Downplaying and Explaining The Racial Unemployment Gap

Looking at the persistence of the 2-to-1 Black/White unemployment ratio, Andy Kroll notes three major things:

1. That ratio resists explanation:

“The hollowing-out of America’s cities and the decline of domestic manufacturing no doubt played a part in black unemployment, but then chronic black joblessness existed long before the upheaval Wilson described. Even when employment in the manufacturing sector was at its height, black workers were still twice as likely to be out of work as their white counterparts.

Another commonly cited culprit for the tenaciousness of African-American unemployment has been education. Whites, so the argument goes, are generally better educated than blacks, and so more likely to land a job at a time when a college degree is ever more significant when it comes to jobs and higher earnings. In 2009, President Obama told reporters that education was the key to narrowing racial gaps in the US. “If we close the achievement gap, then a big chunk of economic inequality in this society is diminished,” he said.

Educational levels have, in fact, steadily climbed over the past 60 years for African Americans. In 1940, less than 1% of black men and less 2% of black women earned college degrees; jump to 2000, and the figures are 10% for black men and 15% for black women. Moreover, increased education has helped to narrow wage inequality between employed whites and blacks. What it hasn’t done is close the unemployment gap.

Algernon Austin, an economist for the Economic Policy Institute in Washington, D.C., crunched data from the Bureau of Labor Statistics and found that blacks with the same level of education as whites have consistently lower employment levels. It doesn’t matter whether you compare high-school dropouts or workers with graduate degrees, whites are still more likely to have a job than blacks. Degrees be damned.”

Academics have thrown plenty of other explanations at the problem: declining wages, the embrace of crime as a way of life, increased competition with immigrants. None of them have stuck. How could they? In recent decades, the wage gap has narrowed, crime rates have plummeted, and there’s scant evidence to suggest immigrants are stealing jobs that would otherwise be filled by African Americans.

Indeed, many top researchers in this field, including several I interviewed, are left scratching their heads when trying to explain why that staggering jobless gap between blacks and white won’t budge

2. The Black unemployment rate is consistently underestimated as the usual figures do not take into account the incarcerated population:

“In the mid-1990s, academics Bruce Western and Becky Pettit discovered that the American prison population lowered the jobless rate for black men by five percentage points, and for young black men by eight percentage points. (Of course, this applies to whites, Asians, and Hispanics as well, but the figures are particularly striking given the overrepresentation of blacks in the prison population.)

Even that vast incarcerated population pales, however, in comparison to the number of ex-cons who have rejoined the world beyond the prison walls. In 2008, there were 12 million to 14 million ex-offenders in the U.S. old enough to work, according to the Center for Economic and Policy Research (CEPR). So many ex-cons represent a serious drag on our economy, according to CEPR, sucking from it $57 billion to $65 billion in output.

Of course, such research tells us how much, not why — as in, why are ex-cons so much more likely to be out of work?”

3. The answer is the persistence of institutional racial discrimination:

“In 2001, a pair of black men and a pair of white men went hunting for work in Milwaukee, Wisconsin. Each was 23 years old, a local college student, bright and articulate. They looked alike and dressed alike, had identical educational backgrounds and remarkably similar past work experience. From June to December, they combed the Sunday classified pages in the Milwaukee Journal Sentinel and searched a state-run job site called “Jobnet,” applying for the same entry-level jobs as waiters, delivery-truck drivers, cooks, and cashiers. There was one obvious difference in each pair: one man was a former criminal and the other was not.

If this sounds like an experiment, that’s because it was. Watching the explosive growth of the criminal justice system, fueled largely by ill-conceived “tough on crime” policies, sociologist Devah Pager took a novel approach to how prison affected ever growing numbers of Americans after they’d done their time — a process all but ignored by politicians and the judicial system.

So Pager sent those two young black men and two young white men out into the world to apply for perfectly real jobs. Then she recorded who got callbacks and who didn’t. She soon discovered that a criminal history caused a massive drop-off in employer responses — not entirely surprising. But when Pager started separating out black applicants from white ones, she stumbled across the real news in her study, a discovery that shook our understanding of racial inequality and jobs to the core.

Pager’s white applicant without a criminal record had a 34% callback rate. That promptly sunk to 17% for her white applicant with a criminal record. The figures for black applicants were 14% and 5%. And yes, you read that right: in Pager’s experiment, white job applicants with a criminal history got more callbacks than black applicants without one. “I expected to find an effect with a criminal record and some with race,” Pager says. “I certainly was not expecting that result, and it was quite a surprise.”

Pager ran a larger version of this experiment in New York City in 2004, sending teams of young, educated, and identically credentialed men out into the Big Apple’s sprawling market for entry-level jobs — once again, with one applicant posing as an ex-con, the other with a clean record. (As she did in Milwaukee, Pager had the teams alternate who posed as the ex-con.) The results? Again Pager’s African-American applicants received fewer callbacks and job offers than the whites. The disparity was particularly striking for ex-criminals: a drop off of 9 percentage points for whites, but 15 percentage points for blacks. “Employers already reluctant to hire blacks,” Pager wrote, “appear particularly wary of blacks with known criminal histories.””

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