Black unemployment in July 21 Left Business Observer

Andrew Kliman Andrew_Kliman at email.msn.com
Sun Aug 9 01:43:15 PDT 1998


On Saturday, August 08, 1998 10:07 PM, Gar W. Lipow wrote:

"Just wanted to comment on one point in your article on unemployment and how unemployment lowers wages."

The article's author was Heather Boushey, not Doug Henwood.

Gar: "You made the point that while *White* unemployment lowers wages, unemployment among the non skin privileged does not affect white wages in an area.

"... you have just removed an argument I have found very powerful in combatting racism -- the ability to argue to white workers that racism lowers their own standard of living. Let me ask: are you absolutely sure of this? Is it possible that non-skin privileged unemployment does lower wages for everybody -- just not as much as white unemployment?"

Unfortunately, this section of Boushey's article does not give any numbers, so it is a bit difficult to evaluate her claims. However, the findings she reports do *not* support the notion that "unemployment among the non skin privileged does not affect white wages in an area." Part of the problem is that the findings seem not to support a couple of conclusions she attempts to draw from them.

She writes that "the unemployment rate of [blacks and women] does not have a strong effect on the earnings of the aggregate population. ... Increases in unemployment for discriminated-against workers lowers all earnings, but to a *lesser extent* than the unemployment of non-discriminated-against groups."

Hence, the evidence indicates that an increase in unemployment among Blacks *does* lower the pay of white workers. It just does not lower their pay as much as does an increase in unemployment among whites. The evidence thus suggests that the answer to Gar's final question -- "Is it possible that non-skin privileged unemployment does lower wages for everybody -- just not as much as white unemployment?" -- is yes.

It should come as no surprise, BTW, that a rise in the white unemployment rate has a stronger negative effect on pay (of whites and Blacks) than does a comparable rise in the Black unemployment rate. Whites greatly outnumber Blacks, so a rise in the white rate corresponds to a much greater rise in the *aggregate* (white & Black) unemployment rate than does a comparable rise in the Black rate. Thus, if, as is in fact the case, wages of *both* groups are inversely related to the aggregate rate, a rise in the white rate will reduce wages for both groups much more than will a comparable rise in the Black rate.

Even in the absence of any segmentation in the labor market, then, Boushey's finding is exactly what we should expect. Labor market segmentation does exist, but, contrary to what she suggests, her findings do not seem to count as evidence of segmentation. (I hedge here because it is possible that she controlled for differences in the groups' sizes, though nothing in the article suggests that that was the case.)

Even more problematic is her claim that "These findings support the argument that it is in the interest of whites and men to maintain their privilege because it sustains their higher earnings." The term "higher" is unclear: higher than what? The context would seem to indicate that she means higher than the earnings they would have in the absence of discrimination. Yet her data showed that unemployment among Blacks REDUCES the earnings of whites. Moreover, the data imply that discrimination also REDUCES the earnings of whites: all else equal, a reduction in the Black unemployment rate toward the white rate would RAISE the earnings of whites.

It could be, however, that what Boushey means by "higher" is higher than the groups that suffer from discrimination. But if this is the case, the statement begs the question. No one doubts that whites benefit *relatively* from discriminatory wage differentials. That is a tautology. The question is whether they benefit *absolutely*; Boushey's own findings indicate that the opposite is the case. Moreover, if the statement is meant to refer to *relative* benefits from discrimination, we need to ask why the interests of white workers should be assessed in terms of them rather than in terms of *absolute* benefits. It is really plausible that, given the choice between (a) making $30,000 while Blacks also make $30,000, or (b) making $20,000 while Blacks make $10,000, the latter is in the interests (real and/or perceived) of white workers?

Andrew ("Drewk") Kliman Home: Dept. of Social Sciences 60 W. 76th St., #4E Pace University New York, NY 10023 Pleasantville, NY 10570 (914) 773-3951 Andrew_Kliman at msn.com

"... the *practice* of philosophy is itself *theoretical.* It is the *critique* that measures the individual existence by the essence, the particular reality by the Idea." -- K.M.



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