ANN ARBOR, MI — There’s no doubt that African-Americans have made enormous strides politically and socially since Martin Luther King Jr. died half a century ago – except in one troubling way.
America has elected a black president – and there are already two major black contenders for the Democratic Presidential nomination next year. When a Fortune 500 company names a black CEO these days, the press and the public barely notice.
There are also signs, especially in the Detroit area, that residential segregation is finally easing somewhat. Interracial couples no longer raise eyebrows in middle-class America.
But by one crucially important measure, blacks, especially black men, are not making progress: How much they earn, compared to white male workers. Charles Ballard, professor of economics at Michigan State University, has specialized for years in Michigan’s economy. Lately, he’s been studying how wage differences between black and white workers in this country – especially the industrial Midwest – have changed in recent decades, starting with 197 6.
Last week, he presented his preliminary findings in a speech to a dinner group in Ann Arbor; his title was “Black/White Earnings Differences: Worse Than You Think.”
When it comes to making progress on the earnings front, men have been slipping more than women – and African-Americans in the industrial Midwest, including Michigan and Ohio are moving in the wrong direction more than anywhere else in the nation.
In this part of the world, Ballard said “the real (inflation-adjusted) earnings of the median black man are lower now than they were 40 years ago.”
Why is this? The economist’s research is still ongoing, and he is reluctant to leap to conclusions. But his preliminary results indicate that two major factors may have been the decline in manufacturing jobs – especially auto assembly plant jobs – and the huge increase in white women entering the labor market.
Forty years ago, a significant number of married white women did not work outside the home, especially if they had children. That is seldom the case nowadays. Plus, manufacturing workers in plants organized by the United Auto Workers or another powerful union generally operated under contracts stipulating everyone was to be paid the same hourly wage, regardless of color.
The pro-worker Economic Policy Institute has published studies that support the MSU economist’s conclusions. According to their numbers, the median male black worker in 2000 made 73 percent of the earnings of a white one.
But by 2017, he was making only 69.7 percent of white workers’ wages. Why this was could have to do with employers preferring to hire white women. Black men also tend to have had less education, something crucial for most 21st century jobs.
What is clear is that this has troubling implications for Michigan, and the nation’s future. Professor Ballard concentrated mostly on comparisons between black and non-Hispanic white workers; the gap is much larger there, and Hispanic workers are a fairly small part of Michigan’s workforce.
The situation was somewhat different elsewhere in the nation. Starting around 1917, hundreds of thousands of blacks came north to work in the factories of cities like Detroit and Chicago.
Relatively better racial conditions were a factor – but probably not as much so as the much larger wages a black man could earn in the north. Gradually, that affected conditions in the South.
“As a result of northward migration as well as better, if still not great education, the earnings of African-Americans increased very substantially relative to the earnings of whites in the middle decades of the 20th century,” Ballard said.
But that then stalled, and began to go backwards. Interestingly, the professor also found that there is now virtually no difference between the earning power of black men in the north and south.
What about black women? They too have been faring worse in recent decades, “gaining much less ground or losing much more ground … everywhere,” but especially in the north.
Grimly, there is even more bad news for black men. For one thing, the difference between what they and their white counterparts make seems to get larger the higher up you get on the income scale.
Worse, Ballard noted, his comparisons “only involve people who are working.” He noted that relative to whites, “black men’s labor-force participation is very low,” due in part to incarceration rates and other factors. That may mean the average black family may be at even more of a disadvantage that the gap in pay scales show.
Black women, on the other hand, are in the labor force at even higher levels than white women, although often at low-paying domestic worker and other jobs.
Economists don’t like to make policy prescriptions, especially when their research isn’t complete. But it seems clear that somehow, policies have to be pursued that can help reduce the earnings gap.
Failing to do so may well mean bad news for us all.
