Employment and Earnings: A Case Study of Urban Detroit

This paper investigates the roles of manufacturing employment, neighborhood poverty, and family structure in determining wages among Detroit, MI workers, just prior to the current economic crisis. Employment in manufacturing has been crucial for blacks and whites: 39% of black and of white men in the Detroit metropolitan area worked in manufacturing in 2000. Regression analysis in this paper estimates employment in manufacturing raised wages 15.8% for all workers in the metropolitan area, 24.4% for blacks and 13.8% for whites. It finds a higher wage penalty (4.7%) for blacks in non-manufacturing industries than is found when manufacturing sector jobs are included (2.6%). Wage returns to education were greater in the non-manufacturing employment sector, especially for blacks. Residence in the poorest central city neighborhoods reduced wages significantly for white manufacturing and non-manufacturing workers. Its coefficient was insignificant for black workers. Gender and marital status effects on wages differed between blacks and whites in magnitude: White women suffered a larger penalty for their sex than black women (22.6 versus 9.6%) yet black men enjoyed a greater return to marriage than white men (27.5 versus 25.0%). Controlling for manufacturing reduced the gender wage gap and the returns to marriage for men. These findings suggest greater accessibility for women; and lower returns to marriage in non-manufacturing sectors. Among employed blacks access to manufacturing jobs has been their main source of decent wages. The adverse effects of the industry??s job loss in the 1980s and 1990s impacted all Detroit residents. Other high wage industries have employed relatively few blacks, have not paid them well; and have suffered job loss and slow growth over the period. Education could have raised wages for non-manufacturing workers, but not as much as access to manufacturing jobs. Today as in 2000, Detroit??s residents desperately need job creation or relocation to the central city; and job training and anti-discrimination policy enforcement throughout the metro-area. All of these would be necessary to offset job loss and reduce inequality and poverty in Detroit. The extent to which blacks will benefit from 2010?C11 improvements in manufacturing employment in Detroit depends upon whether private companies and the state provide equal access to the jobs and the training new technologies require.     

Assessing black progress: voting and citizenship rights,residency and housing,education

Farley discusses progress US blacks have made in the areas of voting and citizenship rights, residency and housing, and education. A major goal of the civil rights movement was to permit blacks to influence the electoral process in the same manner as whites. Most important in this regard was the Voting Rights Act of 1965; the proportion of southern blacks casting ballots increased sharply since the early 1960s. The Civil Rights Act of 1875 outlawed racial segregation in public accommodations, but by the turn of the century, Jim Crow laws in southern states called for segregation in most public places. Common customs and government policy in the North resulted in similar segregation of blacks from whites. The Montgomery bus boycott and similar protests in dozens of other cities led to enactment of Title II of the Civil Rights Act of 1964, which proscribed such racial practices. By the late 1960s, blacks in all regions could use the same public accommodations as whites. In most metropolitan areas, de facto racial segregation persisted long after the laws were changed. Supreme Court decisions and local open-housing ordinances supported the right of blacks to live where they could afford. However the major change was the Fair Housing Act of 1968, which outlawed racial discrimination in the sale or rental of most housing units. The separation of blacks from whites did not end in the 1970s. Today, in areas which have large black populations, there are many central city neighborhoods and a few in the suburbs which are either all-black or are becoming exclusively black enclaves. Most other neighborhoods have no more than token black populations. Another major effort of civil rights organizations has been the upgrading of housing quality for blacks. By 1980, only 6% of the homes and apartments occupied by blacks lacked complete plumbing facilities (down from 50% in 1940). Unlike the modest changes in residential segregation, racial differences in housing quality have been greatly reduced. By 1960, black students approached parity with whites in terms of measurable aspects of school facilities. In 1940, young blacks averaged about 3 fewer years of educational attainment than whites; the time is nearing when the years of schooling completed by blacks and whites will be the same. In small and medium-sized cities throughout the country, public schools are generally integrated. However, the situation in the largest metropolitan areas is very different. Today, large public schools are segregated, in large part, because blacks and whites live in separate school districts.     

Black women in employment and training programs

This article examines the past experience of women-with a focus on black women-in employment and training programs. In spite of the fact that women have been underrepresented in these programs and often steered toward training in “traditionally female” occupations, they exhibit higher postprogram earnings gains than males. Overall, however, the training provided has at best shifted women into low-wage clerical fields with average annual earnings barely above the poverty level. Therefore, these programs-taken alone-can not be expected to have a major impact on an important problem facing blacks: welfare dependency.     

Effects of community,family, and education on earnings of black and white men

Summary The primary purpose of this paper was to determine the effect of background on the education and earnings of black and white men.It was largely motivated by a desire to quantify the extent to which past discrimination against Blacks, resulting in lower achievement, inhibits the progress of individuals today in a somewhat more benign environment.It has demonstrated that both community and family background factors are important in determining the levels of education and earnings of black and white men.The community effects for Blacks operate largely through their moving into more integrated neighborhoods, so that many positive community externalities are apparently not available to families in predominantly black middle-class neighborhoods.While the effects of father’s education, city origin, and community income are comparable between Blacks and whites, white men’s education is more affected by number of siblings, family income, and age of 1968 head of household than is black men’s education.The relative sizes of the coefficients of these latter variables are consistent with steeper age-earnings profiles for older white men than older black men and higher prices paid for investing in children by black parents.     

Race,amenities, and psychic income

Even when there are no racial wage differences between black and white faculty in institutions of higher learning in the Deep South, there are significant racial differences in amenities such that the psychic income of blacks is lower than that of whites. It is demonstrated that black faculty will tend to have higher turnover rates than whites if racial discrepancies in amenities exist. The maintenance of old traditions that affect job satisfaction of blacks acts as a margin to neutralize integration efforts. The assumption that equal pay is equivalent to equal opportunity is challenged.     

A note on black-white wage disparity

Conclusion The evidence in this article helps to explain the black-white earnings differential in 1970, six years after the passage of Fair Employment Legislation, in terms of traditional measures such as experience and education along with a public policy measure that has of late come under fire. And contrary to the notion that the gains from such government policy have not benefited the less fortunate workers but simply accrued only, or mainly, to upper- or middle-class blacks, the results presented here indicate that enforcement, such as it is, has had beneficial effects for black men and women in virtually all major occupational categories. When a distinction is made between the various major occupational categories, the importance of education and experience as factors that contribute toward explaining black-white earnings differentials is generally supported by this study. However, neither education nor experience shows a consistent explanatory power across occupational categories and especially across the sexes. For example, experience is more frequently found to be a significant factor for black men than it is for black women. Education, on the other hand, was found to have no statistically significant relationship with wage differentials in major blue-collar job categories for both men and women, thus lending some credence to the dual labor market thesis regarding returns to education. By far the factor we have found to be the most consistent with respect to its impact upon racial wage differentials for both men and women is the fair employment variable. Indeed, across major occupational groups the existence and enforcement of fair employment laws seems to have had, generally, a more significant effect on reducing racial wage differentials than each of the other independent variables.     

Introduction to Articles on Black Women and Work

Black women are one of the hardest working groups in the country. However, hard work is not always properly rewarded. The existence of wage inequities based on race has been shown to exist (Darity The Journal of Human Resources XVII: 72–91 1982), and black women have not been exempt from its implications. In addition, African American women still experience higher unemployment levels than their white female counterparts. In papers examining black women in the nursing profession, their income and earnings volatility, and inequities in their employment, Richard McGregory, Bradley Hardy, and Linda Loubert provide an overview of where black women stand in the U.S. labor market with respect to work and earnings. While these pieces show that African American women have made significant inroads into the American labor market there is still further to go.     

Trends,prospects, and strategies for black economic progress

As we approach the closing years of the 1980s, it is clear that, for better or worse, the focus of the struggle for black equality is shifting from traditional civil rights issues to economic development. And although people often debate how best to remedy some of the black community’s most persistent economic problems (for example, high unemployment and the narrowing, but still wide, income gap between blacks and whites), few people have attempted a dispassionate analysis of the broad scope of public and private economic options facing blacks. Too often, the debate is polarized by arguments either for increasing governmental assistance or for almost totally eliminating it. In this article, noted economist Andrew Brimmer strikes a much-needed balance. First, he scrutinizes the trends for blacks (and whites) regarding income and participation in the labor market. Then, instead of painting a picture in pure black and white, he suggests a blending of strategies, some calling for less reliance on the federal government, others requiring a strengthening of the nation’s wavering commitment to affirmative action.     

A simultaneous probit model of crime and employment for black and white teenage males

This study examines the relationships between the employability and criminality of white and black male teenagers. A disequilibrium model of employment and crime is formulated and estimated as a simultaneous probit equation system. Our results show that black teenagers who are employed engage in fewer criminal activities. Thus, it appears that blacks view employment and crime as alternative income-generating activities. On the other hand, the criminal behavior of white male teenagers is unaffected by their employment status. The evidence that we provide indicates that whites tend to use employment as a cover for crime or to moonlight in crime. The differences in the behaviors of whites and blacks can be explained, in part, by different legitimate opportunity structures for whites and blacks. One of the more important policy implications is that job opportunities targeted to high risk, black teenage populations will have the additional beneficial effect of reducing crime rates.     

The changing status of economic minorities, 1948–1977

Conclusion Our results indicate that the median income of economic minorities relative to that of whites does not adequately represent the entire income distribution. Among black males, for example, only the lower half of the income distribution experiences a significant change in relative income over the business cycle. The secular trend shows similar variation. Black men at the 25th, 50th, and 75th percentiles experienced significant gains relative to whites in the 1965–77 period while there was little improvement among blacks in the 90th percentile. Using a measure of central tendency to generalize about the entire distribution of an economic minority is a dubious proposition. While this may seem like a trival point, it should be remembered that in today’s political climate such credence is being given to improvement in the general health of the economy as the best way to foster economic progress for economic minorities, while less general remedies, such as affirmative action, are rapidly being deemphasized.     

The structure of the South African labor market, 1970–83

The structure of the labor market in the Republic of South Africa over 1970–83 is strongly linked to the Natives Land Act of 1913, No. 27, which dispossessed blacks of their legal right to land ownership. One of the intended results of this act was to increase the supply of cheap black labor to South Africa’s predominantly white-owned industry. Thus, over the 1970–83 period, as before, blacks occupied the lowest ends of the educational, occupational, employment, and income distributions among all races in South Africa. On the other hand, the white minority lived at a standard equal to that of Americans and Scandanavians. However, even within these constraints, the demographics of South Africa are such that over the next decade or more, and even in the absence of major political upheaval, blacks may comprise an increasing percentage of the workforce and occupy positions which have been mainly occupied by whites to date.     

Racial employment and earnings differentials: The impact of the Reagan Administration

Numerous authors have considered the time paths of black/white employment and earnings differentials. Some have dealt with significant policy change impacts such as the 1964 Civil Rights Act. This study reports evidence concerning the impact of Reagan administration policy changes. The major drawback to the study is, of course, that the administration’s total impact will no doubt not be felt for years. Regardless, using U. S. Census data through 1984, it was found that the administration had either a mixed effect (relative employment) or no effect (relative income), leaving the decaying position of blacks in the labor market little changed.     

Racial Earnings Disparities and Family Structure

One explanation for the widening of racial earnings gaps among family heads during the 1980s is that black families were increasingly headed by females during that period. This explanation is tested using data on black and white family heads in 1976 and 1985 from the Institute for Research on Poverty's Current Population Survey. Log-earnings equations, corrected for selection bias and for the endogeneity of labor force participation, are estimated for blacks and whites in 1976 and 1985. If the impact of rising female-family headship on labor force participation is ignored, one finds support for the family structure explanation. But support for alternative explanations is also found. There are substantial impacts of within-race gender discrimination and of market racial discrimination. When the endogeneity of family structure is taken into account, further support is found for the view that endowment differences only explain a modest portion of the rising gap in earnings between black and white family heads.     

Arrival Cohort, Assimilation, and the Earnings of Caribbean Women in the United States

Utilizing data on U.S.-born and Caribbean-born black women from the 1980–2000 U.S. Censuses and the 2000–2007 waves of the American Community Survey, I document the impact of cohort of arrival, tenure of U.S. residence, and country/region of birth on the earnings and earnings assimilation of black women born in the English-, French-, and Spanish-speaking Caribbean. I also test whether selective migration accounts for earnings differences between U.S.-born and Caribbean-born black women in the United States. I show that almost all arrival cohorts of Caribbean women earn less than U.S.-born black women when they first arrive in the United States. However, over time the earnings of early arrival cohorts from the English- and French-speaking Caribbean are projected to surpass the earnings of U.S.-born black women. Indeed, this crossover is most pronounced for women from the English-speaking Caribbean. In models that account for selective migration by comparing the earnings of Caribbean women to U.S.-born black women who have moved across states since birth, I show that more time is required for early arrival cohorts from the English- and French-speaking Caribbean to surpass the earnings of U.S.-born black internal migrants. Women from the Spanish-speaking Caribbean do not seem to experience earnings growth as their tenure of U.S. residence increases. In summary, the findings suggest that selective migration is an important determinant of earnings differences between U.S.-born black women and black women from the Caribbean.     

Analysis of wage differentials by gender and ethnicity in the public sector

This study investigates the source of wage differentials between blacks, Hispanics, and whites, and between women and men, in metropolitan Dade County (Florida) government, and draws out the implications of this analysis for affirmative action planning. Our distinctive finding is that the primary factor causing observed wage differentials by ethnicity is the sorting of people across occupational categories. Wage decompositions reveal that for males, 70 percent, 88 percent, and 47 percent of the wage gaps between white and black, white and Hispanic, and Hispanic and black, respectively, are attributable to occupation. For females, the corresponding figures are 56 percent, 58 percent, and 51 percent. When comparing men and women of the same ethnic group, occupational employment patterns are found to be an important factor accounting for lower average female wages, yet within major occupational groups women seem to be receiving higher wages (on average) than men.     

The vintage schooling hypothesis and racial differences in earnings and on-the-job training: A longitudinal analysis

Why do younger black males earn more relative to whites than do older black males? The literature offers two competing explanations. Smith and Welch suggest this pattern is evidence that employers are rewarding the improved skills of more recently, better-educated blacks. Lazear, and Duncan and Hoffman suggest that the pattern is the result of employer discrimination that prevents blacks from entering occupations that offer on-the-job training (OJT) and wage growth with experience. The competing views are tested by using the National Longitudinal Survey of Labor Market Experience of Young Men to compare black and white earnings and regression estimates in two periods. Regression results for 1968 and 1978 indicate that, as the NLS cohort aged, only white males had an age-earnings profile exhibiting the positive effect of OJT. Over the period, education coefficients decreased for both groups with the reduction greatest in black coefficients. This suggests that the earnings effect of education is not as stable for blacks as it is for whites over the life cycle. Black-white earnings ratios were approximately the same in both periods. The results reported here support the explanations offered by Lazear and by Duncan and Hoffman, implying that policies focusing on eliminating racial differences in educational quality may be insufficient in improving the relative position of blacks over the life cycle.     

“Cautiously Optimistic” Comments on “Black Americans in the 21st Century: Should we be Optimistic or Concerned?”

This is a commentary on Angel Harris’ examination of the current state and challenges facing the black community. Harris provides a comprehensive overview of the socio-economic status of the black Americans and questions America’s ability to achieve the American “creed of opportunity”. My response to Harris’ question, “Should we be pessimistic or optimistic”, is that I am cautiously optimistic. My optimism is rooted in postsecondary progress of black despite challenges to affirmative action and the lingering test score gap between blacks and whites. However, I am “cautious” about the willingness of policy makers to use “race targeted” or “wealth-based-tested” programs to arrest practices which hinder employment, income and wealth opportunity.     

The Plight of African American Women: Employed and Unemployed

Understanding employment for African American women through the lens of neoclassical economics may not be best to help understand their plight. Their pay and the available employment has not been equal to that of men and even more so, African American women have lower paying jobs compared to their white counterparts, despite their achievement of higher levels of education. This paper looks at unemployment rates across the nation and then centers the discussion on black women in the context of the disparities over the past three decades. It combines the types of employment and wages that they have endured in context to white women during the same period of time. It uses Geographical Information Systems to underscore the concentration of income and race and the types of employment in those areas. It then provides some policy recommendations for the future.     

NEA Presidential Address: The role of race-conscious policies in addressing past and present discrimination

The impact of the current recession on the labor market situation of African-Americans highlights their longer-run plight. While there have been signs of improvement, especially during the 1960s, black per capita earnings have fallen despite improvements in their relative wages and occupational standing. Public debate over the recent Civil Rights Bill, the nomination of Justice Clarence Thomas, and the Supreme Court’s Croson decision, has raised again the issue of using race-conscious policies to address past and present discrimination. This article reports on a study of Birmingham, Alabama as a case study. It suggests that a combination of race-neutral and race-conscious approaches may be needed to address the problems blacks continue to face in the United States economy. This article was adapted from the Presidential Address to the National Economic Association, Allied Social Sciences Associations Meetings, January 3, 1992, New Orleans, LA.     

‘Th'ancient Distaff’ and ‘Whirling Spindle’: measuring the contribution of spinning to household earnings and the national economy in England, 1550–17701

The purpose of this article is to estimate the workforce involved in spinning from the late sixteenth century until the eve of mechanization. In addition, the potential contribution to family earnings from spinning will be examined. Just about all of the millions of yards of woollen yarn that went into making English cloth had to be spun by women and children, but this activity has not been investigated to the extent that it deserves. Spinning was a skilled occupation where there was a great demand for the best quality product. Sources exist which make it possible to make general estimates of the amount of spinning needed in the economy, and its cost. This evidence shows that employment in spinning increased dramatically from the late seventeenth century, and continued to increase until there were probably over one million women and children employed in spinning by the mid‐eighteenth century. In addition earnings increased to the extent whereby earnings from spinning could contribute over 30 per cent of household income for poorer families. This has implications for looking at trends in real wages over time, as well as for the concept of the industrious revolution.