Racial discrimination in the labor market
There is substantial racial disparity in the American economy, and a major cause of this is discriminatory treatment within labor markets. The evidence is ubiquitous and includes careful research studies that estimate wage and employment regressions, help-wanted advertisements, audit and correspondence studies, and discrimination suits that are often reported by the news media. Yet there is broad agreement that there have been periods of substantial progress. For example, Donohue and Heckman (1991) provide widely accepted evidence that racial discrimination declined during the decade 1965-75. Nevertheless, there are some unanswered questions. Why did the movement toward racial equality stagnate and eventually decline after the mid-1970S? What is the role of the competitive process in the elimination or reproduction of discrimination within the labor market? In this chapter, we review recent literature on these topics. The Civil Rights Act of 1964 is the signal event that brought abrupt changes in the black-white earnings differential (Bound and Freeman 1989; Card and Krueger 1992; Donohue and Heckman 1991; Freeman 1973). Prior to passage of the federal civil rights legislation of the 1960s, racial exclusion was blatant. The adverse effects of discriminatory practices on the life chances of African Americans in particular during that period have been well documented (Wilson 1980; Myers and Spriggs 1997,32-42; Lieberson 1980). Cordero-Guzman (1990, I) observes that "up until the early 1960s, and particularly in the south, most blacks were systematically denied equal access to opportunities and in many instances, individuals with adequate credentials or skills were not, legally, allowed to apply to certain positions in firms." Competitive market forces did not eliminate these discriminatory practices in the decades leading up to the 1960s. They remained until the federal adoption of antidiscrimination laws. Newspaper help-wanted advertisements provide a vivid illustration of how open and visible such practices were. We did an informal survey of the employment section of major daily newspapers from three northern cities (the Chicago Tribune, the Los Angeles Times, and the New York Times) and from the nation's capital (the Washington Post) at five-year intervals from 1945 to 1965. (Examples from newspapers from southern cities are even more vivid.) Many advertisements in the 1960s explicitly indicated the employers' preference for applicants of a particular race, far more often for white applicants. Representative advertisements appear in table I. Among the newspaper editions we examined, the Washington Post of January 3, 1960, had the most examples of help-wanted ads showing racial preference, again largely for whites. Nancy Lee's employment service even ran an advertisement for a switchboard operator-presumably never actually seen by callers-requesting that all women applying be white. Advertisements also frequently included details about the age range desired from applicants, such as men aged 21-30 or women aged 18-25. Moreover, employers also showed little compunction about specifying precise physical attributes desired in applicants. I In January 1965, following the passage of the Civil Rights Act of 1964, none of the newspapers we examined carried help-wanted ads that included any explicit preference for "white" or "colored" applicants. However, it became very common in the mid-1960s to see advertisements for "European" housekeepers (a trend that was already visible as early as 1960). While race no longer entered the help-wanted pages explicitly, national origin or ancestry seemed to function as a substitute. Especially revealing is an advertisement run by the Amity Agency in the New York Times on January 3, 1965, informing potential employers, "Amity Has Domestics": "Scottish Gals" at $150 a month as "mothers helpers and housekeepers"; "German Gals" at $175 a month on one-year contracts; and "Haitian Gals," who are "French speaking," at $130 a month. Moreover, in January 1965, prospective female employees still were indicating their own race in the "Situations Wanted" section of the newspaper. The case of the help-wanted pages of the New York Times is of special note because New York was one of the states that had in place long prior to the passage of the federal Civil Rights Act of 1964 both a law against discrimination and a state commission against discrimination. However, the toothlessness of New York's state commission is well demonstrated by the fact that employers continued to indicate their racial preferences for new hires in help-wanted ads, as well as by descriptions of personal experience, such as that of John A. Williams in his semiautobiographical novel The Angry Ones ( 1996,30-31). Help-wanted ads were only the tip of the iceberg of the process of racial exclusion in employment. After all, there is no reason to believe that the employers who did not indicate a racial preference in ads were entirely open-minded about their applicant pool. How successful has the passage of federal antidiscrimination legislation in the 1960s been in producing an equal-opportunity environment where job applicants are now evaluated on their qualifications? To give away the answer at the outset, our response is that discrimination by race has diminished somewhat but is not close to ending. The Civil Rights Act of 1964 and subsequent related legislation has purged American society of the most overt forms of discrimination. However, discriminatory practices have continued in a more covert and subtle form. Furthermore, racial discrimination is masked and rationalized by widely held presumptions of African American inferiority. © 2004 by University of Michigan Press. All rights reserved.
Race, Liberalism, and Economics
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