Prosperity For All?

Prosperity For All?: The Economic Boom and African Americans

Robert Cherry
William M. Rodgers
Copyright Date: 2000
Published by: Russell Sage Foundation
Pages: 348
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  • Book Info
    Prosperity For All?
    Book Description:

    With the nation enjoying a remarkable long and robust economic expansion, AfricanAmerican employment has risen to an all-time high. Does this good news refute the notion of a permanently disadvantaged black underclass, or has one type of disadvantage been replaced by another? Some economists fear that many newly employed minority workers will remain stuck in low-wage jobs, barred from better-paying, high skill jobs by their lack of educational opportunities and entrenched racial discrimination.Prosperity for All?draws upon the research and insights of respected economists to address these important issues.

    Prosperity for All?reveals that while African Americans benefit in many ways from a strong job market, serious problems remain. Research presented in this book shows that the ratio of black to white unemployment has actually increased over recent expansions. Even though African American men are currently less likely to leave the workforce, the number of those who do not find work at all has grown substantially, indicating that joblessness is now concentrated among the most alienated members of the population. Other chapters offer striking evidence that racial inequality is still pervasive. Among men, black high school dropouts have more difficulty finding work than their Latino or white counterparts. Likewise, the glass ceiling that limits minority access to higher paying promotions persists even in a strong economy.Prosperity for All?ascribes black disadvantage in the labor force to employer discrimination, particularly when there is strong competition for jobs. As one study illustrates, economic upswings do not appear to change racial preferences among employers, who remain less willing to hire African Americans for more skilled low-wage jobs.

    Prosperity for All?offers a timely investigation into the impact of strong labor markets on low-skill African-American workers, with important insights into the issues engendered by the weakening of federal assistance, job training, and affirmative action programs.

    eISBN: 978-1-61044-123-0
    Subjects: Business, Sociology

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
    (pp. ix-xii)
    (pp. xiii-xiv)
    Robert Cherry and William M. Rodgers III
    (pp. xv-xxvi)
    Robert Cherry and William M. Rodgers III

    Between 1982 and 1989, the United States unemployment rate fell from 10.8 percent to 5.5 percent, with over 21 million new jobs created. Despite structural changes—the shift away from government and manufacturing employment, for example—major metropolitan areas, disproportionately home to African Americans, fared reasonably well. Unemployment rates in large cities fell just as much as they did in smaller cities and nonurban areas.

    There were, however, limitations to the 1980s expansion. Official unemployment rates for men aged twenty to sixty-four years old did not, for instance, reach the low levels that they had at the previous business cycle’s...

  6. PART I Employment and the Boom
    • Chapter 1 The Effect of Tighter Labor Markets on Unemployment of Hispanics and African Americans: The 1990s Experience
      (pp. 3-49)

      This chapter examines the unemployment rates of Hispanics, African Americans, and non-Hispanic whites during the recession of 1990 to 1992 and the expansion of 1992 to 1996 in order to investigate and compare the effect of tighter labor markets on these groups.¹ Differences in time worked during an average week significantly affect the racial and ethnic disparities in earnings in the United States, and cyclical variation in time worked during an average week is driven primarily by variation in unemployment rates. Unemployment rates are not only higher for African Americans and Hispanics than for non-Hispanic whites, but they also have...

    • Chapter 2 Area Economic Conditions and the Labor-Market Outcomes of Young Men in the 1990s Expansion
      (pp. 50-87)

      The 1990s economic boom has made the American job market the envy of the world. The proportion of the adult population that is employed has increased to the highest level in history. Unemployment has fallen far below the 6 to 7 percent level that many economists and policy-makers believed was the “NAIRU”—nonaccelerating-inflation rate of unemployment. And while throughout much of the 1980s and 1990s, real wages of workers stagnated, in the late 1990s, real wages began to rise, and at least some workers in the bottom of the distribution saw their first gains in real earnings after years of...

    • Chapter 3 Black-White Employment Differential in a Tight Labor Market
      (pp. 88-109)

      During 1999, the civilian unemployment rate in the United States reached 4.2 percent—the lowest recorded level since the late 1960s. In sharp contrast to the 1970s and 1980s, when economists were asking why the “natural rate” of unemployment seemed to be so high (Hall 1970), economists and policy-makers are now asking why the unemployment rate is so low. While the unemployment rate is low, inflation also appears to be in check, leading many economists to hypothesize that the “natural rate” of unemployment has fallen below 5 percent (Katz and Krueger 1999).

      Is the labor market now fundamentally different from...

    • Commentary I Urban Racial Unemployment Differentials: The New York Case
      (pp. 110-126)

      Recent empirical studies have uncovered marked geographic variations in the unemployment experiences of racial and ethnic groups in the United States. In particular, both the levels and cyclical trends of African American joblessness and of the black-white unemployment gap appear to differ greatly by region, metropolitan area, and city. Thus Richard B. Freeman and William M. Rodgers III (this volume) find large differences in these measures among young men (sixteen- to twenty-four-year-old nonstudents) in three metro area groupings: those with continuous low unemployment throughout the 1990s, those with steady high unemployment during the decade, and those areas enjoying rapid drop...

  7. PART II Racial Discrimination and the Boom
    • Chapter 4 How Labor-Market Tightness Affects Employer Attitudes and Actions Toward Black Job Applicants: Evidence from Employer Surveys
      (pp. 129-159)

      The labor-market situation for young black and Hispanic male workers was grim throughout the 1980s and 1990s. Following a narrowing of the unemployment gap between black and white workers in the 1970s, things turned worse in the early 1980s and have not improved, in the aggregate, until quite recently (Bound and Freeman 1992; Moss and Tilly 1991, 2000a, 2000b). Based on the idea that employers facing a thinner pool of potential employees as unemployment falls will tend to hire people whom they might have been less likely to hire when there were more potential workers to choose from, one would...

    • Chapter 5 Exclusionary Practices and Glass-Ceiling Effects Across Regions: What Does the Current Expansion Tell Us?
      (pp. 160-187)

      The wage gap between African Americans and whites lessened during the 1970s, but began to increase again during the 1980s (Bound and Freeman 1992). The 1990s expansion modestly reduced racial inequality in employment among men and slightly widened it among women. Thus, racial earnings ratios at the end of the century are not very different from what they were fifteen years earlier. Conventional analysis of this phenomenon has focused on human-capital variables or changes in the industrial mix of jobs. The explanation for continuing inequality between African American and white workers, however, might lie in racial differences in occupational distributions,...

    • Chapter 6 What Do We Need to Explain About African American Unemployment?
      (pp. 188-207)

      After a long period in the 1980s when African American communities experienced double-digit unemployment rates, the post-1992 economic expansion has consistently produced black adult-unemployment rates of less than 10 percent. When the African American unemployment rate dipped to 8.2 percent in 1998, it reached its lowest level since 1972, the first year for which the Bureau of Labor Statistics broke down unemployment figures into white, black, nonwhite, and nonblack categories. When African American joblessness remained intractably high during the 1980s, theories of labor deficiencies in the African American community became the preferred policy shorthand for explaining African American unemployment. However,...

    • Commentary II In Good Times and Bad: Discrimination and Unemployment
      (pp. 208-214)

      Racial discrimination in American labor markets is less overt today than it was forty years ago. Help-wanted signs no longer list the desired race of job applicants; there are no longer separate pay scales for black and white teachers or black and white social workers. A wage gap does persist, but, according to recent studies, up to 95 percent of that gap can be attributed to differences in human capital, occupation, and industry (O’Neill 1990). Some social scientists no longer regard racial discrimination as a “first order” problem in U.S. labor markets (Heckman 1998, 101).

      Unfortunately, declarations that discrimination is...

  8. PART III Social Dimensions of the Boom
    • Chapter 7 Looking at the Glass Ceiling: Do White Men Receive Higher Returns to Tenure and Experience?
      (pp. 217-244)

      The last few years in the United States have been a period of general expansion and tighter labor markets. Despite that, however, earnings gains by women and minorities relative to white men have been unremarkable, and somewhat disappointing for women in particular, compared to progress made in the 1980s. Consider the Bureau of Labor Statistics data on median weekly earnings ratios for selected years in the 1980s and 1990s presented in table 7.1, contrasting specifically the rising relative earnings for women from 1984 to 1991 to the slowed gains of 1991 to 1998. White and black women alike record only...

    • Chapter 8 Barriers to the Employment of Welfare Recipients
      (pp. 245-278)

      The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 ended the federal guarantee of cash assistance and replaced the Aid to Families with Dependent Children Program with the Temporary Assistance for Needy Families (TANF) Program. Receipt of TANF funds is limited to five years or less, at state option.¹ Such changes at the federal level reflect, in part, state-level experiments that had been conducted over the past two decades. Prior to 1996, more than half of the states had instituted work requirements for some portion of their welfare caseloads (under the Job Opportunity and Basic Skills Program of...

    • Chapter 9 The Impact of Labor Market Prospects on Incarceration Rates
      (pp. 279-307)

      There is a long-standing theoretical proposition stating that prisons serve as labor-market equilibriating devices (Rusche and Kirchheimer 1939). When there is superfluous labor, imprisonment rates rise to drain off unwanted workers. When labor shortages exist, imprisonment rates adapt to release needed workers into the labor market. If this proposition is correct, then during the most recent period of substantially tightening of labor markets, should there have been a reduction in imprisonment? Should the least-wanted workers, young black males, have experienced declines in their incarceration rates? In other words, if the proposition is correct, tighter labor-market conditions should be accompanied by...

    • Commentary III Glass Ceilings, Iron Bars, Income Floors
      (pp. 308-312)

      Differences and changes in economic status across demographic groups have been well documented. The occupation of policy-oriented scholars has been to interpret these differences and to propose remedies. A central point of disagreement and focus of investigation has been whether low economic status results from individual failures of one sort or another, or from forces that lie largely outside individuals’ control. These papers, although far ranging, all touch upon this common theme.

      Chapters by Joyce P. Jacobsen and Laurence M. Levin, and William Darity Jr. and Samuel L. Myers Jr. fall into the “outside forces” camp. Jacobsen and Levin focus...

  9. INDEX
    (pp. 313-322)