Magazine article Regional Economist


Magazine article Regional Economist


Article excerpt

How significant was the economic progress of African- American men in the U.S. between 1970 and 2000? The common perception is that inequality between races decreased. In 1954, the Supreme Court's decision in the famous Brown v. Board of Education case proclaimed racial segregation of public schools unconstitutional. The ruling eventually paved the way for the Civil Rights Act of 1964, which outlawed racial segregation in schools and in the workplace, among other provisions. The act opened doors to better education, including higher education, for black children. Because it made racial discrimination illegal, the new law offered greater opportunities to African-Americans in the labor markets.

Did these societal changes translate into economic changes, as well, for blacks? Did earnings of blacks increase relative to earnings of whites? Did the position of black men in the labor force become more secure? How much did educational attainment and skill acquisition improve?

Most of the research on these topics is done on a national level.1 Such studies, at most, "control for" a region (such as the South, Northeast, Midwest, etc.) and/or whether a person resides in an urban/rural area. This article examines and compares various aspects of African-American progress in labor markets between 1970 and 2000 across 14 large metropolitan areas of the country.2 There are several reasons for performing such analysis at the city level rather than at the national level. First, cities in the U.S. vary widely in their characteristics, including labor market conditions and industrial structure. Second, and more important, the history of black population is very different in different regions of the country. Finally, a recent study demonstrates that it is important to take into consideration geographic location when studying racial differences.3

It seems reasonable, therefore, to study economic progress of African-Americans in a context of a specific labor market and then compare it across cities.4 To be more precise, by "city" we mean a Metropolitan Statistical Area (MSA) as defined by the Census Bureau.5 In our analysis, we concentrated on black men who are 25 to 55 years old and compared them to non-Hispanic white men. We plan to perform a similar analysis for women in our future research.

Changes in Relative Wages

Many studies concentrate on wages as a measure of earnings. It is a logical approach because the wage is the price that labor markets put on a unit of skilled labor. In this case, a decrease in the black-white wage gap would mean that labor markets' valuations of black and white labor were converging. It also would indicate the convergence of skill levels of black and white workers.

The left panel in Table 1 compares the average weekly wages of black and white men for each of the 14 cities.6 There was an increase in relative weekly wages of black men between 1970 and 2000 in all but three cities.

Atlanta experienced the largest increase in relative wages of black men. In 1970, black men in Atlanta were making about 62 percent of white men's weekly wages. By 2000, the ratio had increased by 16 percentage points, to 78 percent. Philadelphia, Chicago and Detroit saw relative wages of black men decrease between 1970 and 2000 but only slightly: from 79 to 77 percent in Philadelphia, from 75 to 74 percent in Chicago and from 81 to 78 percent in Detroit.

Changes in Educational Attainment

A major part of black-white wage convergence is attributed to a significant increase in educational attainment levels of blacks over the last century. Table 2 reports the proportion of black and white men in each of the five main education categories (less than high school, high school diploma or GED, some college but no bachelor's degree, bachelor's degree, above a bachelor's degree) in the United States. National data are good estimates for all 14 cities as educational attainment progress of blacks and whites in each city is consistent with the national trend. …

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