Also be sure to read a preview of the new report, Untamed: How to Check Financial, Corporate, and Monopoly Power.
Black workers today face a dual crisis of high unemployment rates and low wages, which intersect and reinforce one another. The black American unemployment rate is twice that of white workers at nearly every level of education, and as of 2011 black households earn only 59 cents for every dollar of white median household income. This gap has expanded since the 1960s.
We argue that the key drivers of current earnings disparities are laissez-faire rules, from “colorblind” approaches to employment policy to the rise of neoliberal economic regulation. By ignoring the racialized institutions undergirding our economy, these rules implicitly exclude black Americans from full participation. Specifically, we examine:
- The lack of inclusive rules designed to curb bias and correct for historical exclusions
- A failure to address the transitioning structures of the economy
- A shift away from full-employment and fair wage policies
Social scientists have offered a variety of alternative explanations for the persistence of the racial wage gap. Most often researchers attribute differences in compensation to human capital differentials in education, skills, personal attributes, and other factors. Yet while unequal educational outcomes and unequal access to educational opportunities certainly account for some of the wage differential, they do not fully explain the gap. In terms of wages, even black college graduates fare little better than whites with two-year associate degrees and face unemployment rates similar to white high school dropouts.
Here, we argue that a complex web of variables—education, gender discrimination, and racial bias, to name a few—interact with and are shaped by a historical and ongoing set of rules that drive unequal outcomes. The contemporary post-industrial economy is highly stratified, with the preponderance of job growth in low-wage retail and food service sectors, continued job loss in the public sector (especially state and local), and little diversity in the highest-paying sectors (technology, finance and banking). We also see worsening educational disparities by race. And we have no clear strategy for addressing any of these trends. Thanks to the hard work of many, we have a robust minimum wage movement, and we have a move to diversify the labor movement, built on a history of very active black participation (per capita) in unions. These efforts are very important, but they are not enough.
Today’s fissured workplace and the rise of the caring economy and service economy are—in the absence of a clear plan designed to lift workers of color—are likely to perpetuate the cycle of racial inequality in today’s labor markets.
Yet history teaches us that this cycle is neither intractable nor inevitable. In the mid-20th century, we saw an improvement in the racial wage gap. Through mobilization and civil disobedience, thousands of ordinary people in the civil rights movement challenged explicit racial inequality in American economic, social, and political institutions and rewrote the rules of the economy to make them racially inclusive, ushering in black participation in both the public and private sectors. Local, state, and national political decisions and policies—changes in the rules—that led to better labor market outcomes often focused on explicit racial inclusion: affirmative action policies that increased black representation in public sector and union jobs, enforcement of anti-discrimination policy, and desegregation of education, to name a few.
Our stalled progress on this front has been a choice. Only by recalibrating employment and wage growth strategies for our changed and changing economy—with a specific focus on black American workers and other workers of color—will we be able to make progress again.
Throughout this report we have illustrated how the racial rules have disadvantaged black Americans over the course of our nation’s history.
We now argue that it is time to again write inclusionary rules that will redress the past and present rules and inequities that shape the lives of black Americans.
- We must reckon with our history. Our nation has not fully reckoned with its fraught racial history, whether by acknowledging the truth of our often horrific and undemocratic history of racial apartheid or by recognizing and celebrating the times that we have made progress.
- We need to acknowledge that race-neutral policies are rarely race-neutral. Race-neutral policies are rarely race-neutral. They have racial consequences. From New Deal policies to mandatory minimum sentencing, race-neutral or colorblind policies have most often led to racially unequal outcomes. On some occasions, such as the Affordable Care Act or minimum wage increases, they can be positive steps toward reducing racial disparities. But even so, it is rare that such policies address the root causes of racial disparities.
- Trickle-down policies have disproportionately hurt people of color, but also the white middle and working classes. The rise of trickle-down ideology has led to a rollback of policies designed to promote inclusive growth and rein in rent-seeking. Disinvestment from public goods, permissiveness among regulators, and the erosion of worker power have increased economic insecurity and life outcomes for people of color, but also for low- and middle-income white Americans. Recent reports about rising mortality rates among low-income white Americans are a stark example of how these individuals and communities have been affected by the intersection of racial rules and economic inequality.
- We must move away from universal policies and towards targeted universal policies. In this report we have shown that universal policies have, as john powell argues, not only failed to address the needs of marginalized communities but disproportionately benefited whites and exacerbated the racial gaps. But these policies have not benefitted whites uniformly, and in fact over the past 30 years neoliberalism has also hurt the white middle class.
- Explicitly inclusive rules work. In the past, we have seen race-focused policies help to close the gap in outcomes between black and white. Further, we have seen the promotion of race-neutral policies stall and even roll back some of the progress furthered by racially explicit programs. A 21st-century plan for inclusion must accept the reality of unequal starting points and opportunities.
- Who writes the rules matters. People make rules, and it is critical that people in power are in every way diverse. We have shown in this report how black disenfranchisement and political exclusion throughout the majority of American history have resulted in a power imbalance in who gets to write the rules. In periods of greater racial political inclusion, representation, and power, we rewrote the racial rules to become more inclusive. Therefore, we should rewrite our electoral rules to ensure full political inclusion of marginalized communities and institutions that are genuinely inclusive.
Read the full report (available Wednesday morning) to see the rest of our recommendations.