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For Blacks, a Degree Doesn't Automatically Mean Higher Incomes : Wages: During the Reagan years, the richer got richer, the poor poorer, the middle class less secure. But people of color suffered the most.

September 02, 1990|Bennett Harrison | Bennett Harrison is visiting professor of political economy at Carnegie Mellon University, Pittsburgh. His latest book, with co-author Barry Bluestone, is "The Great U-Turn: Corporate Restructuring and the Polarizing of America" (Basic).

PITTSBURGH — Many blacks in this country, the argument goes, can't get good jobs because they drop out of high school. Those who go to college, receive an education and take advantage of affirmative-action policies, continues the argument, have a better than even chance of hitting the upper-income brackets.

This view is still true, but to a much lesser extent than it was a decade ago. A new study, conducted for the Ford Foundation and the Rural Economic Policy Program of the Aspen Institute by me and Lucy Gorham, shows that since the late 1970s there has been a dramatic deterioration in the earnings of working African-Americans--even for those with college decrees.

The Reagan legacy amounts to nothing less than the economic polarization of America. The rich got richer. The poor got poorer. And the hard-working middle class became more insecure than at any time since before World War II.

But people of color suffered most of all.

In 1979, one of three black workers in the United States earned poverty-level wages. By 1987, four of 10 were making that (inflation adjusted) wage--roughly $12,000 for a family of four. During the same period, the share of African-American workers with earnings three times the poverty line fell, from 7.2% to 5.6%. Thus, the frequently mentioned increase in middle-class black employees who no longer need equal-opportunity protection is a myth.

The lot of African-American college graduates has deteriorated as well. The number of well-educated black men receiving below-the-poverty-line wages grew faster than those earning more than $36,000, the study's high-earnings benchmark. On balance, the share of African-American male college graduates with wages higher than $36,000 has fallen since 1979, from nearly 1 in 4 to fewer than 1 in 5.

For college-educated black women, the 1980s were worse. Between 1979 and 1987, the number earning more than three times the poverty line declined by 10,000. This despite a net addition to the American labor pool of 407,000 black women with at least four years of college.

Not surprisingly, the situation for young black men was disastrous. Consider that of 25- to 34-year-olds, who might be expected to have settled down and begun a career. During the interval studied, the number of such men working but earning less than poverty wages increased by 161%. Put another way, the size of this group doubled during the 1980s, while the fraction earning more than three times the poverty line fell by half. And these statistics don't include those who dropped out of the active labor force.

The reasons are abundant. The devastation of many of the nation's basic manufacturing sectors--steel, auto, etc.--during the early 1980s hit black men especially hard. These industries produced jobs that offered a good living without the need for fancy educational credentials. The military had been another sure path to higher wages for people of color. But the new high-tech armed forces drastically increased entrance requirements, resulting in an immediate decline in the number and percentage of black recruits.

The cutbacks in the creation of good government jobs have also fallen especially hard on Americans of color. Since World War II, civilian government employment had consistently been a promoter of upward income mobility for blacks (and for white women). In the 1980s, the public sector either reduced hiring altogether, or shifted from hiring permanent employees (with civil-service protection) to recruiting people into part-time or temporary schedules.

Finally, a series of administrative and U.S. Supreme Court decisions during the decade has made it increasingly difficult for the victims of racial and gender discrimination to seek--let alone achieve--justice effectively.

Affirmative action, ironically, is more important than ever when the number of "good jobs at good wages" being created in the American economy declines, while the low-wage work accompanying deindustrialization and corporate restructuring grows.

Legislative efforts, such as the Civil Rights Act of 1990, would make it easier for workers of color who are discriminated against in hiring, promotions and wages to win lawsuits aimed at getting the incomes they have fairly earned. Both houses of Congress passed the bill early last month, and the President ought to sign it immediately.

As African-American and other minority groups work harder to educate themselves and to enter the labor force, competition for the good jobs can only intensify. The anemic rates of national economic growth that most experts predict for the foreseeable future (and that are actually favored by an inflation-conscious Federal Reserve Bank and Wall Street) guarantee that the pressure is unlikely to be relieved any time soon.

The deterioration in the earnings opportunities for black Americans who do work for a living is an unconscionable legacy of the politics and economics of the 1980s. It needs to be better understood. But most of all, it needs to be stopped.

LOSING GROUND

Proportion of blacks and whites with 4 or more years of college who earned more than $36,000a year.

Whites

1979: 26.6%

1987: 26.1%

Blacks

1979: 17.4%

1987: 13.1%

Source: Bennett Harison and Lucy Gorham, " What happened to Black Wages in the 1980's?, Economic Policy Institute, Washington, Autumn, 1990.

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