New Duke study helps confirm that conservative policies have damaged American racial equality and economic wellbeing
Here’s some news for the many conservative supporters of Donald Trump who yearn to “make America great again” – you know, like it supposedly was in the 1950’s: In a very important and troubling way, we’re already there.
Confirmation of this fact comes from a pair of Duke University researchers who recently released a powerful and damning new study. The study, “Divergent Paths: Structural Change, Economic Rank, and the Evolution of Black-White Earnings Differences, 1940-2014,” makes painfully clear what happens when we turn away from public policies that promote equality and real opportunity for everyone. Researchers Patrick Bayer and Kerwin Kofi Charles found that the wage gap between black and white Americans has been growing steadily in recent decades and is now, rather remarkably, all the way back at the level it was at the midpoint of the last century. This is from the news release that accompanied the study:
“After years of progress, the median earnings gap between black and white men has returned to what it was in 1950, according to new research by economists from Duke University and the University of Chicago.
The experience of African-American men is not uniform, though: The earnings gap between black men with a college education and those with less education is at an all-time high, the authors say.
The research appears online in the National Bureau of Economic Research working paper series.
The paper looks at earnings for working-age men across a span of 75 years, from 1940 to 2014. The earnings gap between black and white men narrowed during the civil rights era. Then, starting around 1970, the gap between black and white men’s wages started widening once again.
‘When it comes to the earnings gap between black and white men, we’ve gone all the way back to 1950,’ said Duke economist Patrick Bayer, who co-authored the paper with Kerwin Kofi Charles of the University of Chicago.”
The link between policy and wellbeing
What’s so noteworthy here, of course, is not just the tragic nature of the news but the almost direct correlation with American economic and social policy. When the nation was aggressively combating racial discrimination and advancing progressive ideas like universal higher education, a decent minimum wage, stronger union rights, a robust public safety net, lower incarceration rates and affirmative action – in short, the period that stretched from Franklin Roosevelt’s New Deal to Lyndon Johnson’s Great Society – the pattern on closing the wage gap was positive.
Since that time, however – a time that has featured the long, steady rise of the American conservative movement and the policies it has championed – i.e. trickledown economics, lower taxes, the “wars” on crime drugs, higher incarceration rates, cuts to the social safety net, lower unionization rates, and an end to free higher education, affirmative action and traditional pensions, etc. – the story has changed dramatically. Progress has not just halted; things have moved dramatically backward.
Combine all of this with our increasingly automated and outsourced economy in which decent paying jobs for those without a higher education have all but disappeared and an extremely difficult situation quickly emerges. Again, this is from the news release:
‘The broad economic changes we’ve seen since the 1970s have clearly helped people at the top of the ladder,’ Bayer said. ‘But the labor market for low-skilled workers has basically collapsed.’
‘Back in 1940 there were plenty of jobs for men with less than a high school degree. Now education is more and more a determinant of who’s working and who’s not.’
In fact, more and more working-age men in the United States aren’t working at all. The number of nonworking white men grew from about 8 percent in 1960 to 17 percent in 2014. The numbers look still worse among black men: In 1960, 19 percent of black men were not working; in 2014, that number had grown to 35 percent of black men. That includes men who are incarcerated as well those who can’t find jobs.
‘The rate at which men are not working has been skyrocketing, and it’s not simply the result of the Great Recession,’ Bayer said. ‘It’s a big part of what’s been happening to our economy over the past 40 years.’
The situation would be even worse if not for educational gains among African-Americans over the past 75 years, Bayer said.
On average, black men today have many more years of schooling than black men of the past, and the education gap between white and black men has shrunk considerably. Nevertheless, a gap remains: These days, black men have about a year’s less education than white men, on average.”
It’s worth noting that all of these troubling developments come at a time in which American worker productivity has risen significantly; it grew by a remarkable 64.9 percent between 1979 and 2013 according to the Economic Policy Institute.
We know what to do
Fortunately, there’s no particular mystery about what will and what won’t work when it comes to tackling the black-white wage gap (as well as the broader income gap between low wage workers and those at the top).
Simply put, that will require an aggressive regimen of intentional public solutions. First and foremost, this means a dramatic new commitment to affordable higher education. As the report release notes:
“The picture for black men looks very different at the top of the economic ladder versus the bottom, the authors say. Since the 1960s, top black salaries have continued to climb. Those advances were fueled by more equal access to universities and high-skilled professions, the study finds.”
Unfortunately, of course, college has become more and more unaffordable for millions of Americans as public investments have waned and student debt has skyrocketed. This simply must change.
And for those who won’t or can’t benefit directly from higher education, a list of several other obvious policy solutions present themselves. This list includes, among other things:
- a big hike in the minimum wage,
- a reversal of unfair tax policies that force low and moderate income people to pay a higher percentage of their incomes in taxes than people at the top,
- an end to punitive criminal penalties, the absurd “war on drugs” and the mass incarceration the two have combined to produce,
- universal health insurance,
- a public jobs program and a public safety net that guarantees all who are willing to work a path from poverty,
- stronger unionization rights,
- a revival of affirmative action policies,
- improved K-12 education and
- a broad new commitment to affordable housing.
What clearly won’t work is more of the same – that is, trickledown economic policies that slash public investments, enrich the top 1% and rely exclusively on the “invisible hand” of the “free market.” As we have seen time and again in recent decades, there is simply no evidence that such policies do anything to sustain a broadly middle class society.
None of this, of course, is to say that the market economy is not a powerful tool. As has been noted in this space on multiple occasions in the past, the market economy is one of the greatest inventions in human history for generating wealth, productivity and innovation. That said, like all human institutions, the market is neither holy nor infallible. It is an imperfect tool that humans use (and bend and adjust from time to time) to produce desired results – things like prosperity, opportunity, freedom, equality and progress. It needs strong public policies to work well for all.
Let’s hope the new Duke University study helps reinforce this important lesson and reminds public policymakers that “making America great again” involves combating inequality by making the market economy work for everyone and moving forward, not backward.