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Local Labor Market Structure and the Implications for Black Unemployment in the Late 1980S
Abstract
This study examines local labor market structure as a factor influencing black unemployment rates in the late 1980s. It examines the impact of the local labor market structure on black unemployment relative to various characteristics of the labor force and human capital development of the black and white populations in the South. The study finds that the labor market structure is a greater predictor of black unemployment than of white employment. However, labor force characteristics are stronger predictors of black unemployment than is labor market structure. The human capital endowment of the black population is a significant but weak predictor of black unemployment. The impact of labor market, labor force, and human capital characteristics on black unemployment differed between counties inside and outside of an SMSA.
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The auto industry has traditionally been a major source of jobs and income for blacks. As jobs in U.S. companies decline, the newer Japanese plants, both manufacturers and suppliers, are not hiring blacks to a similar extent. The new American plants typically employ higher percentages of blacks than would be expected from their local laborsheds. This has resulted primarily from UAW contractual obligations to accept displaced workers. By contrast, the Japanese manufacturers and suppliers locate in areas with few blacks and hire fewer blacks than would be expected from the racial composition of their local laborsheds. While the data presented in this article have important policy implications, they do not themselves establish intent to discriminate because of the complexity of factors involved in plant site decisions. Nevertheless, there is a range of anecdotal data that do suggest that the Japanese have a "taste for discrimination."
This paper examines the hypothesis that the extraordinarily highrates of unemployment among black youth can be linked to a geographic mismatch between the residences of black youth and the jobs they might occupy. Chicago's labor market is examined in detail. The paper reports that black youth do in fact seem to live further from jobs than white youth do. However, the differences are not great enough to generate large differences in employment rates unless geographic search costs are very high. To explore the possible impact the differences really do have,a wide variety of models are examined and estimated.These models uniformly reject the hypothesis that a geographic mismatch is a major cause for black-white differences. Blacks who live near large concentrations of jobs seem to fair only slightly better than those who live far from such concentrations. And in areas where whites and blacks live in close geographic proximity, the racial employment differences remain very large.
This paper shows that participation in crime and involvement with the criminal justice system has reached extraordinary levels among young men. With approximately 2 percent as many men incarcerated as in the labor force, the crime rate should have plummeted. It didn't. Evidence suggests that the depressed labor market for low-skill American workers contributed to the continued high level of crime by less-educated men, despite incapacitation and the deterrent effect of imprisonment. The costs of incarceration are such that even marginally effective prevention policies can be socially desirable. Copyright 1996 by American Economic Association.
Time and value are related concepts that influence human behaviour. Although classical topics in human thinking throughout the ages, few environmental economic non-market valuation studies have attempted to link the two concepts. Economists have estimated non-market environmental values in monetary terms for over 30 years. This history of valuation provides an opportunity to compare value estimates and how valuation techniques have changed over time. This research aims to compare value estimates of benefits of a protected natural area. In 1978, Nadgee Nature Reserve on the far south coast of New South Wales was the focus of the first application of the contingent valuation method in Australia. This research aims to replicate that study using both the original 1978 contingent valuation method questionnaire and sampling technique, as well as state of the art non-market valuation tools. This replication will provide insights into the extent and direction of changes in environmental values over time. It will also highlight the impact on value estimates of methodological evolution. These insights will help make allocating resources more efficient.
Investment in education and training helps form the human capital - the skills and abilities - that is a vital element in assuring economic growth and individual advancement and reducing inequality. It is an important element in combating unemployment and social exclusion. Some of the returns to this investment can be measured; others cannot, though they are no less important.
This article examines racial occupational inequality in southern metropolitan areas over the forty-year period beginning in
1940 and ending in 1980. Remarkable stability in inequality between blacks and whites is observed between 1940 and 1970, followed
by a substantial decline in inequality between 1970 and 1980. Additionally, the relationship between the relative size of
the minority population and racial occupational inequality was observed to be strongly positive and significant in separate
analyses for each of the five decades, including 1980, after inequality had declined sharply. Similar results were obtained
from a pooled, cross-sectional time-series analysis.
The present study (1) examines changing levels of employment-related hardship among southern nonmetropolitan blacks for 1970-85, (2) compares the employment circumstances of nonmetropolitan black men and women with those of whites and blacks in the metropolitan South and in the North, and (3) assesses the contribution of black deficits in human capital and job characteristics to persistent racial inequality in rural employment adequacy. Data from the March annual demographic files of the Current Population Survey indicate that black employment hardship continues to be felt in nonmetropolitan areas, where two out of every five blacks are without jobs, cannot find a full-time job, or cannot earn enough to raise themselves significantly above poverty thresholds. Employment hardship among nonmetropolitan blacks continues to exceed that of blacks elsewhere, despite the comparatively rapid deterioration in employment conditions for northern and southern metropolitan blacks in the past decade. Finally, racial inequality in nonmetropolitan employment adequacy remains substantial in the 1980s and cannot be explained away by black deficits in human capital or by the disproportionate concentration of blacks in declining industrial sectors or in blue-collar occupations.
The authors begin their interpretation of urban restructuring in Los Angeles with a brief exposition of the historical development of capitalist urbanization as an evolving product of periodic crisis, class struggle, and induced social and spatial reorganization. This discussion is followed by an analysis of the contemporary restructuring process as it is being manifested more generally within the capitalist world economy and specifically within the US. -from Authors
In this article I examine the relationship between industrialization and the exclusion of southern blacks from cities and occupations between 1865 and 1910—an era dubbed by social historians as the New South. I demonstrate that the interaction of such factors as percentage of blacks, percentage of whites, and white racism played an important role in forcing blacks to participate in a secondary labor market. The findings show that ascriptive judgments often are the rule and not necessarily the exception when industrialization proceeds, populations expand, and racist ideology persists.
This paper assesses, for the 1970-1980 period, the statistical effects on black male joblessness of four dimensions of the recent restructuring of the U.S. economy: ( I ) the geographical pattern of overall employment growth and decline, (2) the decline of central city manufacturing employment, (3) the deconcentration of employment opportunities, and (4) the shift from the "Fordist" to more flexible modes of production. The analysis focuses on 45 metropolitan communities-1 1 SCSAs and 34 SMSAs-and relies on data from two machine readable census files: County Business Patterns and Public Use Micro Data Samples, Three analytical techniques are employed: cluster analysis, to identify groups of metropolitan communities with similar economic restructuring experiences; confirmatory discriminant analysis, to identify which elements of economic restructuring statistically distinguish the groups of metropolitan areas uncovered in the cluster analysis; and OLS regression, to determine how well the dimensions of economic restructuring emerging from the confirmatory discriminant analysis predict black male joblessness. The results indicate that the uneven growth and deconcentration dimensions of the economic restructuring process explain, more accurately than Wilson's deindustrialization hypothesis, geographical variations in joblessness in the US. urban system.
This paper analyzes the spatial structure of the labor market for highly trained labor employed in manufacturing industry in 1980. The locus of activity for this labor force is California-Metropolitan California in particular. Cities in the traditional manufacturing belt, such as Chicago and Detroit, also have a significant number of highly trained workers. The analysis confirms that this occupational group is concentrated at the metropolitan level, and that the degree of concentration is increasing. We examine the main dynamics of this labor market by isolating a primary circuit of labor flows. This primary circuit is made up of the metropolitan areas that have unusually large numbers of highly trained manufacturing labor. The study analyzes the intermetropolitan migration behavior of these workers using two sets of Poisson regression spatial interaction models and reveals that eastern metropolitan areas function as important nodes of dispersal. In contrast, this labor force is becoming increasingly concentrated in western metropolitan areas.
This article presents a comprehensive framework for studying the linkages between previous labor-force behavior and current labor-force positions. This approach can be used to study labor-force dynamics in new ways and to show how margianl work consists of several types of labor-market experience. These include most forms of job search or employment behavior identified in previous sociological and economic literature. Labor-force outcomes include both current labor-force participation and underemployment or part-time work. Both typologies are modifications of the Hauser-Sullivan-Clogg Labor Utilization Framework. The cross-classification of the two typologies provides an empirical definition of the labor-market matching process. This contingency table characterizes structure in that process. The association between labor-market experiences and labor-force outcomes is strong and remarkably stable over time.
This paper investigates the influence of the racial and ethnic composition of labor markets on earnings inequality among black, Hispanic, Asian, and white men to determine whether the influence on earnings of minority labor-market concentration differs by educational level. Consistent with other studies, the results, based on the 1980 5% Public Use Microdata Sample, show that Hispanic and nonwhite workers, compared with their white counterparts, lost earnings from residence and work in labor markets with a large share of monority residents and that this relationship was especially pronounced for black men. Further refinement of these results reveals additional differentation by educational groups: the earnings losses of black, Hispanic, and Asian men associated with residence in areas of high minority concentration are greatest among workers with college education and lowest among those who have not completed high school. That college-educated whites gained most from minority concentration emphasizes how both ascribed (race) and achieved (education) identifiers must coincide to generate white earnings advantages. Considered by themselves, neither racial nor educational divisions explain fully how earnings disparties are accentuated by the ethnic composition of labor markets.
Renowned American sociologist William Julius Wilson takes a look at the social transformation of inner city ghettos, offering a sharp evaluation of the convergence of race and poverty. Rejecting both conservative and liberal interpretations of life in the inner city, Wilson offers essential information and a number of solutions to policymakers. The Truly Disadvantaged is a wide-ranging examination, looking at the relationship between race, employment, and education from the 1950s onwards, with surprising and provocative findings. This second edition also includes a new afterword from Wilson himself that brings the book up to date and offers fresh insight into its findings. “ The Truly Disadvantaged should spur critical thinking in many quarters about the causes and possible remedies for inner city poverty. As policymakers grapple with the problems of an enlarged underclass they—as well as community leaders and all concerned Americans of all races—would be advised to examine Mr. Wilson's incisive analysis.”—Robert Greenstein, New York Times Book Review
Major U.S. cities have transformed industrially from centers of goods processing to centers of information processing. Concurrently, the demand for poorly educated labor has declined markedly and the demand for labor with higher education has increased substantially. Urban blacks have been caught in this web of change. Despite improvements in their overall educational attainment, a great majority still have very little schooling and therefore have been unable to gain significant access to new urban growth industries. Underclass blacks, with exceptionally high rates of school dropout, are especially handicapped. Whereas jobs requiring only limited education have been rapidly increasing in the suburbs, poorly educated blacks remain residentially constrained in inner-city housing. Within underclass neighborhoods, few households have private vehicles, which are shown to be increasingly necessary for employment in dispersing metropolitan economies. The implications of interactions among race, space, and urban industrial change are explored. Reasons for the success of recent Asian immigrants in transforming cities are considered, and policies are suggested to rekindle social mobility in the black underclass.
Examines the roles of metro-nonmetro differences in 1) demographic composition, 2) education, and 3) industrial mix in explaining metro-nonmetro differences in underemployment, as measured by the Labor Utilization Framework of Clogg and Sullivan (1983). Shows that composition alone accounts for about 40% of the difference in underemployment between metropolitan and nonmetropolitan areas. Educational composition is the single most important component accounting for this differential. -from Authors
Economists as well as scholars in other disciplines such as sociology have amassed a considerable body of knowledge concerning unemployment in the United States. For example, we know that the unemployment rate for non-whites is greater than that for whites and that females are generally unemployed at a rate greater than males (Flanagan 1978). It has also been shown that there is a close statistical association and a theoretical relation between labor force participation rates and unemployment rates (Barth 1988). In 1965 Lester Thurow reported the results of an econometric study of the structure of unemployment (Thurow 1965). The results of the Thurow study, among other conclusions, indicate that the various age, race and sex groups represented in the US labor force react quite differently to various economic phenomenon over the period 1948-63. Thurow's study centered on the analysis of an absorption and disabsorption model used to explain variations in the demographic group's unemployment rates. Two years after the publication of Thurow's study Robert A. Gordon published a study of employment and unemployment in the US economy which offered, to date, a unique mode of analysis, the dispersion index (Gordon 1967). Gordon cited a report to President Kennedy by the President's Committee to Appraise Employment and Unemployment Statistics which suggested that scholars and policy makers focused their attention almost solely on unemployment (primarily the aggregate of total work force unemployment) which limited our understanding of excess labor supply. Gordon saw this as an opportunity to develop a measure of unemployment which could be readily applied to unemployment problems of the kind analysed by Thurow. After the publication, in 1967, of Gordon's work no significant improvement of or new application of the dispersion of unemployment index has been witnessed.
This paper places racial inequality in the U.S. in the context of overol inequality. Not only is income maldistributed, but more importantly, productive property is highly concentrated in the hands of a few owners. Inequality of both income and property is even more severe for people of color. The paper contends that American capitalism is committed to inequality because the wealth of property owners depends upon impoverishment. Racial inequality is endemic to the system since capitalism spawns the colonial domination of people of color. Racism persists through assimilationism. The growth of a middle class of color does not negate racism since the middle class, regardless of race, is part of capitalist domination. The paper ends by suggesting how we ought to orient ourselves for social change.
Previous research found that the relative occupational position of Blacks in the North and South between 1910 and 1950 showed little change. Utilizing an index of occupational position, which was the fixed weighted averages of the proportion of Blacks or Whites in different skill categories, it was found that the occupational position of Blacks relative to Whites showed substantial improvement between 1950 and 1980 in both the North and South and the United States as a whole. Using an index of occupational position based on variable weights as well as an index of occupational standing provided additional support for this finding. The hypothesis that best explained the relative occupational progress of Blacks since 1950 was that it was achieved by public policy. Antidscriminatory measures enacted in the sixties increased the cost of discriminating and concomitantly decreased the desire or ability to discriminate.
Abstract This paper examines how the structure of the labor market differentially affects white men's underemployment in urban and rural areas. The effects of labor supply and demand, including special measures of public employment and two previously neglected aspects of competition—global industrial competition and sexual labor market competition—on unemployment, low-wage employment, and low-hours employment are examined. A higher proportion of females in the labor force in rural labor market areas provides benefits to men in the form of lower unemployment, but also costs them, through an increased prevalence of low-wage employment, while the opposite effects are evident for areas with concentrations in periphery service industries. The findings suggest that industrial restructuring in the form of increased foreign competition and an increased loss of core transformative jobs are especially threatening to rural men's employment adequacy.
The hypothesis that Black female wage earners face greater wage discrimination than their White female or Black male counterparts is supported by evidence derived from a version of a widely used method for decomposing wage differentials. This version allows one to measure both the “cost” of being a female or Black wage earner and the “benefit” of being a male or White wage earner. The approach yields a model which is validated by testing with Census Bureau samples (n1,2,3,4= 23,800). The empirical test indicates that when skills are fairly comparable, the Black female earns an average wage nearly 21 percent lower than the White male average, whereas the White female's average was 15.5 percent lower. It suggests that being female has a relatively greater impact on Black female wages than being Black.
The primary concern in this paper is to analyze the effects of black population concentration on black and white men's relative and absolute underemployment levels in labor market areas while controlling for the degree of occupational segregation by race. We draw hypotheses from two primary bodies of research; one literature focuses on general racial competition and the other considers competition to be more limited. Our findings that racial inequality in underemployment levels increases with blacks' population share are most consistent with the general competition model. However, we also find some support for the limited competition model which holds that not all whites benefit from increased competition with blacks. Finally, we find that occupational segregation helps to determine the form that racial discrimination in employment adequacy takes. Where occupational segregation is high, black men hold relatively more low-wage jobs, but where occupational segregation is low, they experience higher levels of unemployment and more disadvantage relative to whites.
This analysis uses establishment-level data on job creation and destruction to examine the unemployment rate responses of
black, Hispanic and white workers to shifts in demand across firms and industries during the period 1980–84. Black unemployment
rates are significantly more responsive to differences in aggregate demand growth and wage flexibility than are white and
Hispanic unemployment rates, and they are also more severely impacted by structural changes in labor demand than are white
and Hispanic unemployment rates. Additional research using the measures and focus of the present analysis that cover other
time periods can assist in developing a clearer picture of the contemporary dynamics of urban labor markets and can provide
guidance for public policy.
In his influential indictment of the Great Society, Charles Murray focused upon young black males being unemployed as the result of government programs. He is correct in stating that the employment problems of young black males have worsened since 1965 but wrong in asserting that older black males and white males had no employment problems. Labor force participation for all males has dropped since 1965. The employment problems of young black males resulted from sweeping changes in the job market and, secondarily, the revolution in female employment. Blue-collar jobs and full-time jobs are a smaller portion of the job market, while white collar and part-time jobs have increased substantially. Women have obtained a far higher proportion of all jobs than ever before, and sometimes in occupational categories dominated by males. Both the restructured job market and the competition of men and women for jobs, issues ignored by, Murray, raise painful policy dilemmas. To what extent should a politically powerless group like young black males be directly assisted in their employment struggles? To what extent should they be encouraged to migrate or secure further education? To what extent should women's employment be publicly supported through programs such as day care?
This study employs Census and related government data bases to analyze the effects of skills shifts on black male joblessness over the 1980's. Adapting skills mismatch and racial typing models, the author formulates conceptual arguments in support of the expectation that skills shifts contributed to a decline in relative demand for black males in major metropolitan labor markets in the 1980's. Innovative direct measures of within-occupation and compositional sources of skills change were developed and then applied to a series of OLS regression and decomposition analyses. Results indicated that skills shifts did have a uniquely negative impact on employment-to-population ratios for less educated black males. Further, deskilling in manual skills dimensions and upskilling in authority requirements within local labor markets decreased employment levels across all black male educational strata. In contrast to expectations, however, upskilling in substantive complexity had positive effects on black male employment-to-population ratios.
Neither human capital theory nor the declining discrimination hypothesis can account for the failure of the black-white employment gap to fall along with the wage gap. However, the weakness of the labor market since 1970 suggests that sustained employment discrimination in the context of restrictions on compensatory wage discrimination can explain these trends. This hypothesis is assessed with a cross-sectional model employing 1980 census summary data on SMSAs. The innovative feature of this model is the use of complaints of job discrimination received by the Equal Employment Opportunity Commission as proxies for actual discrimination. Results support the contention that the forms of discrimination have undergone a compositional shift and that employment discrimination reduces the probability of black employment.
This paper analyzes the impact of human capital and labor force variables and macroeconomic growth measures on inequality in the size distribution of earnings for the United States. Our technique utilizes a beta distribution of the second kind to approximate the distribution of earnings. We derive a measure of inequality that depends solely on the parameters of the beta distribution and that links human capital, labor force, and macroeconomic variables to changes in the parameters of the beta distribution. We then relate the changing parameters of the beta distribution to changes in the degree of inequality in the marginal distribution of earnings.
This important study identifies the effects of municipal privatization on blacks and Hispanics. The author examines three fundamental issues: how privatization affects minority employment in municipal government; how it affects minority employment in the resulting private sector positions; and how it affects city contracting among minority-owned businesses. Contents: Introduction; Privatization in Theory and Practice; The Impact of Privatization on Minority Employment in Government; The Impact of Privatization on Minority Employment in the Private Sector; The Impact of Privatization on Minority Business Opportunities; Recommendations.
"This article examines significant demographic trends that illustrate the advances of many black Americans from 1954 to 1984. We also examine trends which indicate deterioration in the socioeconomic circumstances and life chances of a significant portion of the black population. The two competing trends in the status of black Americans (at one extreme an emerging black elite, at the other a growing black underclass) have been central in provocative debates about economics and race over the past decade. This article locates the debate in historical context, summarizing the work of early theorists on this issue." The authors use U.S. census data "to document changes from 1950-1980 in occupational distribution, labor force participation, educational attainment, income and earnings, fertility and mortality rates, and family organizational patterns for blacks and whites. Using the political economy perspective, we argue that race and economic status are inexorably linked in this society. Shifts in the society's economic base coupled with historical (and contemporary) patterns of racial oppression explain the disproportionate concentration of blacks in the underclass."
Objective. This study documents the magnitude of four types of underemployment experienced by both native-born minority and ethnic immigrant male and female workers in the United States and tests a “double disadvantage” economic outcome hypothesis that minority workers tend to be channeled into secondary-sector jobs and that immigrant workers face initial disadvantages in labor force assimilation. Method. Data for men and women aged 25-64 who are in the labor force and not attending school were derived from the 1990 Census Bureau Public Use Microdata Sample. Multinomial logistic regression procedures were used to estimate the effect of minority group membership and immigrant status on the odds of unemployment, part-time employment, working poverty, and job mismatch, relative to adequate employment. Results. Descriptive results showed greater overall underemployment among females than males. Blacks and Hispanics had higher unemployment and working-poverty rates compared to non-Hispanic whites and Asians, with job mismatch highest among Asians. Immigrant underemployment was greater than that of the native-born. Asians posted the largest disparity in immigrant versus native-born underemployment, and blacks had the smallest. Multivariate models showed that minority group effects were stronger than immigrant status effects in predicting underemployment. Increased likelihood of underemployment across the different minority groups versus non-Hispanic white workers was not fully accounted for by the expected influences of human-capital, demographic, industry, and occupational variables. Conclusion. The double disadvantage hypothesis of minority group and immigrant status is accepted only for Asian men and women with jobs mismatched to their skills and for Asian women, who are most likely to be unemployed or be among the working poor.
Race, Gender, and Jobs: Losing Ground on Employment
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Racial differences in the unemployment response to structural changes in local labor markets" in African-Americans and Post-Industrial Labor Markets edited by James Stewart (Transaction Publishers) chapter 14Economic restructuring and black male joblessness in U.S. metropolitan areas
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A double disadvantage? Minority group, immigrant status and underemployment in the U
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The status of urban blacks 25 years after the Civil Rights Act of 1964
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