America Becoming Racial Trends and Their Consequences: Volume II (2001) / Chapter Skim
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5. Racial Differences in Labor Market Outcomes Among Men
5. Racial Differences in Labor Market Outcomes Among Men
Pages 98-123
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From page 98... ...
Table 5-1 lists differences in the ratios of relative wages based on 98
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From page 99... ...
Data indicate that the deterioration in earnings relative to Whites was greatest among young Black men with a college degree; but the deterioration in absolute terms was much greater among the less educated Kuhn et al., 1993; Bound and Holzer, 1996) , and reflected the dramatic
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From page 100... ...
The deterioration continued into the late 1970s and 1980s, during which time relative wages were also deteriorating. Of course, employment and unemployment rates for both Whites and Blacks follow a strong cyclical pattern, and both groups showed strong improvement in the late l990s.
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From page 101... ...
Table 5-4 presents relative wages for various groups of Hispanic and Asian men in 1979. The unadjusted ratios show raw differences in means between various ethnic groups and White males; the adjusted ratios adjust for differences in education level, age, region of residence, English proficiency, etc.
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From page 102... ...
However, the relative importance of educational and language deficiencies among some groups of Hispanic and Asian men has grown over the past few decades, as large numbers of less-educated immigrants have arrived in the United States. This largely accounts for the fact that overall educational attainment and earnings for Hispanic men fell over the past 20 years (Council of Economic Advisers, 1998~.
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From page 103... ...
Reprinted with permission from George Borjas, John F Kennedy School of Government, Harvard University.
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From page 104... ...
The dramatic progress made by Black men during the 1960s and early 1970s also seems to reflect rapid improvements in their quantity and quality of education and occupational status, as well as in relative earnings within education and occupation groups. Much of this improvement can be tied to social and economic changes induced by the Civil Rights Acts of 1964 and 1972 (Freeman, 1981; Heckman and Payner, 1989; Chay, 1995~.
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From page 105... ...
Thus, as Blacks remained more concentrated among the less-educated and less-skilled groups, they were likely disproportionately hurt when the relative earnings of men in the less-educated, less-skilled groups declined (luhn et al., 1993~.2 Furthermore, differences in educational attainment and test scores together may account for most of the racial 1Although Affirmative Action requirements of federal government contractors were first introduced by Executive Order 11246 in 1965, enforcement of these provisions was limited until the late 1960s and early 1970s. Similarly, changes in the enforcement of the Civil Rights Act, such as the use of class-action suits after 1972, likely contributed to the economic effects of the act as well.
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From page 106... ...
Although Black males were no more heavily concentrated in manufacturing jobs nationwide than were White males in the 1960s, they were more heavily concentrated in manufacturing jobs in the urban Midwest. Declines in manufacturing and union membership help account for the particularly strong declines in Blacks' relative employment and earnings in the Midwest since 1970 (Bound and Freeman, 1992; Bound and Holzer, 1993, 1996~.
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From page 107... ...
-1 forms with the federal government, unless they have federal contracts. Suburban firms are also less likely to be monitored, and are therefore less likely to be found in violation of antidiscrimination statutes, as they receive fewer Black applicants and have fewer Blacks in their relevant local labor markets (Bloch, 1994~.
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From page 108... ...
These facts are likely to have a number of implications for the labormarket performance of Blacks, especially those with lower incomes. For one thing, residential segregation seems to be associated with lower educational attainment and lower employment outcomes (Cutler and Glaeser, 1997~.
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From page 109... ...
Limited information about firms and job openings in these areas seems to play some role as well (Ihlanfeldt, 1997; Raphael et al., 1998~. Expectations, Alternative Income, and Illegal Activity Declining employment rates among young Black men in the 1960s and 1970s, even while their relative wages were improving, suggest that shifts in labor supply away from the low-wage labor market might have contributed to their declining employment in this and later periods.
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From page 110... ...
Finally, if the current level of labor-market tightness can be sustained for some period of time, it might have longer term effects on labor-market outcomes for Black men, as occurred, for example, during World War II. Discriminatory behavior seems to decline in tight labor markets, as employers are willing to hire workers whom they otherwise would not consider.
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From page 111... ...
Whether current low rates of inflation can be sustained with unemployment rates lower than 5 percent is unknown, but the important benefits that accrue to disadvantaged groups such as Black men from tight markets must not be lost in the evaluation of these tradeoffs. Education and Skill Development Over the long term, enhancing the skills and employment credentials that young Black men bring to the labor market must be a top priority.
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From page 112... ...
The up-front costs of these interventions might be high. Structure and communication of expectations might be critical as well (American Youth Policy Forum, 1997~.
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From page 113... ...
Evaluations have indicated positive effects on the employment and earnings of minority participants (Melendez, 1996~; however, CET primarily serves disadvantaged Hispanics and their community, and it remains unclear whether this model would work for other groups, such as Black males. Local economic development assistance, which has traditionally occurred through "enterprise zones," but which more recently can involve support for a broader range of institutions and services, is not inconsistent with this approach (Giloth, 1997~.
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From page 114... ...
Furthermore, some investigation is needed of how alternative university admission mechanisms affect educational and employment outcomes of minorities. One such mechanism is affirmative action based on family income rather than race/gender, which has been analyzed by Kane (1995~.
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From page 115... ...
Reducing Crime/Helping Incarcerated Youth As noted above, crime reduction could have quite positive implications for young Black males in the labor market, if employers, both White and Black, become less fearful of them and become willing to employ them. Of course, this assumes that crime reduction can be accomplished in fair and racially unbiased ways (Kennedy, 1997~.
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From page 116... ...
What Are the Specific Mechanisms by Which Differential Labor Outcomes Occur? Although there seems to be little doubt about the overall importance of factors such as skills, spatial location, and racial discrimination in the labor market for Black men, the exact mechanisms by which these effects operate remain somewhat unclear.
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Reinoso 1994 Measuring employment discrimination through controlled experiments. Review of Black Political Economy 23(Summer)
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Holzer 1993 Industrial shifts, skill levels and the labor market for Black and White males. Review of Economics and Statistics 75(November)
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1981 Black economic progress since 1964: Who has gained and why? In Studies in Labor Markets, S
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1986 Reservation wages and their labor market effects for White and Black male youth. Journal of Human Resources 21(Spring)
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1998 Is the labor market tighter outside of the ghetto? Unpublished manuscript, Georgia State University.
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Quigley 1996 Spatial effects upon employment outcomes: The case of New Jersey teenagers. New England Economic Review (May/June)
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1997 Private school vouchers and student achievement: An evaluation of the Milwaukee Parental Choice program. Working paper, National Bureau of Economic Research.
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