Why Economic Tide Hit Young Black Men

THE economic tide is running against black people," says Harvard University economist Richard Freeman. "They are having troubles."Referring to a threat by President Bush to veto Democratic legislation aimed at strengthening civil rights law, Mr. Freeman said in an interview: "This is a time to strengthen rather than weaken the anti-discrimination pressures." Together with John Bound of the Population Studies Center at the University of Michigan, Freeman has just completed a study showing that during the late 1970s and 1980s the disparity between earnings of young black men and their white counterparts widened. This reversed a sizeable narrowing of the gap that followed passage of the 1964 Civil Rights Act. Freeman and Mr. Bound focused on young men because their wages and employment are more sensitive to current market realities than those of older workers with specific skills and seniority that may buffer them from market developments. In 1973, the two find, black wage and salary workers less than 10 years out of school earned 89 percent of the hourly earnings of whites with similar education and experience. By 1976 relative earnings had improved to 94 percent. But by 1989, they had slipped back to 82 percent. Further, by 1989, black male youths were 15 percentage points more likely not to have a job than their white counterparts, compared to 9 percentage points in 1973, the two economist note in a National Bureau of Economic Research paper. "What went wrong?" the two ask. The answer is complex. One factor, Freeman offers as an opinion, could be that affirmative action went too far at first. Some young black men may have been hired and promoted above their ability or education levels, compared to whites. Then, when the Reagan administration decreased the pressures on employers to increase minority employment and court interpretations of the civil rights law became less stringent, blacks lost any advantage from "reverse discrimination." 'Everyone," says Freeman, has "moral problems" with affirmative action for minorities when it becomes reverse discrimination against whites. Nonetheless, he would like the federal government to strengthen penalties against discrimination. Other factors eroding the earnings of black young men vary according to the category of youth. Black college graduates earned a premium over white college graduates in the mid-1970s. They were as likely to be managers or professionals. However, the supply of black graduates then increased rapidly. Moreover, during the 1980s, the disparity in incomes among all college graduates widened, depending on type of work, school quality, and so on. Black male graduates were apparently hit by both elements. By 1989, they were earning about 17 percent less than white graduates; they were 13 percent less likel y to be managers or professionals. Young blacks with high school education were underrepresented as craft-workers (carpenters, plumbers, etc.) but overrepresented as operatives (say assembly line workers) in the 1970s. By 1988-89 they were no more likely to be operatives but had fallen further behind whites as craft-workers. Blacks, who were 6 percent more likely to be union members in the mid-1970s, were hard hit by the decline in unionism since then. By now they are no more likely to be unionized (and thus probably receiving relatively high pay) than whites. This partially explains why the wage gap has widened, especially in the industrial Midwest. The decline in the real value of the minimum wage from 1980 to 1989 also hit black high school dropouts harder than whites. Another factor hurting these youths has been a huge increase in the proportion with a criminal record. These youths have a hard time getting good paid jobs, if any. One of four black male high school dropouts aged 25 to 34 is in jail nowadays, estimates Freeman. Many other black dropouts are on probation. "This is devastating," says Freeman. "If anything marks you for life, it is having a prison record."