The Equal Employment Opportunity Commission (EEOC) was established in 1965 to implement Title VII of the Civil Rights Act of 1964, which made it illegal to discriminate against an individual in employment on the basis of race, color, religion, sex or national origin. Coming into the 1960s, the employment opportunity that privileged the white male was much more than a job. By the 1960s, growing numbers of white men had employment that gave them steadily rising real earnings, often with decades of tenure at one organization. The “career-with-one-company” (CWOC) that had become the employment norm by the beginning of the 1960s included health insurance and a defined-benefit pension, both funded by the employee’s business corporation or government agency. CWOC is what, in the decades immediately after World War II, turned much of white America into a growing and thriving middle class. This was a white middle class made up of, at the lower end, blue-collar workers with no more than a high-school education. Union representation in collective bargaining enforced the unions’ first-hired, last fired “seniority” principle while securing wage increases in step with productivity growth, with “cost-of-living allowances” that adjusted wages for inflation usually built into the contracts. Aided by government subsidies such as the federal GI Bill and tuition-free higher education at state “land grant” colleges, the male offspring of the white blue-collar worker had ample opportunity to transition to higher incomes, superior benefits, and even more employment security as a white-collar worker. In the 1950s, the white male who had recently ascended to the upper echelons of the middle class became known as “the organization man.” In the immediate aftermath of the 1964 Civil Rights Act, African Americans with no more than a high-school education gained access to CWOC employment at the blue-collar level. Owing to strong demand for production workers in the 1960s and 1970s and affirmative-action support under the EEOC, Blacks were making inroads into white-male privilege by gaining substantial access to well-paid and secure operative and craft occupations; big steps up from the common-laborer jobs into which they had previously been segregated. In the first Working Paper of this series https://www.ineteconomics.org/research/research-papers/how-the-disappearance-of-unionized-jobs-obliterated-an-emergent-black-middle-class, we outlined how the decline of unionized jobs from the beginning of the 1980s decimated an emergent African American blue-collar middle class. Over the decades it became clear, however, that, while African Americans were hit earlier and harder than whites, they were not the only ones to fall out of the middle class. Increasingly, white blue-collar workers with no more than a high-school education also lost their middle-class status as the ideology that companies should be run to “maximize shareholder value” put a permanent end to the CWOC norm. Over subsequent decades and up to the present, growing numbers of American workers with only a high-school education, regardless of race, have experienced stagnating incomes, downward socioeconomic mobility, and even, at certain times, declining life expectancy. In this, the second working paper of our Fifty Years After book manuscript, we provide a statistical overview of the changes in employment and earnings of Blacks since the mid-1960s. If Title VII of the Civil Rights Act of 1964, along with other anti-discrimination laws from that period, and the formation of the Equal Employment Opportunity Commission promised progress toward racial equality in employment and general well-being, the current situation shows a very troubling picture. Across all dimensions of economic well-being that are dependent on access to decent paying, secure jobs, Blacks fare worse than whites. We present the most recent available data on the occupations (for 2019) and the industries (for 2018) in which the different Black, white, Hispanic, and Asian members of the U.S. labor force are employed. Then, using the decennial censuses, we examine the distributions of Blacks across aggregate categories of occupations from 1960 to 2010 to see the changing pattern of jobs held by Blacks, in broad terms, from the time of the Civil Rights Act to the present. We then look at the differences in Black and white unemployment and wage rates, with and without accounting for differences in education. The racial gap in wages, after accounting for education level, has widened. Stable jobs that enable employees to share in productivity gains and hence increase their real earnings over time facilitate the accumulation of wealth. In its various forms, wealth influences the current and future well-being of families and their children by enabling investments in education and training, providing savings to offset unforeseen circumstances, and funding retirement. Although manifest progress has been made by a portion of better-educated Blacks, the overall picture for wealth accumulation by Blacks in comparison with whites is grim. A race-based wealth gap should be no surprise, as access of African Americans to stable, well-paid jobs has always been much less than for whites. Yet, the size of wealth disparities is extremely large and has worsened over the last fifty years. Currently the median family wealth for whites is ten times that of Blacks. We examine the wealth gap within separate categories, including housing equity, housing stability measured by delinquency on mortgages and foreclosure, retirement savings and liquid savings, corporate shareholding, and student-loan debt. We also look at health insurance coverage because it functions, in part, like savings that can be called upon to deal with unanticipated events. And lack of health insurance can wipe out one’s accumulated wealth should one require hospitalization and/or expensive drugs. In every one of these components of wealth, Blacks trail whites by large and increasing amounts. Each of these indicators reflects the persistent and even growing Black-white disparities in earnings, employment security, and career patterns over time. Which leaves us with the question that the “Fifty Years After” project seeks to answer: What happened to equal employment opportunity? For a quest for economic equality to become a reality, the pay and stability of employment for Blacks must be improved far more than for whites. But in view of the downward mobility of white workers, even a substantial closing of the Black-white income gap will not solve the problems of poverty and injustice in the United States. Contrary to the situation in the 1960s, in the presence of the impoverished and vulnerable American working class of the 2020s, “equal employment opportunity” will not yield the upward socioeconomic mobility for Blacks that was possible in the 1960s and 1970s. The Covid-19 crisis is having an especially devastating impact on people of color, but workers of every race and ethnicity are feeling immense pain. Even when the public-health crisis has abated, the gargantuan political task for the years and decades ahead will be the restoration of employment opportunity that will enable all Americans to live healthy, secure, and happy lives.
In this introduction to our project, “Fifty Years After: Black Employment in the United States Under the Equal Employment Opportunity Commission,” we outline the socioeconomic forces behind the promising rise and disastrous fall of an African American blue-collar middle class. During the 1960s and 1970s, blacks with no more than high-school educations gained significant access to well-paid unionized employment opportunities, epitomized by semi-skilled operative jobs in the automobile industry, to which they previously had limited access. Anti-discrimination laws under Title VII of the 1964 Civil Rights Act with oversight by the Equal Employment Opportunity Commission supported this upward mobility for blacks in the context of a growing demand for blue-collar labor. From the late 1970s, however, the impact of global competition and the offshoring of manufacturing combined with the financialization of the corporation to decimate these stable and well-paid blue-collar jobs. Under the seniority provisions of the now beleaguered industrial unions, blacks tended to be last hired and first fired. As U.S.-based blue-collar jobs were permanently lost, U.S. business corporations and government agencies failed to make sufficient investments in the education and skills of the U.S. labor force to usher in a new era of upward socioeconomic mobility. This organizational failure left blacks most vulnerable to downward mobility. Instead of retaining corporate profits and reinvesting in the productive capabilities of employees, major business corporations became increasingly focused on downsizing their labor forces and distributing profits to shareholders in the form of cash dividends and stock buybacks. Legitimizing massive distributions to shareholders was the flawed and pernicious ideology that a company should be run to “maximize shareholder value.” As the U.S. economy transitioned from the Old Economy business model, characterized by a career with one company, to the New Economy business model, characterized by interfirm labor mobility, advanced education and social networks became increasingly important for building careers in well-paid white-collar occupations. Along with non-white Hispanics, blacks found themselves at a distinct disadvantage relative to whites and Asians in accessing these New Economy middle-class employment opportunities. Eventually, the downward socioeconomic mobility experienced by blacks would also extend to devastating loss of well-paid and stable employment for whites who lacked the higher education now needed to enter the American middle class. By the twenty-first century, general downward mobility had become a defining characteristic of American society, irrespective of race, ethnicity, or gender. Since the 1980s, the enemy of equal employment opportunity through upward socioeconomic mobility has been the pervasive and entrenched corporate-governance ideology and practice of maximizing shareholder value (MSV). For most Americans, of whatever race, ethnicity, and gender, MSV is the not-so-invisible hand that has a chokehold on the emergence of the stable and well-paid employment opportunities that are essential for sustainable prosperity.
As the Covid-19 pandemic takes its disproportionate toll on African Americans, the historical perspective in this working paper provides insight into the socioeconomic conditions under which President-elect Joe Biden’s campaign promise to “build back better” might actually begin to deliver the equal employment opportunity that was promised by Title VII of the Civil Rights Act of 1964. Far from becoming the Great Society that President Lyndon Johnson promised, the United States has devolved into a greedy society in which economic inequality has run rampant, leaving most African Americans behind. In this installment of our “Fifty Years After” project, we sketch a long-term historical perspective on the Black employment experience from the last decades of the nineteenth century into the 1970s. We follow the transition from the cotton economy of the post-slavery South to the migration that accelerated during World War I as large numbers of Blacks sought employment in mass-production industries in Northern cities such as Detroit, Pittsburgh, and Chicago. For the interwar decades, we focus in particular on the Black employment experience in the Detroit automobile industry. During World War II, especially under pressure from President Roosevelt’s Fair Employment Practices Committee, Blacks experienced tangible upward employment mobility, only to see much of it disappear with demobilization. In the 1960s and into the 1970s, however, supported by the Civil Rights Act and the Equal Employment Opportunity Commission, Blacks made significant advances in employment opportunity, especially by moving up the blue-collar occupational hierarchy into semiskilled and skilled unionized jobs. These employment gains for Blacks occurred within a specific historical context that included a) strong demand for blue-collar and clerical labor in the U.S. mass-production industries, which still dominated in global competition; b) the unquestioned employment norm within major U.S. business corporations of a career with one company, supported at the blue-collar level by mass-production unions that had become accepted institutions in the U.S. business system; c) the upward intergenerational mobility of white households from blue-collar employment requiring no more than a high-school education to white-collar employment requiring a higher education, creating space for Blacks to fill the blue-collar void; and d) a relative absence of an influx of immigrants as labor-market competition to Black employment. As we will document in the remaining papers in this series, from the 1980s these conditions changed dramatically, resulting in erosion of the blue-collar gains that Blacks had achieved in the 1960s and 1970s as the Great Society promise of equal employment opportunity for all Americans disappeared.
In the decade after the Civil Rights Act of 1964, African Americans made historic gains in accessing employment opportunities in racially integrated workplaces in U.S. business firms and government agencies. In the previous working papers in this series, we have shown that in the 1960s and 1970s, Blacks without college degrees were gaining access to the American middle class by moving into well-paid unionized jobs in capital-intensive mass production industries. At that time, major U.S. companies paid these blue-collar workers middle-class wages, offered stable employment, and provided employees with health and retirement benefits. Of particular importance to Blacks was the opening up to them of unionized semiskilled operative and skilled craft jobs, for which in a number of industries, and particularly those in the automobile and electronic manufacturing sectors, there was strong demand. In addition, by the end of the 1970s, buoyed by affirmative action and the growth of public-service employment, Blacks were experiencing upward mobility through employment in government agencies at local, state, and federal levels as well as in civil-society organizations, largely funded by government, to operate social and community development programs aimed at urban areas where Blacks lived. By the end of the 1970s, there was an emergent blue-collar Black middle class in the United States. Most of these workers had no more than high-school educations but had sufficient earnings and benefits to provide their families with economic security, including realistic expectations that their children would have the opportunity to move up the economic ladder to join the ranks of the college-educated white-collar middle class. That is what had happened for whites in the post-World War II decades, and given the momentum provided by the dominant position of the United States in global manufacturing and the nation’s equal employment opportunity legislation, there was every reason to believe that Blacks would experience intergenerational upward mobility along a similar education-and-employment career path. That did not happen. Overall, the 1980s and 1990s were decades of economic growth in the United States. For the emerging blue-collar Black middle class, however, the experience was of job loss, economic insecurity, and downward mobility. As the twentieth century ended and the twenty-first century began, moreover, it became apparent that this downward spiral was not confined to Blacks. Whites with only high-school educations also saw their blue-collar employment opportunities disappear, accompanied by lower wages, fewer benefits, and less security for those who continued to find employment in these jobs. The distress experienced by white Americans with the decline of the blue-collar middle class follows the downward trajectory that has adversely affected the socioeconomic positions of the much more vulnerable blue-collar Black middle class from the early 1980s. In this paper, we document when, how, and why the unmaking of the blue-collar Black middle class occurred and intergenerational upward mobility of Blacks to the college-educated middle class was stifled. We focus on blue-collar layoffs and manufacturing-plant closings in an important sector for Black employment, the automobile industry from the early 1980s. We then document the adverse impact on Blacks that has occurred in government-sector employment in a financialized economy in which the dominant ideology is that concentration of income among the richest households promotes productive investment, with government spending only impeding that objective. Reduction of taxes primarily on the wealthy and the corporate sector, the ascendancy of political and economic beliefs that celebrate the efficiency and dynamism of “free market” business enterprise, and the denigration of the idea that government can solve social problems all combined to shrink government budgets, diminish regulatory enforcement, and scuttle initiatives that previously provided greater opportunity for African Americans in the government and civil-society sectors.
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