure have resulted in more black women and children in poverty.
In 1985, 75 percent of the black children living in poverty were in female-
headed households; 42 percent of poor white children were in such house-
holds.
The proportions of persons in poverty from 1959 to 1986, by family type
(male or female headed) and race, are shown in Figure 6-2. Virtually all
279
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A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY
in the economic position
Freeman (1973) concluded that the improvements
of blacks during the late 1960s were largely consequences of government
antidiscriminatory activity following the 1964 Civil Rights Act. Vroman
(1975) reported similar findings, and Leonard (1985), using data on more
than 1,700 class-action suits under Title VII, presented evidence that litiga-
tion under Title VII played an important and independent role in advancing
the employment of blacks and had a relatively greater impact than affirmative
action. But the research literature also contains studies that find very weak
or nonexistent effects of government employment laws on black employ-
ment status; for a review, see Brown (1984a). Most notably, Smith and
Welch (1977, 1986), the two strongest proponents of improvements in
education as the major source of black economic gains, have reported either
nonexistent effects or effects during the 1970s of short duration for equal
employment policy.
Many of the latter studies suffer from a set of common problems. Given
the ubiquity of the changes, studies that compare public-sector employers
to private-sector employers have not been adequately specified to assess the
impact of antidiscrimination activity or affirmative action that has been aimed
at both sectors. In addition, if firms hire and fire within competitive labor
markets, evidence of little difference in the relative wages between workers
in contractor and noncontractor sectors is consistent with either strong or
no effects of antidiscrimination programs: in a competitive market, the wages
of identical labor would be equal in both sectors. Thus, the effects of equal
employment opportunity programs cannot be measured by comparing wages
across sectors as has been attempted in some studies (Smith and Welch,
1977~.
A major problem is that it is difficult to measure the specific effects of
general antidiscrimination laws. In addition, many programs, policies, and
economic events occur contemporaneously. A recent study by Heckman and
Payner (1989) overcomes many of these difficulties by using a variety of
methods of empirical analysis on a single large and important industry, South
Carolina textiles. Their analysis eliminates alternative hypotheses and strongly
supports the conclusion that EEOC and OFCCP were major factors in the
large increase in black employment during the 1960s in an industry that
previously had barred almost all black workers. The Heckman and Payner
study also illustrates, in a positive manner, how difficult it is to isolate the
effects of a few programs or events when many of them are changing at the
same time.
The changes in employment law occurred during a period when rapid
changes in attitudes toward black-white relations were taking place across the
entire nation (see Chapter 3). White Americans during the 1960s moved
from significant verbal resistance of equal treatment of blacks in employment
to overwhelming verbal acceptance. Many public and private institutions of
higher and secondary education opened their doors to more than token
numbers of blacks for the first time, and occupational and earnings upgrad-
ing escalated for many blacks. These signal events did not occur in a vacuum.
318
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BLACKS IN THE ECONOMY
The civil rights movement had been waged long and hard to effect just such
changes. It is beyond the scope of available data to determine unambiguously
the precise numerical contribution of any one event, program, or executive
order. Laws change and, if they are enforced, those laws change people's
attitudes and behavior, as well as social institutions, or a social crisis emerges.
Laws do not and cannot rely entirely on direct enforcement. If a society is
to function, its justice system must depend to a large extent on voluntary
compliance, although this must often be backed by governmental threat of
sanctions.
Title VII has had a tremendous effect on behavior in the U.S. labor
market. The EEOC and private individuals and organizations have taken
hundreds of Title VII discrimination cases to the federal judicial courts.
These cases have produced dozens of important judicial rulings that changed
the behavior of employers and unions toward blacks and other discriminated
groups (Taynes et al., 1986~. Many employers charged with discrimination
modified their personnel procedures extensively even before the cases were
decided. Other employers altered their procedures after observing companies
in their industry being charged with violation of employment discrimination
statutes. Major legal changes have occurred in seniority rules, hiring and
promotion practices, and even in what constitutes labor market discrimina-
tion and have had wide-reaching effects on blacks' relative position in the
labor market. These legal changes and their enforcement altered the social
context of hiring, firing, and promoting. Firms in the private sector as well
as local, state, and federal governments designed and instituted equal em-
ployment policies and affirmative action plans (Burstein, 1985; Marshall et
al., 1978; Wallace, 1984:25~.
Other important supporting evidence for the positive effects of EEOC laws
and enforcement is contained in case studies of litigation involving unions
and large employers. Cases producing consent decrees-such as a landmark
agreement between AT&T, the EEOC, the U.S. Department of Justice, and
the U.S. Department of Labor-provide specific examples of how equal
opportunity employment has positively affected blacks' employment posi-
tion (Wallace, 1985~.
In summary, while we cannot determine with the available data the precise
numerical effect of antidiscrimination programs, the evidence does show
positive effects. General changes in race relations, educational improvement,
the state of the economy, and government policies that facilitate these factors
and provide incentives for the equal employment opportunity of minorities
have each had an important role in determining blacks' labor market status.
SOCIAL NETWORKS AND JOB OPPORTUNITIES
Increases in the concentration of urban poverty among blacks (see above)
has been especially damaging to the opportunities available for black youths.
Highly concentrated poverty areas can be distinguished from other areas not
merely by the race of the residents but, more importantly, by the kinds of
319
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A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY
access that the residents of these neighborhoods have to jobs and job net-
works, availability of marriageable partners, involvement in quality schools,
and exposure to conventional role models (Anderson, 1986; Clark, 1965;
Wilson, 1987) . When urban analysts speak of the "ghetto underclass," they
refer to these extreme areas of poverty. Very few whites, even poor whites,
live in extreme poverty areas. The effects of adverse opportunities and per-
verse incentives on young black women and men can be seen in all of the
data presented above.
The data analyzed from an early 1980s National Bureau of Economic
Research (NBER) survey of young black men (aged 16-24; see note 5 above)
identify many of the severe economic problems confronted by black youth
in the most poverty-stricken areas of U.S. inner cities. As reported by
Freeman and Holzer (1986:8), extensive analysis of these data found:
[Black youths living in the poorest areas of inner cities were] much more
likely to be unemployed and less likely to be employed than white youths
or all black youths. They tend to have slightly lower wages than other
youths and they work fewer weeks per year. In addition, those youths have
far worse family backgrounds than others. One-third of them live in public
housing; almost one-half of them have a family member on welfare. Only
28 percent of them have an adult man in their household.
Two particular effects stand out in relation to the employment of black
youth. First, employment and labor force participation rates are especially
low among inner-city black youths from households below the poverty
income line (Freeman and Holzer, 1986~. Second, young blacks with 12 or
fewer years of education report earnings and occupations below those of
equivalently educated whites. In contrast, the earnings and occupations of
college-educated black youths are much more comparable to those of simi-
larly educated young whites (Taynes et al., 1986) .
Investigators of the NBER data reported that much of the unemployment
of the most disadvantaged black youths is due to two facts: they are fre-
quently unemployed for long periods of time, and once out of work they
have a very difficult time finding another job. Twenty percent of the young
black men in the sample who were out of school experienced periods of
joblessness that lasted longer than 1 year. And the durations of these periods
of nonemployment do not appear to shorten with age (Freeman and Holzer,
1986:9; see also Clark and Summers, 1982~. These employment problems
are likely to continue as black youths age. Freeman and Holzer (1986:9)
estimated that "if the rate of increase in employment with age remains at
the level of the 1970s, the cohort of inner-city black youths 18 to 19 years
old in 1979 will not achieve a rate of emolovment of 80 percent until they
reach their mid-thirties."
~,
1
Social networks and differential methods of job search are linked to the
declining employment opportunities for poor black youths. Geographical
dispersion of industry has probably contributed to an intensified competition
for jobs at a time when the labor supply of women has increased and real
320
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BLACKS IN THE ECONOMY
wages have been generally falling (Bor~as, 1986~. As a result, the importance
of social networks for gaining information about and access to jobs has
probably been magnified. Many young blacks are outside the principal em-
ployment networks because of residential and educational segregation and
resulting social separation.
A number of studies have found that young blacks and whites often use
different techniques of job search. Blacks more often walk in and apply.
Whites are more often referred by friends and relatives or public employment
agencies. The search techniques of blacks are likely to lead to lower paying
jobs. Higher paying positions for both high school graduates and college-
educated youths are usually filled through informal social networks, to which
blacks, especially those from poor inner-city neighborhoods, are not con-
nected (Braddock and McPartland, 1987; Bradshaw, 1973; Culp and Dun-
son, 1986; Holzer, 1987~. These different search techniques are related to
the fact that blacks and whites have separate social ties and networks. Young
blacks have ties to other blacks who, like themselves, have attended predom-
inantly black schools and lived in black neighborhoods. Older black males-
concentrated in blue-collar jobs in now-declining manufacturing industries-
are of little help to young blacks seeking jobs in service industries today.
Braddock and McPartland (1987) report that the quality of employment
blacks obtain is correlated with the racial composition of their social net-
works. Specifically, they found that blacks who attended racially mixed
secondary schools are more likely to reside in racially mixed neighborhoods
and work in racially mixed environments. They also earn more. If they go
to college, they are more likely to attend racially mixed colleges. In short,
they concluded that for blacks (Braddock and McPartland, 1987:11) "seg-
regated networks lead to poor paying, more segregated jobs (it is better on
the average to depend on some other job-search technique), and desegre-
gated networks lead to better paying, less segregated work. "
Interestingly, this association did not show up for black women. A possible
explanation may be that black females gained access to expanding nonper-
sonal service employment and clerical opportunities during the 1950s and
1960s when fewer white females were in the labor force. The social employ-
ment networks of black females may therefore be more helpful to young
black women attempting to gain access to clerical positions and other white-
and pink-collar jobs.
Employers appear to devalue diplomas granted by predominantly black
high schools. Employers may also associate young black males with "criminal
behavior or aggression" (Braddock et al., 1986:21; see also Anderson, 1980,
1986~. Such kinds of attribution may arise in social contexts in which a
person has to decide on incomplete information whether to serve or hire or
admit another. A job decision may go against a black youth, for example,
simply because in the absence of specific evidence to the contrary, black
youths are statistically more likely than whites or older adults to be poorly
educated, inexperienced, unreliable, and even to have a criminal record. This
sort of probabilistic prejudgment is unfair to an individual black to whom is
321
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A COMMON DESTI NY: BLACKS AN D AMERICAN SOCI ETY
incorrectly attributed the characteristics of others, and it can lead to self-
perpetuating circles. The victims of such prejudgments in hiring lose the
experience and the references that would make them employable. They may
turn to activities and life-styles that justify the stereotype and raise the
adverse odds that similar blacks encounter in the future (see Anderson, 1980,
1986; Freeman and Holzer, 1986:14~.
Poor employment experiences of black youths are due to many factors:
inadequate demand for black youths by employers offering "good" jobs;
discrimination; increased competition from white women who entered the
labor force in great numbers during the late 1970s; and the relatively poor
educational preparation of many black youths. Many young blacks thus
move in and out of low-paying jobs that offer little advancement potential.
Black youth, like white youth, appear willing to accept these jobs only as a
temporary relief. As Holzer (1986:65) noted, the potential of public- or
private-sector programs that offer more low-paying, dead-end jobs cannot be
effective as a means of improving the employment conditions among disad-
vantaged young blacks. Minimum-wage employment opportunities appear
to be reasonably attainable. If the better employment opportunities to which
many blacks aspire (see Chapter 10) are to be realized, there will need to be
substantial improvements in the education and training opportunities avail-
able to black youth.
Several employment and training programs whose objectives are enhancing
the long-term employment and earning opportunities available to disadvan-
taged people have been initiated by federal and local governments since the
early 1960s. These programs have been very diverse in their approaches and
in their targeted client groups. The same may be said for the research
strategies used to evaluate such programs and their cost-effectiveness; for
recent reviews of the large literature, see Bassi and Ashenfelter (1986), Betsy
and colleagues (1985), Rees (1986), and Sawhill (1988~.
Conclusions about the overall effectiveness of the large and diverse set of
employment and training programs have been mixed. For example, Bassi
and Ashenfelter (1986) concluded that, on the whole, the programs Dad
been neither overwhelmingly successful nor ~ great failure. Two kinds of
programs stand out as notably ineffective and notably elective. ~norr-rerm
programs that emphasize work (on-thejob) experience alone appear to be
among the least effective: clients' opportunities after such programs are
_ . _
am,
~1 1 ~, · ~1 . . __
1 1
virtually the same as they were before the program. Since low-skilled, disad-
vantaged workers are likely to be placed only in low-paying, non-career-
oriented jobs, this finding seems unsurprising (Burtless, 1984; Sawhill, 1988~.
In contrast, one kind of program that appears particularly effective has
been those that provide very intensive remedial education and job training
for youths, particularly the Job Corps. Although the Job Corps is quite
expensive relative to short-term programs, it has frequently been found to
have benefits significantly greater than its costs. The most positive effects
have been on the employment and earnings of black participants. Positive
effects are generally reported for black males and females, and especially
322
OCR for page 323
BLACKS IN THE ECONOMY
young males, but not for whites (see Betsey et al., 1985; Burtless, 1984;
Rees, 1986; Sawhill, 1988) .
There are no satisfactory substitutes for a vigorous and expanding economy
and an effective public school system to achieve an educated and employed
work force. However, as complements to these important goals, intensive
remedial education and job training programs are the most effective methods
for ameliorating the very serious problems currently affecting the labor mar-
ket condition of large numbers of poorly educated and disaffected black
youths.
CONCLUSIONS
Changes in labor market conditions and social policies of governments
have had great effects on the economic status of black Americans. Yet the
current economic prospects are not good for many blacks. Adverse changes
in labor market opportunities-falling real wages and employment, increases
in one-parent families with one or no working adults-have made conditions
especially difficult for those blacks from the most disadvantaged back-
grounds. However, changes in family structure have not been a major cause
of continuing high poverty rates since the early to mid-1970s; rather, lower
real wages of men and women have increased the difficulty of rising from
poverty through employment. This factor of lower real wages in recent years
can be seen in the halt in reductions in poverty rates among all Americans.
Overall, from 1940 through roughly 1970, black Americans experienced
sometimes erratic but generally significant improvements in their relative
economic status: average earnings of men and women, per capita and family
incomes, and measures of occupational status generally all rose relative to
those of whites. While black women's earnings have reached near parity with
those of white women, women's earnings lag behind men's. After the early
1970s, black gains in relative earnings and incomes slowed and then deteri-
orated for many indicators of average status (e.g., annual male earnings, per
capita and family incomes). In particular, men's earnings and other aggregate
measures of black income were, relative to white measures, lower in the mid-
1980s than in 1970 and in many cases no greater than the levels reached in
the 1960s.
An important explanation for these developments is that while the occu-
pational positions and hourly wages received by employed blacks have con-
tinued to improve relative to whites, blacks' relative employment has fallen
significantly. As a consequence, incomes and aggregate measures of earnings,
being largely composed of the product of wages and employment, have not
kept up with gains in wages. Reductions in relative levels of employment
since 1970 for both black adult men and women have arithmetically been
due primarily to higher unemployment rates. Although available data do not
provide a definitive explanation for the particularly low employment rate of
323
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A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY
black men, the data do suggest that adverse changes in the demand for less
educated workers had an especially important role in the employment status
of black men.
One effect of the improvement in blacks' occupations and wages for those
who are employed has been the development of an appreciable black middle
class that exists in the presence of a large percentage of low-status blacks
whose condition has persisted through periods of recession and prospenty.
As this chapter shows, the economic fortunes of blacks are strongly tied
(more so than those of whites) to a strong economy and vigorously enforced
policies against discnmination. Without these conditions, the black middle
class may persist, but it is doubted it can grow or thrive. And the position
of lower status blacks cannot be expected to improve.
Improvements in blacks' relative economic status have been primarily due
to sustained economic growth and blacks' migration to higher wage sectors
of the economy (1940-1973), rising levels of black education, vigorous
enforcement of equal opportunity laws and employment programs that ben-
efited blacks, and overall improvements in attitudes toward race relations in
the economy. When these important factors have not been present, blacks
have not generally made progress in their relative economic status.
.
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328
Representative terms from entire chapter:
black women
