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A Common Destiny: Blacks and American Society (1989)

Chapter: Blacks in the Economy

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Suggested Citation:"Blacks in the Economy." National Research Council. 1989. A Common Destiny: Blacks and American Society. Washington, DC: The National Academies Press. doi: 10.17226/1210.
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6 BLACKS IN THE ECONOMY 269

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

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

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

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

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

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

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

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

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

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

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY FIGURE 6-2 Poverty rates of black and white families and odds of being in poverty, by household type, 1959-1986. (a) Family headed by a man. 100 90 80 LL Zoo 70 > 60 o ILL 3= So LL m Z 40 llJ 30 20 10 o (a) Family Headed by Man - J~ Relative Black/White Odds /1 l of Being V V \in Poverty l _,; ...... White ~~ - - Black 1 1 1 1 1 1 1959 1964 1969 1974 1979 1984 YEAR Source: Data Tom decennial censuses and Current Population Surveys. 8 7 6 > o ILL - Z LU m IL o en 4 ~ o > 3 Lu 1 families with an adult male include a second adult; very few female-headed families do. For both races and for both types of families, poverty rates declined between 1959 and 1973 and have fluctuated narrowly since then. For each family type, the odds of being impoverished have improved some- what more for blacks than whites since the early 1970s. This good news was offset by bad news: the proportion of blacks in female-headed, single-parent families, always more prone to poverty than two-adult families, increased much more than among whites. 280

BLACKS IN THE ECONOMY FIGURE 6-2 (b) Family headed by a woman. 100 90 80 G > 60 o ILL ~ 50 LL m o 8 (b) Family Headed by Woman Black 30 White 1 i 20 - Relative Black/White Odds of Being In Poverty 10 _ V 1 1 1 1 1 1959 1964 1969 1974 1979 1984 _ : YEAR 7 6 by Ad 111 m o an o > 3 LL 2 However, as serious as this trend is, it was not an arithmetically important factor in the overall increase in black poverty since the early 1970s. Had black family structure remained the same as in 1973, the percentage of poor black children would have fallen from 41 to 38 instead of rising to 43, and poverty among blacks aged 18-64 would have fallen from 24 to 23 percent instead of rising to 25 percent. Rather than family structure, it is low earnings that have led to increased poverty since the 1970s. Many intact black families 281

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY are poor because the two adults heading them have very low earning capaci- ties. Likewise, many single-parent families would remain poor if there were two adults present. CURRENT CONDITIONS Demography Factors Black-white differences and similarities in the demography and economics of poverty are noteworthy. In 1985, one-third of the black poor, compared with one-sixth of the white poor, were children in families headed by a woman. About 25 percent of the black poor, in contrast to less than 7 percent of the white, were adults-mostly women-in families headed by women. Compared with blacks, a high proportion of white poor live in husband-wife families or were persons aged 65 and over (Farley, 1987~. Figure 6-3 shows the poor populations, black and white, by seven age-family . . c. :laractenstlcs . Figure 6-3 also shows the distribution of the black and white poor popu- lations in 1970. The changes illustrate the feminization of poverty and the shift to childhood poverty during the past 15 years. Children under age 18 made up less than 20 percent of the poor black population in 1970, but more than 45 percent in 1985. Among whites, the change was from about 10 percent to about 40 percent. These changes in the demographic structure of poverty were attributable to the sharp changes in family living arrange- ments, to modest declines in poverty among husband-wife families (see Figure 6-2), and to quite substantial declines in poverty among the elderly as Social Security benefits improved their living standards (see Danziger and Weinberg, 1986~. In 1986, median black family income was 57 percent of the white family median. However, as Table 6-2 indicates, the ratio vanes considerably by type of family, with female-headed families behind two-parent families. Black marred-couple families had nearly 3 times the income of black female- headed families, and white marred-couple families had twice the income of white female-headed families. Among female-headed families, 52 percent of black and 27 percent of white were poor in 1984. TABLE 6-2 Median Family Incomes, by Race and Family Type, 1986 Family Type - All families Married couples Wife in labor force Wife not in labor force Male head, no spouse present Female head, no spouse present Source: Data from Current Population Survey. $17,604 26,583 31,949 16,766 18,i31 9,300 Black White Black/White [Ratio $30,809 33,426 38,972 26,421 26,247 15,716 0.57 0.80 0.82 0.63 0.71 0.59 282

BLACKS IN THE ECONOMY The Working Poor Some forgotten victims of poverty are low-wage workers, who are also more vulnerable than other workers to periods of unemployment. Their numbers and their incomes are extremely sensitive to economic swings. Recent research suggests that a significant proportion of poor two-parent families have a full-time worker. No matter how poor they are, they do not qualify for much public aid. They may get food stamps, but the benefits are small (less than 60 cents per person per meal in 1986 for families with incomes one-half of the poverty line). Moreover, participation is low among eligible working poor families. These families seem to be helped by economic growth, but they have suffered disproportionately during the slow growth and severe recessions of the recent past (Danziger and Gottschalk, 1986a). Many have limited health protection, and most do not qualify for Medicaid. The United States is virtually alone among high-income countries in having no general provisions to protect the well-being and health of children. Unemployment is becoming a more serious source of poverty and of medical indigency. A surprisingly large number of unemployed low-income workers get no unemployment insurance benefits. Danziger and Gottschalk (1986b) report that only 28 percent of unemployed household heads who had previously earned below $5.50 per hour received unemployment bene- fits in 1984, while 54 percent of those with higher wages received such benefits. The authors do not provide separate tabulations by race, but since blacks are disproportionately found in low-wage jobs, they are likely to be particularly affected. The unemployment insurance system seems to be pro- viding less and less support over time: according to government figures, the fraction of unemployed workers who are covered has fallen from a high of 75 percent during the recession of 1975 to 34 percent in 1984. Danziger and Gottschalk conclude that low-wage workers have been hurt the worst. Two-parent families with an unemployed parent qualify for some welfare in half the states, but participation and benefits are low in most of those states. Geography Factors The geographic distribution of black and white poor populations is not alike. Figure 64 presents information about the locations of the black and white poor in 1986. Compared with poor whites, poor blacks are more likely to live in central cities and in neighborhoods where a high proportion of residents are poor: approximately 57 percent of the black poor and 34 percent of the white poor resided in central cities. The majority of whites below the poverty line lived in suburban and nonmetropolitan areas. Figure 64 also shows that more than 2 of 5 of the black poor in 1986 were residents of census tracts in which one-fifth or more of the noninstitutional popula- tion lived in poverty. Fewer than 1 of 6 poor whites lived in census tracts with such high concentrations of poverty. As a consequence, poor blacks, to a much greater degree than poor whites, interact mainly with other 283

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY FIGURE 6-3 Poverty distribution, by race, age, and living arrangements, 1970 and 1985. 1 970 Blacks Under 18 Other living arrangements 18 to 64 1.0% Husband-wife / Under 18 Y Fema e headed ~ 9.6% Under 18 ~ Husband-wife family 8.1% 18 to 64 ~..~ ~.~ 65 and over Female headed '_ · ~ ~ ~ 7 po 22.3% 18to 64 Other living arrangements 1 1.9% (Poverty Population, 7,680,000) 1 985 Under 18 Female headed family Under 18 34.6%~ arrangements lo. : - : - : - :~ 2.3% 18 to 64 Husband-wife ~ family 1 1.1 % W\\\\~ 1 8 to 64 Female headed family 25.8% Under 18 Husband-wife '< family 1 0.0% 65 and over 7.4% 18 to 64 Other living arrangements 8.8% (Poverty Population, 8,926,000) Source: Data from decennial census and 1985 Current Population Survey. disadvantaged people. Black poor children attend schools with other poor children, go to churches with impoverished congregations, and deal with merchants geared to do business with a poor clientele. Racial segregation in residence reinforces the effects of economic separation. Table 6-3 presents data for the 14 metropolitan areas with the largest black populations in 1980, a year in which the census reported that 30 percent of blacks and 9 percent of whites were below the poverty line. It shows the average proportion of the total population that is poor in the census tract of 284

BLACKS IN THE ECONOMY FIGURE 6-3 (Continued) 1 970 18 to 64 Whites 18 to 64 Husband-wife family I Female head 9.8C/o ~- 18 to 64 ' arrangements 16.2% (Poverty Population, 18,935,000) 1 985 18 to 64 - Under 18 Female headed family Under 18 ~ O% H u s b a n d -w i f e ;\\\\\\\' ~ family ~ 65 and over 32.4% Under 18 Husband-wife family , 21.3% ~.O''\' 18 to 64 /-~ 18 to 64 Female headed Other living family arrangements 6.9% 15.2% Under 18 Other living arrangements 0.7% - Under 18 Husband-wife family 6.1% 65 and over 12.0% (Poverty Population, 22,860,000) a typical poor black or white person. In Dallas, for example, poor blacks lived in areas where about one-third of the population was impoverished, poor whites in areas where about one-tenth was below the poverty line. Poor blacks face a density of poverty 3 to 4 times higher than that for poor whites. To the extent that escaping from poverty may be facilitated by living in more prosperous neighborhoods, poor whites have a great advantage over poor blacks. Racial differences remain significant even for comparable family structures and residential locations. It could be that proportionately more blacks than whites are poor because relatively more blacks fall in demographic categories 285

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY FIGURE 6-4 Poverty distribution, by race and place of residence, 1986. Blacks Central-City Poverty Area r 42.8% ~. ~ Other Central City Area 1 4 4o Suburban Poverty Area 7.7% ~,;,,.o.. -. .,.o~; c. ~ .,. C.,;. ,\ Other ~U~UI~til~/ Area 10.1% Suburban Poverty Area 4.7% Other Suburban Area 29.2% Non metropolitan Area 25.0% (Poverty Population, 8,953,000) Whites Other Central City Area 19.3% Central-City Poverty Area 1 4.7% a _ ANonrnetropolitan 32.1% (Poverty Population, 22,183,000) a Census tracts in which the poverty rate is 20 percent or higher. Source: Data from Current Population Surveys. 286

BLACKS IN THE ECONOMY TABLE 6-3 Concentration of Poverty in Major Metropolitan Areas by Race, 1980 Average Percentage of Population Poor in Census Tract of Typical Poor Person Metropolitan Area Black White l New York 36 20 Chicago 35 12 Los Angeles 29 16 Detroit 31 11 Philadelphia 37 12 Washington, D.C. 23 8 Bali~rnore 34 11 Houston 29 10 Atlanta 32 10 Dallas 33 11 Newark 35 13 San Francisco 29 12 St. Louis 32 10 New Orleans 38 11 Average 32 12 Source: Data Tom 1980 decennial census. with high rates of economic deprivations-female-headed families, residents of central cities and poverty areas, and people with low educational attain- ment. Blacks do have these demographic characteristics more often than whites, but, in every category, the poverty rates for blacks are 2 to 3 times those of whites with similar characteristics (see Table 6-4~. The first two columns of Table 64 show that blacks, more often than whites, were young, lived in central cities, and were unemployed. These characteristics alone contribute to the poverty rate of blacks; however, the proportion below the poverty line in each category was much higher for blacks. Among those in central cities, 31 percent of blacks were poor, compared with 14 percent of whites. Of black households headed by an adult with only 1-3 years of high school education, 36 percent were poor, compared with 15 percent of similar white households. Of white households headed by a person who worked full time for 50 or more weeks in 1985, 3 percent were poor, compared with 7 percent of similar black households. INCOME AND WEALTH SOURCES OF INCOME Total real income per person is the single most useful measure of the economic resources and the standard of living of a population. The 1984 per 287

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY TABLE 6~ Poverty Rates and Distributions of Black and White Populations by Various Demographic Characteristics, 1985 Percent Distnbuiion of Total PopuL~rlon Percent Below Poverty Line, 1985 Demographic Charactenstic Black White Black White Age Under 6 6-15 16-21 22 41 45-54 55-64 65 and over Region Northeast Midwest South West Place of residence Central cities Suburban rings Nonmetropolitan areas Educational attainment of household heads (aged 25 and over) Less than 8 years 8 years High school, 1-3 years High school, 4 years College, 1 or more years Work expenence of house- hold head Worked 50 or more weeks Full-time Part-time Worked fewer than 50 weeks because of: Unemployment Other reasons Did not work in 1985 11 18 13 11 9 37 37 8 7 8 17 19 55 9 57 25 18 10 10 12 21 26 32 21 27 50 23 13 6 6 11 37 40 19 37 26 46 59 10 10 30 8 8 31 38 36 56 46 43 35 23 20 25 31 24 36 34 22 31 22 42 34 37 36 27 18 16 13 9 7 8 11 9 11 12 12 14 7 15 23 13 15 11 3 3 12 20 14 18 Source: Data from Current Populaiion SunTeys. capita personal income (before taxes) of the black population was $6,277, which was 57 percent of the $10,939 per capita income of the white popu- lation. Although the black/white ratio was 18 percentage points higher than the 1939 figure of 39 percent, virtually all of this gain was achieved by the end of the 1960s. From 1969 to 1984, white income increased 22 percent, and black income increased 26 percent. Total personal income includes wages and salaries, self-employment in 288

BLACKS IN THE ECONOMY come, and "unearned" income. The last component is composed of income derived from property (interest, dividends, and rent) and transfer income (Social Security and other retirement benefits, family assistance benefits and supplemental security income, unfunded private pensions and annuities). Wage and salary income is the most important component of income for both blacks and whites, but the proportion of adults receiving this type of income has been increasing for whites and decreasing for blacks (Taynes et al., 1986~. The same is true of self-employment income. Those important sources of income are discussed below when we examine changes in blacks' earnings, employment, and occupations. Unearned income has increased in importance for both whites and blacks. From 1967 to 1984, unearned income increased as a percentage of total income from 13 percent to 19 percent for blacks, and from 12 percent to 21 percent for whites. The proportion of blacks receiving property income has increased greatly over the past two decades, but black mean income from this source fell relative to whites by 6 percentage points from 1970 to 1984. In 1984, blacks, who are 11 percent of the population, received 2 percent ~ . Or property income. Blacks are relying increasingly on transfer payments, in particular on Social Security and other pensions. They are not increasingly dependent on family assistance benefits; such income has remained a fairly constant share of total black income, about 7.5 percent, since 1970. In 1984, 23 percent of black adults and 5 percent of white adults received some form of family assistance. PUBLIC ASSISTANCE AND OTHER BEN EFITS Public assistance plays an important role in the support of some low- income families. Most of this support goes to single-parent families. For healthy nonelderly adults without children, there is little public assistance. Even poor two-parent families with children qualify for little help, mostly from food stamps and a few other federally sponsored programs. Family assistance benefits (chiefly Aid to Families with Dependent Children, AFDC) is virtually confined to single-parent families. This support expanded consid- erably in the late 1960s and early 1970s. But benefits are not indexed to inflation, and their real value has fallen by at least 30 percent since 1973. Benefits are below the poverty line in virtually every state, although there is considerable state-to-state variation. In 1986, for example, benefits for a family of 4 varied from a high of $698 per month in California to a low of $144 per month in Mississippi. In the median state, combined benefits averaged just over $500 per month for a family of 3 in 1986, less than 75 percent of the poverty line. In several southern states, benefits were roughly one-half the poverty level. Recent research suggests that only a minority of those who ever use AFDC will do so for an extended period, but dependency appears to be quite long term among certain groups and has become a major public concern. Ellwood (1986a) reports that 20 percent of new white and 32 percent of new black 289

A COMMON DESTI NY: BLACKS AN D AMERICAN SOCI ETY recipients will receive AFDC for 10 years or more. This black-white differ- ence is due to some extent to the higher proportions of black recipients in categories more likely to remain long-term beneficiaries. A never-married mother who enters the family assistance system when her child is very young seems particularly likely to receive benefits for a long time. Also, people with limited education or work experience tend to receive benefits longer than the average recipient. These two characteristics are obviously highly corre- lated. A review of the large number of studies that have examined labor-supply effects of family assistance (Moffitt, 1985a, 1985b) suggests that those now on AFDC would increase their average hours of work from 9 hours per week to 14 hours if the program were abolished. Results of the negative income tax experiments (summarized in Burtless, 1987) show that a 10 percent increase in income leads to a 2 percent reduction in work by single parents. Unfortunately, there are no findings available from longitudinal studies that examined the impact of different programs on dependency and work behav- ior over the course of many years. Whether the reported effects are charac- terized as large or small obviously depends on one's point of view. A 5- hour-per week absolute change in labor supply may appear modest, but it does represent a 30 percent reduction in work. Still, the income for 14 hours of work per week, without family assistance, would leave a mother and her children very poor. Single parents must both nurture their children and provide for them economically. While most married mothers now work, part-year or part- time jobs are the norm, with fewer than 30 percent of married mothers working full-time, all year. For poor women, however, part-time work is not a feasible alternative to family assistance benefits, because it would raise net income very little, if at all. Even full-time work would leave a low-wage woman virtually no better off than receiving family assistance. Her benefits are on average 25 percent below the poverty line. If she works, she earns wages but faces benefit reductions and outlays for taxes, day care, transportation, and other work- related necessities. She is often no better off working unless she can earn $5, $6, or even $7 dollars per hour. A report from the U.S. House of Represen- tatives (1987) Committee on Ways and Means shows that a woman working full time at a $5-per-hour job (and thus earning $10,000 in gross pay annually) will have only $1,500 more in disposable income than from family assistance benefits, and she will have lost her government medical protection (Medicaid). Women-or men-working at the minimum wage of $3.35 per hour have almost no additional disposable income. It is not surprising, therefore, that earnings from work seldom provide an escape from family assistance programs. Only about one-fifth of the people who stop receiving AFDC do so because of increases in earnings. It is too hard for most single mothers both to earn an adequate living and to raise their children. As a consequence, marriage is the most common way in which women leave benefit programs. Some analyses suggest that the pri 290

BLACKS IN THE ECONOMY mary reason never-married mothers stay on AFDC longer than women who are divorced, separated, or widowed is that they are less likely to marry. The results of recent experiments measuring the effects of work and train- ing requirements on assistance programs have been generally favorable but quite modest. When the programs have been systematically evaluated, the benefits-including the increased earnings of recipients and the value of the work they perform in "workfare" plans-have exceeded the costs. In many experiments, the reductions in program expenditures and the taxes paid by those served were greater than the cost of serving program participants (see Gueron, 1986~. Unfortunately, the overall reductions in family assistance dependency and costs have been quite modest. For example, the job search and workfare programs instituted in San Diego County required family assistance recipients with no children under age 6 to participate in job search workshops designed to help them find work. Those participants who were unable to find private- sector employment were required to do public-sector work as a condition to receiving benefits for a period of 3 months. The benefits of this oroaram exceeded the cost In a carefully controlled expenment, and the program has received national attention. Yet the total impact was quite modest when results for participants were compared with a randomly selected control group. The treatment group, those who participated in the program, earned $700 more per year; annual welfare savings were smaller, averaging $300. Experiments across the country have generated similar findings: annual earn- ings are raised $200 to $750; welfare savings are more modest. Moreover, since the programs typically serve only a small percentage of the people receiving benefits, the overall average reductions in benefit costs are even smaller (Gueron, 1986~. Most workfare programs appear to be reasonable economic investments, but there are no carefully evaluated workfare pro- grams that put more than a tiny dent in benefit caseloads. One group that until recently was all but ignored in the family assistance debate is the absent fathers of the children in single-parent families. Almost two-thirds of all single mothers reported receiving no child support in 1985 from the fathers of their children, and only 11 percent of never-married mothers received such aid. The lack of child support payments essentially means that single mothers trying to be self-sunnortin~ must provide all the ~ ~ ~ 1 1 ~ 1 r .1 r 1 .1 ~ 1 r r . 1 1 1 support tor their lamlly on their own. Lack ot enforcement might also be seen as a signal that fathers, especially the unmarried fathers of children, bear little responsibility for their children. Many of these absent fathers no doubt have limited incomes themselves, but their problems and responsibilities have only recently become the focus of some discussion and research. WEALTH Comparisons of net worth or wealth-defined as total assets minus total debts-shows that black households compare less favorably to white house 291

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY holds in terms of wealth than they do in terms of income. In 1984, per capita wealth for blacks was $6,837, compared with $32,667 for whites. Black householders had a median net worth of $3,397 and white household- ers $39,135, so for every $1 of wealth in the median white household, the median black household had $0.09. Blacks, having lower incomes from which to save, can be expected to have accumulated less wealth. A less obvious finding is that, for comparable incomes, blacks have much less wealth than whites. In 1984, among house- holds with a monthly income of less than $900, the ratio of black net worth to that of whites was 0.01; for those with monthly incomes between $900 and $2,000, the ratio was 0.14; for those with monthly incomes between $2,000 and $4,000, 0.32; and for $4,000 and over, 0.46. Because a much larger fraction of black households is in the lowest income group (40 percent compared with 20 percent of white households), the overall median wealth of white households is more than 11 times that of black households (Brad- ford, 1987:2~. Blacks with high educational attainment compare much more favorably to similar whites than do low-income blacks with modest educational attain- ments. In particular, among college-educated householders age 35 or less with incomes above $48,000 per year, the black/white ratio of median net worth is 0.93. Unfortunately, this group only composes about one-half of 1 percent of black households (Bradford, 1987:3) . It cannot be determined to what extent this favorable comparison will be maintained as this age cohort becomes older. Estimates based on comparisons of older black and white householders with similar education and incomes suggest considerable dete- rioration over time, but such estimates probably underestimate black wealth accumulation possibilities for the younger cohorts. Inequality of wealth among blacks and whites is greater than Is Inequality of income, and both income and wealth are more highly concentrated among black than white households. Most of the higher concentration of wealth among blacks is due to the greater fraction of black households with zero net worth: 13 percent compared with 2 percent for white households. Thus, measuring within groups inequality by the "Gini coefficient" (where G = 1 means complete inequality, all wealth owned by one household, and G = 0 means equality, all households have equal wealth) gives Gini's of 0.687 for black households and 0.616 for whites in 1984. Removing households with zero net worth reduces these measures to 0.629 for blacks and 0.608 for whites, showing that among households with positive net worth, wealth is distributed very similarly in the white and black populations (Bradford, 1987:8~. Including households with negative net worth increases the ine- quality among blacks even more, in comparison with the inequality among whites, to 0.744 for blacks and 0.642 for whites. Asset holdings among black and white households differ considerably (see Figure 6-5~. The proportion of wealth held in interest-earning assets increases with income for both black and white households, but this proportion is higher among white households at all income levels (Bradford, 1987: 10) . Of 292

BLACKS IN THE ECONOMY FIGURE 6-5 Wealth distribution, by race and asset type. Whites (trio) (7%) (1 0%) ~ (21 %) (53oo) (75%) Blacks "E23 Interest-bearing and checking accounts Stocks and mutual funds Business or professional firm or proprietorship EN Motor vehicle (10%) ~ Real estate (6%) ~ Other o, O. ~1%) · a' ~_~8%) Source: Data fiom 1984 Survey of Income and Program Participation. black wealth, 75 percent was in real estate in 1984; 53 percent of white wealth was held in that asset. Less than 1 percent of black assets were in stocks and bonds. Although the comparative figures improve with house- hold income, blacks still hold far less of their wealth in stocks or mutual funds and business equity. Black households have a lower fraction of wealth in retirement assets, such as Individual Retirement Accounts (IRAs), at all income levels. And, inter- estingly, high-income blacks ($48,000 or more per year) hold the lowest fraction of wealth in such assets of all black households, nine-tenths of 1 percent (0.009~. Among high-income white households, these retirement assets account for the highest fraction of wealth held (Bradford, 1987:11 293

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY 12~. This difference may be due to the relative youth of higher income blacks, compared with both other blacks and higher income whites. Overall, the net worth position of black households is very limited in comparsion with whites. One reason may be that more black families have been persistently, not just temporarily, poor, so that blacks have not bene- fited as much as whites from gifts and bequests given by parents and grand- parents. Whatever the causes, the consequences are severe. Lacking assets and borrowing capacities, blacks are ill equipped to cope with economic adversities and to exploit economic opportunities. BLACKS I N THE LABOR MARKET NATIONAL ECONOMIC TRENDS Blacks have a strong interest-stronger than the white majority-in national policies that hold unemployment low and keep the economy expanding vigorously. At the same time, their sensitivity to the nation's macroeco- nomic performance is a symptom of their continuing marginality and inferi- ority in economic status. The sustained rapid growth of the nation's econ- omy during World War II and for a quarter century thereafter was extremely important to blacks' gains in economic status. This growth provided em- ployment options for many blacks, upgraded their occupations, and facili- tated their migration from rural poverty in the South. National and inter- national economic trends since 1973 have been much less benign. The principal data used to examine the labor market experiences of black men, women, and youth over the past 50 years are from the five decennial censuses (1940-1980) and, for 1985, the Current Population Survey. These data refer to individuals, not to families or households. The U.S. economy grew rapidly and quite steadily in the first quarter century after World War II. It slowed down after 1973, battered by oil and energy crises, lagging productivity growth, stagflation, government-induced anti-inflationary recessions, high unemployment, high interest rates, financial disturbances, and international competition. Black economic gains were most substantial during the sustained booms of the 1940s and the 1960s. For example, black women's annual earnings, relative to white women's, gained 15 and 23 percentage points in those two decades, respectively, while black men gained 9 percentage points relative to white men during both decades; see Table 6-5. For both sexes, these two decades thus accounted for nearly all the relative gain of the 45 years. Since 1970, blacks' relative economic position improved only slowly, and since 1980 it has deteriorated. Blacks are acutely sensitive to the expansions and recessions of business cycles. Blacks are disproportionately employed in low-wage jobs, unpro- tected by tenure and seniority, and in manufacturing and other goods- producing industries that are particularly sensitive to business cycles. The oldest plants in central cities are the most vulnerable. An economic down 294

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A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY turn has an immediate impact on black blue-collar workers, especially the many blacks lacking skills, experience, and seniority. Black unemployment rates are on average twice those of whites. Thus, for blacks the 1962-1969 expansion was very good and the recessions of 1970- 1971, 197~1975, 1979-1980, and 1980-1981 were very severe (see Dan- ziger and Weinberg, 1986~. In an economy with high unemployment and stagnating or declining real wages, blacks have encountered greater difficulty escaping from poverty since 1973 than before. Recent structural changes in the U.S. economy have also worked against them. Foreign competition in "smokestack manufacturing" has destroyed jobs in the industries and regions where many blacks had found jobs at good wages from 1940 to 1970. The unions in these indus- tries, notably automobiles and steel, had been particularly open to blacks. Since 1973, the pattern of employment in the U.S. economy has shifted to industries in which black penetration had been and remains lower, and to sectors and regions, especially the South and Southwest, where wages and fringe benefits are lower and unions are weak or absent. The movement of jobs, especially good jobs, from midwestern cities has stranded black resi- dents in the very locations that once drew them, or their parents and grandparents, from the rural South. The changing geographic location of jobs in the nation's metropolitan areas may also be hurting blacks. Nearly three-fifths (57 percent) of the nation's blacks live in inner cities. Many are poorly educated, and low-skill and blue-collar jobs have been leaving the inner cities for the suburbs. There remains considerable debate about the extent to which these geographic changes have had an impact on black employment (Ellwood, 1986b; Kain, 1968; Kasarda, 1985; Leonard, 1987~. The major sources of black gains in earnings and occupation status from 1939 to 1965 were South-to-North migration and concurrent movement from agricultural employment to nonagricultural industries. These shifts were facilitated by high rates of employment, job creation, and output growth (Gwartney, 1970:876; Smith and Welch, 1986~. Wages in the South historically were much lower than in all other census regions for blacks and whites: this is still true for blacks, but not for whites. In addition, black/ white relative wages have been lower in the South. Therefore, when a black migrated from South to North both the migrant's personal wage and blacks' average relative wage increased. Black gains in education also played a role during this period (O'Neill et al., 1986; Smith and Welch, 1986), but migration was much more important. The special importance of migration can be seen in the earnings of males. Between 1939 and 1959, the black/white ratio of mean yearly male earnings rose 9 percentage points (44 to 53 percent) in the nation as a whole. However, in every Census Bureau region, relative black/white earnings rose less than 9 percent. Thus, if there had been no change in the regional distribution of blacks, black/white relative earnings could not have risen by 9 percent. The aggregate increase was due to the migration of blacks from 296

BLACKS IN THE ECONOMY low-wage to higher wage regions. Migration was not so singularly responsible for gains in black women's status. While the South-North wage differential was large for black women, they also made substantial relative occupational and earnings gains in every region from 1939 to 1965 (Taynes et al., 1986~. Black economic gains from migration ended during the late 1960s. How- ever, the decade of the 1960s was a period of great economic advancement for blacks. These gains were largely due to overall employment growth, increases in blacks' relative education, and reduction in racial discrimination (Haworth et al., 1975; Smith and Welch, 1986~. For 1970-1980, black males lost relative ground in all regions except the South, where they contin- ued to gain. Black women reached parity in annual earnings with white women by 1970 in all regions but the South (Farley, 1987~. EARNINGS Black men and women have enjoyed substantial gains in relative earnings since 1939, by several measures (see Table 6-5~. However, the magnitude of these gains and their persistence over time depend on the measure used. For example, two recent reports that focused on the hourly and weekly wages of employed men concluded that black workers made substantial progress in catching up with whites between 1939 and 1979 (O'Neill et al., 1986; Smith and Welch, 1986~. By those measures, the ratio of black to white earnings has risen quite steadily. However, black/white earnings differences have changed less when measured on an annual basis: although the hourly wage rates of black men in 1984 were 72 percent of those of white men, black per capita annual earnings were 56 percent of white earnings. Black men's mean weekly earnings relative to whites' gained 20 percentage points during the 45 years, while their mean per capita earnings gained 14 points. Each of these measures describes some important aspect of labor market status. In our view, however, the most meaningful indicators of general labor market status are annual per capita earnings or mean yearly earnings, because these statistics reflect employment status as well as wage rates. As noted above, blacks are often involuntarily stuck in part-time jobs and are more prone to unemployment than whites and therefore work fewer hours a week and fewer weeks per year. Most striking, the proportion of adult men with no work experience at all during a whole year is much greater for blacks than whites. Measures of earnings based on an entire year reflect these differences. Black women began and ended the 45-year period with the lowest earnings of the four race-sex groups, but their relative position improved significantly. As can be seen from Table 6-5, the weekly wages and yearly earnings of black women grew faster than those of any other race-sex group. In 1939, the weekly wages of black women were 41 percent those of white women, 57 percent those of black men, and 27 percent those of white men; by 1984, the relative wages of black women were 97, 78, and 53 percent, respectively, of white women's, black men's, and white men's. 297

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY Relative wage gains occurred for black women at all levels of educational attainment, but they were largest at lower education levels, and college- educated women advanced the least. This pattern is the reverse of that for black men. By the 1970s, black women generally earned as much on an annual basis as white women of comparable education. However, as we have noted above, black women were more likely to work full-time, and they do not earn as much per week or per hour as comparable white women (Tavnes et al., 1986) . no_' __ _ ~. A. \J _] ~_~ Black women s relative incomes have shown less improvement than their relative earnings. For example, in 1949, black women's mean yearly income of$2,189 was 72 percent of white women's mean of$3,031; 35 years later, black women's $8,622 mean yearly income was 89 percent of white wom- en's $9,682 (Taynes et al., 1986~. One student of the subject summarizes the current situation as follows (Malveaux, 1986:19-20~: Promising aspects of black women's economic status include improvements made since the 1960's, inroads into typically white male occupations, and increased business ownership. But there is a persistence of some patterns: of concentration in low-wage and part-time jobs, of spurts of progress followed by erosion (especially in educational arenas), and of persistent high unemployment. Women's income and earnings in the South is a large part of the overall story, as it is for men (laynes et al., 1986~. Gains have been large in the South, but black women's relative income is still below those in every other region. In 1949, the income of black women relative to white women was lowest in the South, 71 percent-compared with ratios of 88, 86, and 103 percent in other Census Bureau regions. By 1984, when white women in the South had reached virtual parity with white women elsewhere, southern black women's incomes were still considerably below the incomes of non- southern black and white women. The southern black/white ratio of 83 percent was still below every other region's 1950 ratio. Lifetime Expected Earnings Information on earnings over a period even longer than a year, indeed over a whole career, would also be valuable, but there are no individual wage and employment histories for cohorts who became adults in 1940 or 1950, and of course later cohorts are still of working age. However, from the data in each census (or survey) that relate annual earnings to age, as well as to race, sex, and other demographic variables in a given year, one can estimate how much a person would earn in a working lifetime if the person were to receive at each future age the average earnings reported in that year for that age. Summing average earnings for each age over the age groups 20 to 64 gives an estimate of "lifetime earnings." This number is best regarded as a useful summary statistic of earnings and labor market experience in the relevant year, enabling comparisons to be made between years and races. (All the earnings were converted into 1984 constant dollars.) The per capita 298

BLACKS IN THE ECONOMY averages automatically reflect differences in unemployment and labor force . . . partlclpatlon. The estimates of lifetime earnings of men and women are shown in Figure 6-6. According to the census of 1940, a white man who survived from age 20 to 64 could expect to earn just over $300,000; a black man about $125,000. From 1939 to 1969, the earnings of men rose sharply. By 1969, the estimated lifetime earnings of white men reached about $1.1 million, an average of $24,000 for each year of the age span from 20 to 64; per capita earnings of black men increased even more rapidly, reaching about $600,000. The ratio of black/white expected lifetime earnings declined after the early 1970s, reflecting the higher rates of unemployment and slower growth of wage rates for blacks as the actual earnings of each declined.3 Women's lifetime estimated earnings should be interpreted with even more caution than those for men. Adult women are more likely than men to be voluntarily out of the labor force. Although this difference is diminishing, it still exists. Thus, comparisons of women's per capita earnings across ages, census years, and races will reflect different social changes in labor force participation as well as changes in job opportunities and wage rates. Women earn much less than men, a difference accentuated by measuring lifetime earnings. After several decades of increases in the earnings of women, both white and black women in 1984 could expect to earn about 37 percent as much as white men and 64 percent as much as black men during work careers spanning the ages 20 to 64. The black-white gap in per capita annual earnings has all but disappeared among women. In 1970, black women had estimated lifetime earnings that were 91 percent those of white women. The earnings of black women have continued to increase since then, and by 1984 the estimated lifetime earnings of black women were 96 percent those of white women. This near parity obscures some differences: white women are more likely to be out of the labor force, and black women more likely to be unemployed; black women work more hours per week, but about the same hours per year as white women. Effects of Education Black-white earnings differentials by educational attainment changed considerably in the 1969-1984 period, partly as a result of a dramatic down- turn in pay rates. The mean weekly wages of black and white men and women have been lower in the 1980s than they were in 1970. Earnings losses have been greatest for those with the least education. For example, between 1969 and 1984, the real weekly earnings of black women with some 3. These numbers do not allow for probabilities <>f death. Since black men have always had, and still have, lower life expectancies than whites, if these were taken into account, blacks' expected lifetimes earnings would be even lower relative to whites'. (For a different method of estimating lifetime earnings, see Note at the end of Chapter 1.) 299

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BLACKS IN THE ECONOMY high school education, but no diploma, fell 24 percent (from $201 to $152~; the weekly earnings of black women with some college education, but no degree, fell 21 percent (from $308 to $242~. Among black men with some high school education, but no diploma, weekly wages fell 32 percent (from $312 to $213~; while among black men with college training, but no degree, weekly wages fell 20 percent (from $392 to $315) between 1969 and 1984. Decreases in the weekly wages of white men and women were also dramatic (see Table 6-5~. The earnings of well-educated black men rose relative to the earnings of comparatively educated white men during this period (see Smith and Welch, 1986~. In the past, better educated black men earned more than other black men, but there was no evidence that they were closer to their white peers in earnings than those with fewer years of education. For example, in 1949, the average yearly earnings of black men with 8 years of education or less were 56 percent of those of similarly educated white men; the average yearly earnings of black male college graduates were 52 percent of those of white male college graduates. In 1984, in contrast, the average yearly earnings of black male college graduates was 74 percent of those of white male college graduates. Still, black men with college degrees have not attained earnings parity with white male college graduates. According to the 1985 census, the estimated average lifetime earnings of white male college graduates was $1.42 million, $450,000 more than those of black male college graduates. EMPLOYMENT Since 1940, decennial and monthly surveys conducted by the Bureau of the Census have classified adults by their work status. Individuals who held jobs in the survey week-even part-time positions or unpaid jobs in a family business or farm-are considered employed. Those who do not have a job but have made efforts to find work within the last month are considered ?~nem- ployed. The labor force includes the employed and the unemployed. Those who neither had a job in the last week nor had looked for work in the last month are classified as not in the labor force. The latter is a heterogeneous group that includes full-time students, homemakers, and retirees; indepen- dently wealthy persons and others who simply choose not to work; and people who have become discouraged and have given up the search for work. There are several measures of employment. The employment rate is the ratio of employed people to the total labor force. The labor force participation rate is the ratio of people in the labor force to the adult population. The employ- ment/pop?~latton ratio is the product of the employment rate and the labor force participation rate. Two groups with identical labor force participation rates would have different employment rates if their unemployment rates differed. For example, if the participation rate is 80 percent, the employ- ment/population ratio will be 72 percent if the unemployment rate is 10 percent, but 76 percent if the unemployment rate is 5 percent. 301

A COMMON DESTINY BLACKS AND AMERICAN SOCIETY Trends Dunng World War II and for a considerable time span thereafter, more than 9 of 10 black and white men aged 25-54 had jobs. Until about 1970, subsequent fluctuations in this proportion primarily reflected unemploy- ment. Since the 1960s, however, there has been a substantial decline in employment among black men. By the early 1980s, the proportion of black men aged 25-54 who were employed had fallen to fewer than 8 in 10. Among women of that age, there has been a modest increase in the percent of blacks employed, but a much sharper increase among whites. At present, white women are more likely to be employed than black women, primarily because of higher unemployment among black women. The employment/population ratio among all men has declined in recent decades, primarily because of increases in the proportion of men not in the labor force. However, while declining labor force participation is most re- sponsible for the declining participation of both black and white men, the increased percentage of adult black men not working, relative to whites, since 1972 seems to be largely due to a general rise in unemployment. Unemployment has usually been about twice as severe for blacks as for whites. Black men's labor force participation rates were 3.5 points lower FIGURE 6-7 Black and white men aged (a) 16-24, (b) 25-54, and (c) 55 and over who are employed, 1950-1986, and 3-year moving average of relative odds of employment, 1951-1985. 100 95 C) > 85 o J He 75 llJ of ~ 65 oz 55 o 45 L1J AL 35 (a) Men Aged 16-24 '.) ,. Whites _ ~ ~ ~ ,~ \ ~%, - _ ~it, Relative Odds Ratio| ,#]`~ `~ i, , Blacks \_~ ~ u 1950 1955 1960 1965 1970 1975 1980 1985 YEAR Source: Data Mom decennial censuses and Current Population Surveys. 302 2.6 2.4 2.2 O 2.0 ~ oh C] 1.8 ~ O 1.6 > _ _ 1.4 25 Lo 1.2 1.0

BLACKS IN THE ECONOMY FIGURE 6-7 (Continued) 100 95 ~ 85 o AL LL of LL o of LL cr LL 75 65 55 45 35 . . _ of , ~1 1 1 1 to 1950 1955 1960 1965 1970 1975 1980 1985 YEAR 100 Whites =.,~ _ ~ /a__ - ~~ Blacks _ Iax __ / Relative Odds Ratio~ _ _ _ - (b) Men Aged 25-54 2.6 2.4 2.2 LO, 2.0 ~ C] 1.8 O > 1.6 1.4 LL 1 .2 1 .0 95: LL o of LL No 55 LL G LL 85 75 65 45 35 (c) Men Aged 55 and Over 2.6 _ 2.4 _ 2.2 o G 2.0 ~ 1.8 O > 1.6 ~ 1.4 tar Relative Odds Ratio 1950 1955 1960 1965 1970 YEAR 303 1975 1980 1985

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY than white men's in both 1972 and 1986. However, over those years blacks' employment rates fell more than twice as much as whites'. Thus, the differ- ence in unemployment rates is arithmetically why the black employment/ population ratio fell 8 points while the white ratio fell 4.7 points. Age-specific employment trends for black and white men and women from 1950 to 1985 are summarized In Figures 6-7 and 6-8. For each of three groups, those aged 16-24, 25-54, and 55 and over, the figures show the age- standardized employment/populanon ratio on the left scale. The same figures also present the relative black/white odds of employment, a 3-year moving average based on the percentage of white and black population at work. In 1950-1952, the relative odds of being employed to not being employed for men aged 16-24 was 1; that is, equal percentages of young white and black men were at work. In 1983-1985, the odds of having a job for young white men were about 2.5 times those for young black men. Among both young men and young women, the racial gap in employment has grown much larger. In particular, the relative odds of a young black person being employed deteriorated sharply Tom the mid-1960s to the early 1980s. Figure 6-9 summarizes these dramatic changes in the work careers of men and women. It presents estimates of the lifetime labor force experiences of FIGURE 6-8 Black and white women aged (a) 16-24, (b) 25-54, and (c) 55 and over who are employed, 1950-1986, and 3-year moving average of relative odds of employment, 1951-1985. 75 ~ 65 o ~ 55 of ~ 45 3 35 o Z 25 llJ 15 _ OF 1950 1955 1960 1965 1970 1975 1980 YEAR (a) Women Aged 16- 24 - Whites . Relative Odds Ratio: .. ~ ,,/.~"' __ ~ /-\] ,,- ~~ Blacks Source: Data Tom decennial censuses and Current Population Surveys. 304 3.0 O 2.0 oh C) o 1.5 > - 1.0 _ 0.5 'a O 1 985

BLACKS IN THE ECONOMY FIGURE 6-8 (Continued) 75 ~ 65 o ~ 55 LL ~7 LLJ 45 o ~ 35 o Z 25 LLJ 15 75 ~ 65 o ~ 55 LL ~ 45 o ~ 35 11 o z 111 LL (b) Women Aged 25-54 __ . ., . Relative Odds Ratio of 1 1950 1955 Blacks --' ~~ Whites - 1960 1965 1970 1975 YEAR (c) Women Aged 55 and over Blacks 15 1980 1985 Whites Relative Adds Rustic, o ~, 1 1 1 1 to 1950 1955 1960 1965 1970 1975 1980 1985 YEAR 305 ~ 3.0 ~ I; Em O <1: O _ 1.5 > LL _ 1.0 Cal ~ 0.5 ~ O 3.0 2.5 o co o 1 5 llJ > LL 1.0 0.5

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY FIGURE 6-9 Estimated time spent employed and unemployed in a 45-year work career, by (a) men and (b) women, 1940-1985. (a) Men o White Black 0 White Black O White co Black White Black O White no Black it, White 0 hi' Black C:1 Employed 39.1 -~ An////// 364 ~/~//4 39.4 ~/~ = _ 31.7 ~///////////////4 K: 29.4 _/Y//////////////~ _ 1 1 1 1 1 1 1 1 1 0 5 10 15 39.4 20 25 30 35 40 45 NUMBER OF YEARS blacks and whites according to the rates of employment and unemployment observed from 1940 to 1985. These data show how many years a typical person could expect to be employed, unemployed, and out of the labor force from age 20 to age 65. (The estimates assume that a person lives for the entire 45-year span.) Again, these data are best viewed as summaries of the labor market conditions experienced by a group in a given year. They thus provide an excellent framework from which to compare such experi- ences in different years. In 1940, for example, a black man could expect to be employed for 37.8 years, unemployed for 4.0 years, and out of the labor force for 3.2 years. Among men, the most substantial declines in vears of emr~lovment have occurred since 1970, a change that is accounted for by higher rates of both unemployment and nonparticipation in the labor force. The decrease in employment has been greater among blacks. Between 1970 and 1985, the . , ~--I--,------- in._ 306

BLACKS IN THE ECONOMY FIGURE 6-9 (Continued) (b) Women Out of Labor Force ~ Unemployed ~ Employed O White Black 0 White lo ~ Black O White Black O White rot a) Black O White a, Black White Black 16.4 207 1////~/~ 0 5 10 15 20 25 30 35 40 45 NUMBER OF YEARS expected years of work for a white man fell from 39 to 36, but for a black man the change was from 36 to 29 years. According to the 1985 rates, black men will spend an average of 5 years unemployed and 11 years out of the labor force as they age from 20 to 65; white men will spend an average of 2 years unemployed and 7 years out of the labor force. Women spent increasing time on the job and decreasing time out of the labor market for the 1940-1985 period. Historically, black women have had higher rates of employment than white women, but, as noted above, this changed by the early 1980s, and largely because of higher black unemploy- ment, white women now spend more years at work. College-educated blacks and whites differ substantially in years of employ- ment, unemployment, and labor force participation, a difference that helps to account for the lower earnings of blacks. According to the rates of 1985, a black male college graduate would, if he survived to age 65, be employed for 36 years, a white for 40 years. 307

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY The employment of black women has increased dramatically over the 1939-1984 period. The percentage of black women with labor market earn- ings increased from 32 percent in 1939 to 56 percent in 1984. However, the employment gains were not evenly distributed among women of different educational attainment. The labor force participation rates of women of both races, and their increases, were greatest at the upper educational levels. Increases in participation have been smaller among black than white women, and black women's unemployment rates have risen in comparison with white women's. In all group comparisons except those for college-educated women, the black-white difference in unemployment rates was greater in 1985 than 45 years earlier. More black women are in the labor force, but their greater vulnerability to unemployment gives them a lower employ- ment/population ratio than white women. On the basis of 1985 rates, black female college graduates surviving to age 65 could expect to work 36 years, white female college graduates 33 years. Important differences in employment trends over time can be seen for specific age groups. For example, an increasing proportion of whites work while they are teenagers or in their early 20s, but among young blacks, the nronortion with inh.s has declined. Among adult men (aged 25-54) the decrease in employment has been greater for blacks than for whites, while among adult women the rise in employment has been greater for whites. r~r~ -- ~ Cal The Special Problems of Black Man Men without employment or earnings have posed a serious obstacle to blacks' economic progress. Although the average weekly earnings of black men have risen much more than those of white men, black males work, on average, fewer weeks per year than whites, and this gap has been widening. Comparing 1979 with 1939 a gain from 47 to 72 percent in relative weekly . . ~ ~ 1 11 ' ~ _ __ A ~ ~ ~ ~ earnings per worker edected a much smaller gain, trom ~z percent to 3 percent in relative earnings per capita (Table 6-5, page 295~. In 1939, blacks' unemployment rates were generally 50 to 60 percent higher than those of whites, but since 1959 blacks' rates have been about double whites' rates. The percentage point differences in the unemployment rates of black and white adult males were at a minimum in the late 1960s. Many workers, black and white, are not in the labor force because they are discouraged by a scarcity of jobs. Quite likely, black participation in the labor force would be as high as white participation if their unemployment rates were comparable. As an illustration, the unemployment rate among black males in the state of Connecticut during 1984 was 7.6 percent, which was approximately the nationwide unemployment rate of white males in that year (7.4 percent). In Connecticut, the labor force participation rate of black males exceeded the national aggregate rate for white and black males. In general, labor force participation rates of black males are greatest in those states with the lowest black unemployment rates (see Table 6-6~. Unemployment and short-term work have affected disadvantaged blacks 308

BLACKS IN THE ECONOMY more than those able to gain from the opportunities opened by the civil rights revolution. The decrease in labor force participation and the increase in unemployment among men have been greatest among those with little education (Farley, 1987~. The plight of blacks in the bottom economic stratum, relative to whites and to more fortunate blacks, is dramatically shown in census figures on men reporting no annual earnings (Table 6-7~. These are not teenagers or elderly men but men of prime working age. For both races, there was a large decline in the proportion of men reporting no earnings between 1939 and 1959.4 Since 1959, the proportion of men reporting no earnings has risen, but the increase has been much steeper among blacks than whites. The increase in nonearners has been greatest among men with limited educations and among those approaching retirement. Those men reporting no earningsS must be dependent on their relatives or on activities they do not report to census interviewers. Some may receive food stamps, unemployment compensation, locally provided benefits, or disability insurance. As suggested above, the reported lack of earned income of these men is likely to be a factor in the decline of stable marriages and two-parent households; men with no earnings are not good prospects as husbands and fathers. Explanations for declining employment of black men confront an apparent anomaly. Improved wage and occupation opportunities for blacks would be expected, in theory, to increase their labor force activity; yet black labor force participation has declined, even for prime-age males (aged 25-54). An explanation that receives strong theoretical support but very weak empirical support is that the decline in black male employment is due to the growth in social transfer program benefits that made not working an attractive choice for low-wage workers. 4. Some of the early change occurred because of the inclusion in the 1950 census of a question about self-employment earnings, which was not asked in 1940. Macroeconomic changes and increasing employment opportunities also played an important role since the reported unemployment rate for adult black men declined from 14.7 percent in 1939 to 7.6 percent in 1949. 5. The existence of an extensive underground economy ranging from off-the-books cash deals and in-kind trading to more traditional criminal activity is well known, but there are no reliable data on the extent of this activity or the typical incomes involved. For black youths and young men (aged 16-24) the National Bureau of Economic Research (NBER) sample of more than 2,000 youths from the worst inner-city poverty tracks in Boston, Chicago, and Philadelphia indicate that criminal activities are an important alternative to legal employment for a minority of black youths in these very disadvantaged areas. While 58 percent of the survey group believed earnings opportunities were greater on a job, 10 percent believed opportunities for earnings from employment and "street" activities were equal and 32 percent perceived greater opportu- nities on the street. About one-fourth of the income reported by the sample of youths was from crime. However, most of the crimes were committed by a small minority of the sample. About 16 percent reported involvement in criminal activity (Freeman and Holzer, 1986:14; Viscusi, 1986:343). The most profitable of these criminal activities resulted in increased income of about $2,000 annually (Viscusi, 1986:333). We caution that this subsample was intentionally biased to survey the most disadvantaged black youths and, therefore, its findings cannot be extrapolated to the entire black population of males aged 16-24. 309

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY TABLE 6-6 Employment and Labor Force Participation Rate of Black Men in Selected States, 1984 Labor F<>rce Participation Difference: All Men Unemployed Minus State Black Men All Men Black Men All Men Black Men Connecticut 7.6 4.2 78.0 78.8 0.8 South Carolina 9.8 5.5 68.6 74.7 6.1 Maryland 10.9 5.2 76.3 77.9 1.6 Virginia 11.0 4.5 76.0 80.5 4.5 Georgia 11.5 5.4 71.3 76.9 5.6 United State 16.4 7.4 ~70.8 76 4 ~ 6 aThe national unemployment rate for white males aged 25-54 was 5.2 percent. Note: These five states have the lowest unemployment rates for black men, aged 16 and colder, of those states that meet the Bureau of Labor Statistics' publication standards of reliability. Source: Data from Bureau of Labor Statistics. The Great Society of the 1960s stressed job training and employment policies, but it also increased social income transfers. The rate of growth of transfers in real per capita terms increased until the mid-1970s, and some of these programs are known to have affected labor force activity. For example, participation in disability payments programs-given to individuals who suf- fer from work-related disabilities-expanded greatly as benefit levels rose and eligibility standards were lowered. Barring cases of severe disability, those most likely to leave the work force are workers whose earnings are relatively low compared with benefit payments; thus, participation in these programs it nr~n~rtionnt~lv higher for blacks than whites. However, the precise mag- nitude of disability transfers Is not known and the evidence is not clear (Haveman and Wolfe, 1984; O'Neill et al., 1986:56-69; Parsons, 1980; Vroman, 1987~. Furthermore, research by Brown (1984b) and Darity and Myers (1980) did not find that transfer programs caused blacks to leave the labor force at a Greater rate than whites. Some scholars such as Becker TV retry A^~ J ~ _ _ _ (1981:Ch. 11) and Murray (1984) claim that government incentives have led to marital instability, more female family heads, and lower labor force attachment for males. (It is true that single men are less likely to work than married men.) However, the evidence supporting this position is also ex- tremely weak (see Chapter 10~. In contrast to this proposed explanation of declining black employment is a more structural explanation. The shifting industrial base of the U.S. econ- omy from blue-collar manufacturing to service industries, the slowdown in economic growth, and the consequent decline in real wages could be ex- pected to produce a period of economic and social distress. For displaced and educationally or spatially misplaced workers, the rise in unemployment 310

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A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY . . ~ and increased competition for moderate- to high-paying jobs might well lead to a rise in the number of discouraged workers. These men discontinue active job search for long periods of time. The rise in government transfer programs may have aided such decisions, but there are little theoretics or empirical grounds for believing that transfers were the major factor. The data clearly show that the adverse events had an earlier and more severe impact on the least educated workers and on blacks; thus, it is not surprising that black men with higher unemployment rates, more volatile occupations, lower wages, lower education, and disproportionate location in the urban areas of the most economically affected "snow belt" have lower labor force participation rates than white men. OCCUPATIONS Changes in Occupational Dictum Concurrent with the distressing trends in black employment, the occupa- tional distribution of employed blacks has dramatically improved since 1939. On the eve of World War II, blacks were concentrated in a very confined range of low-paying jobs: 75 percent of the employed black men in 1940 worked on farms as laborers or in factories as machine operators; 68 percent of black women were domestic servants or farm laborers. As blacks moved into cities they began to obtain better jobs (see Table 6-1, page 273~; the proportion of employed workers who held professional or managerial jobs from 1950 to 1982 is shown in Figure 6-10. While the occupational distri- bution of whites improved as the economy shifted from blue-collar jobs to white-collar and service jobs, changes were somewhat greater among blacks as barriers to good jobs were lowered. For example, the percentage of em- ployed white men with professional or managerial positions rose from 20 percent in 1950 to 32 percent in 1982; for nonwhite men, the increase was from 6 percent to 20 percent. Among women there is even clearer evidence of a narrowing gap in the occupational ranks: the percentage of employed white women holding these higher ranking jobs increased from 18 percent in 1950 to 26 percent in 1982; for nonwhite women, the percentage rose from 7 to 20 percent. Numerous studies analyzing differences across the occupational distribu- tion find that the proportion of employed workers in better jobs increased more rapidly for blacks than for whites and that this upgrading continued throughout the 1970s and 1980s (see e.g., Belier, 1984; Freeman, 1973~. Studies of occupational mobility that take into account black-white differ- ences in age, educational attainment, and place of residence also report a declining net effect of being black per se (Featherman and Hauser, 1976, 1978; Hout, 1984~. Nevertheless, large occupational differences remain and blacks are still greatly overrepresented in low-wage, low-skill jobs. In 1982, the percentage of black men employed as laborers or machine operators was greater than it 312

BLACKS I N THE ECONOMY FIGURE 6-10 Professional and managerial workers, (a) men and (b) women, by race, 1950-1982. 33r( 28~ LL tar LL] ~ 13 (a) Men 18 8 3 01 ~1 1 1 1950 1955 1960 33 28: by ~ 18 23 13 8 3 _ O 1 1 1950 1955 1960 1965 1970 Nonwhite _ ~ 1 1 1 1965 1970 1975 1980 YEAR (b) Women Nonwhite YEAR Source: Data from decennial censuses and Bureau of Labor Statistics. '! .. 1975 1980 ~ I..... was for white men in 1940. And the proportion of employed black men with professional or managerial jobs was barely equal to what it had been among white men three decades earlier. Among women, the corresponding lag in the proportion with professional or managerial jobs was about two 313

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY decades. Several more decades of substantial change would have to occur before blacks and whites have similar occupational distributions. As we noted above, occupational differences between black and white women have narrowed considerably since 1960, when 45 percent of working black women were in personal household service (see Table 6-1, page 273~. In terms of broad occupational categories, blacks and whites are distributed similarly, although black women are twice as likely as white women to work in service occupations and more likely to work as laborers. White women are more likely to be professional or managerial workers and to work in sales. Moreover, 44 percent of black women are employed in lower paying, lower level, pink- and blue-collar occupations in manufacturing, service, and pri- vate households. Malveaux (1986:11-13) points out that finer occupational breakdowns disclose that black women are occupationally separated into jobs that are not only "typically female" but also disproportionately black female. She defines "typically black female" occupations as those in which black women's rep- resentation is more than twice their representation in the labor force. In service jobs, for example, black women in 1981 were overrepresented by a factor of 3 or 4 as chambermaids, welfare service aides, cleaners, and nurse's aides: 41 percent of the black women who work in service occupations were employed in these four types of jobs. Nearly one-quarter of all black women were concentrated in just 6 of 48 clerical occupations. They are overrepre- sented by a factor of 4 as file clerks, typists, teacher's aids, keypunch opera- tors, calculating machine operators, and social-welfare clerical assistants. Self-Employment Since the 1960s, market opportunities have induced blacks to create and expand businesses serving corporate and government clients. Government and private set-asides, preferential procurement policies, and other programs have often aided better educated and younger blacks to create and expand firms, particularly in finance, insurance, and real estate (see Chapter 4~. In 1959, serf-employed blacks had, on average, less than 8 years of educa- tion, and their average earnings were lower than those of black employees. In contrast, by 1980, self-employed blacks under age 65 had more than 11 years of education, and their average earnings (from all sources) exceeded those of black employees. The average self-employment earnings of blacks also gained, relative to whites: in 1985, the self-employment earnings of black men relative to white men were roughly the same as relative wages and salaries, 64 and 66 percent, respectively; the same was true of women, 95 and 94 percent, respectively, but black women are self-employed at much lower rates than the other groups. In 1960, two lines of business-personal services and retailing-accounted for more than one-half of all minority enterprises. The four most common fields were personal services, retail, construction, and other services. Between 314

BLACKS IN THE ECONOMY 1960 and 1980, however, all of the relative growth in minority enterprises occurred outside these four traditional lines of business, and especially in business services, finance, insurance and real estate, transportation and com- munication, and wholesaling (Bates, 1986:29-30~. These are more skill- intensive lines of business, reflected in rising average years of education among self-employed blacks. Among all blacks self-employed in finance, insurance, and real estate in 1980, 66 percent had attended college (com- pared with 28 percent of all self-employed blacks) and most had degrees. EMPLOYMENT AND EQUAL OPPORTUNITY Although civil rights legislation, a general antidiscrimination ethos, affir- mative action, and pressures from blacks and whites alike have greatly ex- panded opportunities for blacks, labor market discrimination has by no means completely disappeared. Rather, a very complicated picture has emerged. If a man or woman, regardless of race, manages to enter the labor market with a high-quality education or skill, he or she generally enjoys equal access to entry positions and to lower middle-status ranks. However, some evidence suggests that opportunities at the middle stage of a worker's career and at higher status positions are not equally available to blacks (see Chapter 3; Lazear, 1979~; and, importantly, clearly race plays a decisive role in determining whether a man or woman will in fact reach the labor market with a quality education (see Chapter 7~. This racial filter arises partly from black-white separation in residential, educational, and social networks and especially from the growing isolation of the black poor. Furthermore, these . . interactions between race and status result in employment network patterns that often vitiate the benefits of education for black male high school grad uates. EQUAL EMPLOYMENT OPPORTUNITY ENFORCEMENT The idea of equal employment opportunity for black Americans gained highly visible support from the federal government for the first time during World War II. Policy in this area focused on the exclusion of blacks from good jobs in the expanding wartime industries and led to creation of the Fair Employment Practices Committee (see Chapter 2~. Although Congress re- filsed to extend enforcement of the principle of nondiscrimination in em- ployment to the peacetime economy, blacks continued to pressure President Truman. In 1948, he followed the recommendations of his Committee on Civil Rights and proposed a federal policy of equal opportunities in employ- ment. Thirteen years later, President Kennedy, whose election had resulted in part from black votes, issued Executive Order 10925, which banned racial 315

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY discrimination by government contractors and established guidelines in- tended to promote the hiring of blacks. The paramount achievement of the civil rights movement in this field was the Civil Rights Act of 1964, which outlawed discrimination in all aspects of employment. Title VII of the act created the Equal Employment Opportu- nity Commission (EEOC), a permanent, five-member bipartisan commis- sion, to combat discriminatory employment practices in the private sector that are based on race, color, religion, sex, or national origin. Employers and labor unions with at least 100 employees or members and employment agencies were covered by the legislation. A 1972 amendment to the act extended the covered sector to organizations with more than 15 employees. The EEOC was empowered to investigate complaints, conciliate between employers and employees, and recommend to the U.S. Department of Justice that legal action be taken against violators of antidiscrimination laws. In the 1970s, the EEOC was given the power to sue alleged discriminators in court. The EEOC regularly collects compliance reports from the sector of the private economy covered by Title VII (see Chapter 5~. In 1965, Exec?~tz~e Order 11246 established rules for nondiscrimination by federal contractors, first-tier subcontractors, and construction projects oper- ating with federal assistance. Contractors with 50 or more employees and contracts of $50,000 or more are required to develop and submit affirmative action compliance programs with goals and timetables for the hiring and promotion of minorities. The executive order is administered by the Office of Contract Compliance Programs (OFCCP) within the U.S. Department of Labor. Many people have attributed black economic gains in the 1960s and 1970s to these agencies' enforcement of antidiscrimination laws, and a number of studies have addressed this question. One body of research approaches the problem through statistical analysis of time-series data from a number of published sources. Another body of research attempts to measure the effect of federal employment discrimination programs through econometric analy- sis of cross-sectional data obtained from the EEOC and the OFCCP. At the outset, we draw attention to an important distinction between these two categories of research. Time-series studies have been primarily concerned with the broad impact of equal employment opportunity (EEO) laws and their enforcement throughout the private and government sectors of the national labor market. Cross-sectional analyses focus specifically, and more narrowly, on the effects of federal government affirmative action re- quirements on private firms contracting with the government. There is greater agreement among the findings from the latter research than among the research addressing the effects of general antidiscrimination laws. Nearly all of the cross-sectional research finds that blacks' employment share increased more in contractor firms subject to affirmative action require- ments than in firms without federal contracts. In addition, some studies reported small or mixed results on occupational upgrading. Most of these studies analyzed data collected in the late 1960s and early 1970s. A more 316

BLACKS IN THE ECONOMY recent analysis by Leonard (1985) reported larger employment effects for the period 1974-1980. Leonard also reported that black males experienced oc- cupational upgrading as a result of affirmative action compliance. The first study on the race and sex composition of the work forces of government contractors and employers was that of Ashenfelter (1968) . Sub- sequently, four studies covering the period 1966-1973 used EEO data to estimate the impact of OFCCP on the relative employment of blacks (Ash- enfelter and Heckman, 1976; Burman, 1973; Goldstein and Smith, 1976; Heckman and Wolpin, 1976~. All but Goldstein and Smith (1976) found positive effects on relative black male employment. There was only a small impact on relative occupational position in contractor establishments, al- though Burman (1973) found exceptions to that finding. These cross-sec- tional studies covered the late 1960s and early 1970s, before OFCCP had adequately specified how affirmative action was to be applied to contractor establishments (Wallace, 1984:11) . Leonard (1985) used regression analysis to measure the effect of contractor and compliance review status on the change in the percentage employed according to demographic groups at 68,690 contractor establishments subject to affirmative action policies in the 1970s. He reported significantly larger black employment gains and net occupational upgrading than did studies of earlier periods. There are two primary methodological difficulties in interpreting these studies (Heckman, 1987:14-15~. First, estimates of black gains based on comparisons of employment or occupational status in firms with and with- out federal contracts at a point in time might be biased upward because firms hire in the same market. Thus, contractor firms bidding for black labor in order to meet federally mandated targets may simply hire blacks away from noncontractors. If contractor firms gain at the expense of noncontractor firms, comparisons of differences in employment status between the two types of firms will overstate actual gains in black employment status. Com- parisons of contractor and noncontractor firms may overstate the effects of affirmative action when nothing has happened but a rearrangement of a given pool of labor. Second, virtually all firms in given industries bid for government contracts. Winning a contract is partly chance, and firms may bid often. It is costly to hire and fire workers; thus, any noncontractor firm contemplating a bid may maintain a pool of black employees, and thus its work force may be similar to current contractor firms. In this event, although OFCCP could have had a large effect on government contractor industries, comparisons of contractor and noncontractor firms at a point in time would understate the effects of affirmative action. Because of the importance of hiring and firing costs and of the robustness of the many studies finding positive effects, the second argument appears to be more plausible than the first. And thus, the findings of positive employ- ment and occupation effects of the OFCCP activities are assessed to have been generally positive. The time-series studies of EEOC in general have produced less agreement. 317

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

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

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

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

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

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

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. . REFERENCES Anderson, Elijah 1980 Some observations on black youth employment. Pp. 64-87 in Bernard Anderson and Isabel Sawhill, eds., Youth Emp/~nent Issues and Policy. Englewood Cliffs, N.J.: Prentice-Hall. 1986 Of Old Heads and Young Boys: Notes on the Urban Black Experience. Paper prepared for the Committee on the Status of Black Americans, National Research Council, Washington, D.C. Ashenfelter, Orley 1968 Minority Employment Patterns, 1966. Princeton, N.J.: Industrial Relations Section, Department of Economics, Princeton University. Ashenfelter, Orley, and lames J. Heckman 1976 Measuring the effect of an anti-discrimination program. Pp. 46-84 in Orley Ash- enfelter and James Blum, eds., Evaluating the Labor Market Effects of Social J~o~grams. Princeton, N.J.: Industrial Relations Section, Department of Economics, Prince- ton University. Bassi, Laurie, and Orley Ashenfelter Bates, Timothy 1986 The effect of direct job creation and training programs on low-skilled workers. Pp. 133-151 in Sheldon Danziger and Daniel Weinberg, eds., Fighting Poverty: What Works and What Doesn't. Cambridge, Mass.: Harvard University Press. 1986 Paper prepared for the Committee on the Status of Black Americans, National Research Council, Washington, D.C. Becker, Gary 1981 A Treatise on the Family. Cambridge, Mass.: Harvard University Press. Belier, Andrea H. 1984 Trends in occupational segregation by sex and race, 1960-1981. In Barbara F. Reskin, ea., Sex Se,gregat~on in the Workplace. Committee on Women's Employment and Related Social Issues. Washington, D.C.: National Academy Press. 324

BLACKS IN THE ECONOMY Betsey, Charles L., Robinson G. Hollister, Jr., anal Mary R. Papageorgiol1 1985 Couth Emphry7nent and Training Programs: The tEDPA ~ears. Committee on Youth Employment Programs. Washington, D.C.: National Academy Press. Borjas, George J. 1986 The demographic determinants of the demand for black labor. Pp. 191-232 in Richard B. Freeman and Harry J. Holzer, eds., The Black Youth Empk~ment Crisis. Chicago and London: University of Chicago Press. Braddock, JoMills Henry, II, Robert L. Crain, James M. McPartland, and Russell L. Dawkins 1986 Applicant race and job placement clecisions: a national survey experiment. Inter- national Journal of Sociology and Social Policy 6~1~:3-24. Braddock, JoMills Henry, II, and James M. McPartland 1987 How minorities continue to be excluded from equal employment opportunities: research on labor market and institutional barriers. Journal of Social Issues 43~1)[Spring] :5-39. Bradford, William D. 1987 Wealth, Assets, and Income of Black Households. Paper prepared for the Commit- tee on the Status of Black Americans, National [Research Council, Washington, D.C. Bradshaw, Thomas 1973 Jobseeking methods used by unemployed workers. Monthly Labor Review 96(February) :35-46. Brown, Charles 1984a The federal attack on labor market discrimination: the mouse that roared? In Ronald Ehrenburg, ea., Research in Labor Economics. New York: JAI Press. 1984b Black/white earnings ratios since the Civil Rights Act of 1964: the importance of labor market dropouts. Q~arterly~o?vrnal of Economics 99 (February) :31-44. Burman, George 1973 The Economics of Discrimination: The Impact of Public Policy. Ph.D. thesis, Graduate School of Business, University of Chicago. Burstein, Paul 1985 Discrimination, Jobs, and Politics: The Spangle for Equal Employment Opportunity in the United States Since the New Deal. Chicago: University of Chicago Press. Burtless, Gary 1984 Manpower policies for the disadvantaged: what works? The Brooking Revive 3~1) [Fall]: 18-22. 1987 The work response to a guaranteed income: a survey of experimental evidence. In Alicia H. Mannell, ea., Lessons from the Income Maintenance Experiments. Boston: Federal Reserve Bank of Boston. Clark, Kenneth B. 1965 Dark Ghetto. New York: Harper & Row. Clark, Kim B., and Lawrence Summers 1982 The dynamics of youth unemployment. In Richard B. Freeman and D. A. Wise, eds., The youth Labor Market Problem: Its Nature, Causes, and Consequences. Chi- cago: University of Chicago Press. Culp, Jerome, and Bruce H. Dunson 1986 Brothers of a different color: a preliminary look at employer treatment of white and black youth. Pp. 233-260 in Richard B. Freeman and Harry J. Holzer, eds., The Black Youth Emp/vyrnev~t Crisis. Chicago and London: University of Chicago Press. Danziger, Sheldon, and Peter Gottschalk 1986a Do rising tides lift all boats? The impact of secular and cyclical changes in poverty. American Economic Reriew 7642)[May]:405-410. 1986b Unemployment Insurance and the Safety Net for the Unemployed. Discussion paper, Institute for Poverty, University of Wisconsin. 325

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY Danziger, Sheldon, and Daniel Weinberg, eds. 1986 Fighting Poverty: What Works and What Doesn't. Cambridge, Mass.: Harvard University Press. Darity, William A., Jr., and Samuel L. Myers, Jr. 1980 Changes in black-white incomes inequality, 1968-1978: a decade of progress? The Row of Black Political Economy 1044)[Summer]:354, 356-379. Ellwood, David T. 1986a Targeting the Would-Be ~ Term Recipient of AFDC: Who Should Be Served? Prince- ton, N.J.: Mathematica Policy Research. 1986b The spatial mismatch hypothesis: are there teenage jobs missing in the ghetto? Pp. 147-196 in Richard B. Freeman and Harry J. Holzer, eds., The Black Couth Employment Crisis. Chicago and London: University of Chicago Press. 1988 Poor Support: Poverty in the American Family. New York: Basic Books. Farley, Reynolds 1987 Changes in the Status and Characteristics of Blacks: 1940 to Mid-1980s. Paper prepared for the Committee on the Status of Black Americans, National Research Council, Washington, D.C. Featherman, David L., and Robert M. Hauser 1976 Prestige or socioeconomic scales in the study of occupational achievement. Soci- olo~qicalMethodsandResearch4~4~[May]:403-422. 1978 Opportunity and Change. New York: Academic Press. Freeman, Richard B. 1973 Changes in the labor market for black Americans, 1948-1972. Brookin,gs Papers on Economic Activity. Vol. 1. Washington, D.C.: Brookings Institution. Freeman, Richard B., and Harry J. Holzer, eds. 1986 The Black Youth EmpEr~n~t Crisis. Chicago and London: University of Chicago Press. Goldstein, Morris, and Robert S. Smith 1976 The estimated impact of the antidiscrimination program aimed at federal con- tractors. Industrial and Labor Relations Row 29~4~[July]:523-543. Gueron, Judith 1986 Work Initiatives for Welfare Recipients: Lessons Mom a M?~lti-State Experiment. New York: Manpower Demonstration Research Corporation. Gwartney, James 1970 Changes in the nonwhite/white income ratio-1939-67. American Economic Re- mew 6045~:872-883. Haveman, Robert, and Barbara Wolfe 1984 The decline in male labor force participation comment. Journal of Political Econ- omy 92~3~[0ctober]:532-541. Haworth, J. G., J. D. Gwartney, and C. Haworth 1975 Earnings productivity and changes in employment discrimination during the 1960's. American Economic Ranier 65~2~[March]:158-168. Heckman, James J. 1987 The Impact of Government on the Economic Status of Black Americans. Un- published paper, Department of Economics, University of Chicago. Heckman, James J., and Brook S. Payner 1989 Determining the impact of federal antidiscrimination policy on the economic status of blacks: a study of South Carolina. American Economic Review 79~1~[March]: 138-177. Heckman, James J., and Kenneth I. Wolpin 1976 Does the Contract Compliance Program work? An analysis of Chicago data. Industrial and Indoor Relations Renew 29 (July): 511 564. 326

BLACKS IN THE ECONOMY Hill, Robert B. 1987 The black middle class: past, present, and future. Pp. 43-64 in The State of Black America 1986. Washington, D.C.: National Urban League. Holzer, Harry J. 1986 Black youth nonemployment: duration and job search. Pp. 23-65 in Richard B. Freeman and Harry J. Holzer, eds., The Black youth Empk~nt Crisis. Chicago: University of Chicago Press. 1987 Informal job search and black youth unemployment. American Economic Renew 77~3)[June] :447-452. Hout, Michael 1984 Occupational mobility of black men. American Sociological Renew 49~3~:308-322. Jaynes, Gerald David, James Tobin, and Reynolds Farley, cds. 1986 Manuscript prepared for the Panel on Income, Employment, and Occupations, Committee on the Status of Black Americans, National Research Council, Wash- ington, D.C. Kain, John F. 1968 Housing segregation, Negro employment and metropolitan decentralization. Quarterly Journal of Economics 82 (May) :32-59. Kasarda, John D. 1985 Urban change and minority opportunities. Pp. 33-67 in P. Peterson, ea., The New Urban Reality Washington, D.C.: Brookings Institution. Landry, Bart 1987 The New Black Middle Class. Berkeley: University of California Press. Lazear, Edward 1979 The narrowing of black-white wage differentials is illusory. American Economic Renew 69~4)[September] :553-564. Leonard, Jonathan 1985 The Effectiveness of Equal Employment Law and Affirmative Action Regulation. Report to the Subcommittee on Employment Opportunities of the Education and Labor Committee and the Subcommittee on Civil and Constitutional Rights of the Judiciary Committee, U.S. Congress. School of Business Administration, University of California, Berkeley. 1987 The interaction of residential segregation and employment discrimination. Jo?~r- nal of Urban Economics 21:323-346. Levin, Daniel B., and Linda Ingram, eds. 1988 Income and Poverty Statistics: Problems of Concept and Measurement. Report of a Workshop. Committee on National Statistics, Commission on Behavioral and Social Sciences and Education, National Research Council. Washington, D.C.: National Academy Press. Malveaux, Julianne 1986 The Economic Status of Black Women: An Overview and Note on Interpreta- tion. Paper prepared for the Committee on the Status of Black Americans, National Research Council, Washington, D.C. Marshall, Ray, Charles B. Knapp, Malcolm H. Ligget, and Robert W. Glover 1978 Employment Discrimination. New York: Praeger. Moffitt, Robert 1985a Evaluating the effects of changes in AFDC: methodological issues and challenges. Journal of Policy Analysis and Management 4(Summer) :537-553. 1985b Work incentives in the AFDC system: an analysis of the 1981 reforms. American Economic Review 7642) (May) :219-223. Murray, Charles 1984 Losing Ground: Am~rzcan Social Policy, 1950-1980. New York: Basic Books. 327

A COMMON DESTINY: BLACKS AND AMERICAN SOCIETY Myrdal, Gunnar 1944 An American Dilemma: The Negro Problem and Modern Democracy. New York: Harper & Row. National Advisory Commission on Civil Disorders 1968 Presort of the National Advisory Commission on Civil Disorders. New York: Bantam Books. O'Neill, June, James Cunningham, Andy Sparks, and Hal Sider 1986 The Economic Progress of Black Men in America. Clearinghouse Publication 91. Washington, D.C.: U.S. Commission on Civil Rights. Parsons, Donald O. 1980 Racial trends in male labor force participation. American Economic Review 70 (December) :911-920. Bees, Albert 1986 An essay on youth joblessness. Journal of Economic Literature 24(June) :613-628. Ross, Christine, Sheldon Danziger, and Eugene Smolensky 1986 The Level and Trend of Poverty in the United States, 1939-1979. Madison, Wis.: Institute for Research on Poverty, University of Wisconsin. Sawhill, Isabel V. 1988 Poverty in the U.S.: why is it so persistent? Journal of Economic Literature 26~3) [September]: 1 1 07-1 1 19. Smith, James P. 1988 Poverty and the family. In Gary D. Sandefur and Marta Tienda, eds., Divided Opportunities: Minorities, Paverty, and Social Policy. New York: Plenum. Smith, James P., and Finis R. Welch 1977 Black-white male wage ratios: 1960-1970. American Economic Ream 67June):323- 338. 1986 Closing the Gap, Arty rears of Economic Progress for Blacks. Santa Monica, Calif.: Rand Corporation. U.S. House of Representatives, Committee on Ways and Means 1987 Background Matenal on programs Within the Jurisdiction of the Committee on Ways and Means. Washington, D.C.: U.S. Government Printing Office. Viscusi, W. Kip 1986 Market incentives for criminal behavior. Pp. 301-346 in Richard B. Freeman and Harry J. Holzer, eds., The Black Month Employment Crisis. Chicago and London: University of Chicago Press. Vroman, Wayne 1975 Changes in the labor market position of black men since 1964. Pp. 294-301 in James L. Stern and Barbara D. Dennis, eds., Proceedings of the Twenty-Seventh Annual Winter Meeting, Industrial Relations Research Association Series, Decem- ber 28-29, 1974, San Francisco, California. Madison, Wis.: Industrial [Relations Research Association. 1987 Labor Supply and Black Men's Relative Earnings Since 1964. Washington, D.C.: Urban Institute. Wallace, Phyllis A. 1984 Title VII and the Economic Status of Blacks. Working paper of the Alfred P. Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Mass. 1985 The Private Sector and Equal Employment Opportunity in the 1980s. Working paper of the Alfred P. Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Mass. Wilson, William Julius 1987 The Tinily Disadvantaged: The Inner City, the Undercklss and Public Policy. Chicago: University of Chicago Press. 328

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"[A] collection of scholars [has] released a monumental study called A Common Destiny: Blacks and American Society. It offers detailed evidence of the progress our nation has made in the past 50 years in living up to American ideals. But the study makes clear that our work is far from over." --President Bush Remarks by the president to the National Urban League Conference

The product of a four-year, intensive study by distinguished experts, A Common Destiny presents a clear, readable "big picture" of blacks' position in America. Drawing on historical perspectives and a vast amount of data, the book examines the past 50 years of change and continuity in the status of black Americans. By studying and comparing black and white age cohorts, this volume charts the status of blacks in areas such as education, housing, employment, political participation and family life.

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