Report: ‘Racial Rules’ Widen Economic Inequality for African Americans

AP Photo/Alan Diaz

In this photo taken Wednesday, June 10, 2015, Lashrundra Wilfork, right, helps her daughter, Nala Wilfork, fill out a job application at a job fair in Sunrise, Florida. 

The income gap between rich and the poor Americans is the highest it has been in nearly 100 years, but the racial inequality gap is even wider. From high school graduates to graduate degree holders, black men and women today continue to earn less than similarly skilled white men and women. Yet missing from this conversation is a full understanding of the historical forces that have constrained African American earning power.

The Washington-based Roosevelt Institute, a nonprofit economic think tank, recently released the study, “Rewrite the Racial Rules: Building an Inclusive American Economy,” that explains how the country’s racial history affects the national economic landscape that African Americans must navigate. “A series of racial rules has really set the foundation for the racial and economic inequality,” explains Andrea Flynn, an Institute fellow who co-authored the study.

The end of slavery did little to address income disparities between whites and blacks who remained in the South after the Civil War. The report notes that the region’s racial rules dictated that black people were subject to another form of slavery, “whereby the Southern economy relied on the exploitation of sharecropper labor.” Newly emancipated slaves were subject to “Black Codes,” laws that restricted every aspect of a black person’s existence. In Mississippi and elsewhere, African Americans were required to show written proof of employment or they would be charged with vagrancy.  

Racial rule making persisted through the New Deal. To get Southern Democrats to sign on to the historic measures that included Social Security, employer-subsidized health care, a 40-hour work week, and other reforms, the Roosevelt administration excluded certain sectors like domestic work and agriculture that were predominately black. “While these rules vastly expanded labor protections for white workers, they—and the labor rules that would follow in the next four decades—continued the New Deal’s legacy of excluding blacks,” the report indicates.

It was not until the passage of the Civil Rights Act of 1964 that African Americans began to see real changes in their economic status and a shift in the laws that governed employment. Policies like affirmative action, designed to combat racism in education and employment, and institutions like the U.S. Equal Employment Opportunity Commission, the federal agency that enforces civil rights laws in the workplace, helped bolster the economic status of African Americans.

The report found that the wage gap between white and black men declined in the succeeding decades. The disparities in average weekly earnings fell to 25 percent in 1980, down from 40 percent in 1960 for African American men born in previously segregated Southern states. “We actually did see incomes rise and employment improve thanks to affirmative action policies,” says Flynn.  “It was incomplete progress, but there was an indication that it was a move in the right direction.”

But just as black Americans found their economic footing, the post-World War II manufacturing sector began to crumble. The shift from industrial employment to a growing service sector produced an increase in low-wage employment with little job security. These positions offered few or no benefits.

By 1980, the economic progress that blacks made during the civil rights era had plateaued. Today, explains Flynn, “there’s a perception that we’re all starting from the same place.” That perception colors how whites evaluate African American success: 66 percent of adults, including 71 percent of whites and 53 percent of blacks, believe that the primary reason that blacks can’t get ahead lies with personal shortcomings and not discrimination.

Yet American workplaces remain highly segregated. After 1980, many employment sectors lost ground on diversity: Between 2001 and 2005, nearly one-third of all industries, including transportation services and banking showed a trend toward resegregation among white men and black men.

The report concludes that race-neutral rules won’t work since slavery and Jim Crow produced discriminatory attitudes and practices that have been difficult to eradicate and still pervade American society today, noting that “The enduring legacy of black slavery is built into our current institutions, policies, programs, and practices and has multigenerational impacts on the life chances and outcomes of black Americans.”

The report suggests that in order to create a more inclusive economy, the U.S. still must rely on racially explicit affirmative action policies and anti-discrimination mandates. African Americans saw modest gains in employment and education after race-specific policies like affirmative action policies were implemented.

Lawmakers and business leaders also must tackle issues that would benefit all workers, but would have a greater impact on communities of color, including increasing the minimum wage, guaranteeing paid sick leave, and providing affordable health care and child care so women can stay in the workforce.  

“The encouraging thing is that we’ve started to see traction on this, there’s not a lack of energy to make a number of these [policy changes],” says Flynn. The rewriting of the rules seems to be coming about in a patchwork manner with different progressive cities and states passing laws, but little movement on the federal level, meaning conservative states that are hostile to progress are unlikely to pass similar legislation. “In conservative states, where people need these policies most, are going to be left out,” says Flynn.

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