Labor Markets and/or Ascriptive Distinctions

1. Labor Markets and/or Ascriptive Distinctions Eve Veliz Kyle Longest 04.05.04

2. Structuring Structures-The Labor Market • Fiore uses Dual Labor Market theory to explain relationship between employment and poverty • Sorenson and Kalleberg use job matching theory to explain earnings differences • Both authors describe job differentiation as a cause for the perpetuation of poverty • Fiore- • Primary labor market: high wages, good working conditions, employment stability, job security, equity and due process, opportunity for advancement • Secondary labor market: less attractive, low wages, poor working conditions, harsh/arbitrary discipline, little advancement

3. It’s all about access • Sorenson/Kalleberg- Wage competition (productivity) vs. Vacancy competition (access) • Both demonstrate that statistical discrimination keeps certain populations out of the more desirable jobs. • Both papers state that alleviating market pressure is a more viable solution that individual-level tactics (job training pgms), however primary employees and secondary employers have incentive to make sure this doesn’t happen

4. Questions • What incentives would drive employers to change the structure of the market? • Is affirmative action addressing structural issues or individual?

5. Immigrant Enclave - Portes • Time frame: Latter half of 19th Century • Two main groups not following normal pattern of immigrant impoverishment. • German-Jews in New York & Japanese in California share 3 major characteristics 1. Economic success of first generation 2. Fierce struggle to maintain cultural roots and group solidarity 3. No major acculturation into mainstream society

6. Typology of Process of Incorporation • Prerequisites for development of Ethnic Enclaves (2 easy, 1 not so much) • 1. Available labor • Normally comes from family members or from more recent immigrants • 2. Financial resources • Usually not as big of a problem because the amount required at startup is relatively small and can come from personal savings or pooled accounts. • 3. Entrepreneurial Class • This is a group of business knowledgeable people who are capable of utilizing available resources to overcome structural barriers • Is there anything that could be structurally altered to improve its chances of happening? Would this situation even be desirable? Why or Why not?

7. Other Characteristics of Ethnic Enclaves Success • Businesses begin small and focus on providing for its own ethnic community • Also results in heavy obligation of reciprocity in order to help future ventures • Paternal-like relations of employers to employees • Wages are set below what is normally paid • Lack of money is compensated by increased support in helping workers improve their own position in the labor market, which helps future employment. (Key factor not present in secondary markets.) • Distinct and concentrated space • Leads to the ability of new member’s ability to live their entire lives within the confines of the enclave • What implications does this final characteristic have for an overall theory of stratification? (Meaning if these enclaves can be/are self-inclusive, how do they fit into the broader society, particularly in relation to other minorities?

8. Questions • To what extent and how does the success of these enclaves directly and through mainstream white culture affect other minorities? • How would this theory account for unsuccessful groups that seemed to follow a similar pattern, such as Italians, Poles, and Irish?

9. European vs. Black Migration - Lieberson • Time Frame: 1880 on • Voluntary Migration – results in interethnic contact • Usually motivated by the economic appeals of destination (i.e moving from worse to better) • Initial contact is therefore conditioned by original living situation, meaning someone coming from an extremely impoverished area will require much less to deem the new area a significant improvement • Since Blacks living conditions in the South were worse than SCE Europeans, they were more likely to accept lower paying jobs when they migrated to the North • This might explain initial discrimination cannot account for continued disparities.

11. Latent Structure of Race Relations* • The increasing numbers of black in areas of the North did not result in a radical change in racial attitudes of whites • Rather the changes in “compositions affect the dispositions that existed all along.” (584) • While it is generally held that the North was far more empathetic, there are signs that whites were equally prejudiced. • The increasing numbers of blacks brought these feelings to the fore, and, more importantly, gave whites more impetus to act on them. • *Alternative Definition “White people are racist”

12. It’s a Matter of Numbers • Black migrants experiences have been different than SCE Europeans because of the continued migration of blacks • SCE Europeans hold a higher position in the job queue than blacks. Even if blacks increase their median percentile of jobs held, the proportionate gap with SCE Europeans will remain. (Table 2, 587) • The increased migration of blacks made it more difficult to develop a unique market niche. • The niches that do develop cannot support the same proportion of the migrant population. • Less qualified new migrants undercut the strides made by older members, including the deterioration of schools and residential areas, which in turn reinforced negative stereotypes • SCE European were then seen as the lesser of two evils

13. Structure vs. Assimilation • How well does Lieberson disentangle pure racial discrimination from more structural causes? What are his shortcomings in this area? • How is it possible to get out of the chicken or the egg syndrome in the sense that much of his argument rests on the idea that SCE Europeans were above black in the job queue, but he does little to explain how this came to be? • (599) “The presence of blacks made it harder to discriminate against the new Europeans because the alternative was viewed even less favorably.” If the success of Europeans, and failure of blacks, is purely due to demographic changes, then why is it inevitable that blacks would be viewed less favorably? • Asian immigration has not stopped to the degree that European immigration has. Have these ethnic groups suffered the same fate Lieberson would predict, as he did for blacks?

14. Bonacich-Discord at the Bottom • Two forms of “ethnic antagonism” • Exclusion movements (Australia).Prevent ethnic group from being part of society • Caste system (S. Africa). Ethnics are essential to economy (as is their oppression) so they are given limited access • Both forms present in the US • Exclusion: Asian immigrants • Caste: blacks in the South

15. It’s Purely Economic • Economic competition main reason for ethnic antagonism. Challenges the notion that white people are inherently racist (opposed to Lieberson). • Steps towards ethnic antagonism • Labor market splits along ethnic lines. Two groups of workers who command different prices for their labor • Factors that go into price of labor: • 1) Resources: (what wage can they accept), • 2) Information (immigrants sign contracts out of ignorance), • 3) political resources (amount of resources inversely proportional to price of that group’s labor)

16. Doesn’t Have to Be About Race • Ethnic differences do not always cause price difference if they have the same goals • Split labor market doesn’t always come from ethnic differences (prison labor, women) • Ethnic price differentials is a function of 2 things. 1) negotiations often take place in the home country 2) people in same country (blacks) have different resources • Motives: Many immigrants tolerate bad conditions and avoid labor disputes. Have a fixed income goal and some are sojourners. Accept bad conditions to get a “foothold”

17. Perpetuated By Business • In split labor markets conflict develops between three classes: 1) business 2) higher paid labor 3)cheaper labor • Business: Wants cheap, docile labor. • Higher Paid: threatened by cheap labor. If classes split ethnically this class differential turns to ethnic antagonism (this is where much of the conflict occurs) Tactics used include: • 1) Exclusion (preferred) -try to prevent the presence of cheap labor (lobbying against importing immigrant labor) • 2) Caste-Exclusiveness when can’t exclude them. Monopolize acquisition of skills (SAT scores). Try to weaken them politically • Cheaper labor: used by business to undermine higher paid

18. Are Economic Theories Applicable Today? • Race relations is a function of economics plus polity • Pre-industrial & Industrial stages- role of government was to “legitimate, reinforce, and regulate” patterns of racial stratification • Modern times- more class subordination for lower class blacks. Racism not as overt

19. American Apartheid – Massey and Denton • Time frame: 1900’s, (especially post WWII) • Main Argument: Higher rates of poverty in a segregated group leads to a more intense concentration of poverty. • This concentration this intensifies the negative outcomes for the segregated group, which then lead to maladaptive behaviors. • This then creates a downward spiral of decline. • The segregation of blacks into inner city ghettos did not just happen, it was constructed by whites through a series of intentional individual, group, and legal decisions. • The theorem still rests on the postulate that the black rate of poverty is higher than for whites. So how can we explain this initial phenomenon? Does this weaken their overall argument?

20. Individual and Group Factors in Creating Black Ghettos • Personal Avoidance • White avoidance of blacks (i.e. suburbanization) coupled with blacks avoidance of whites • White violence against Blacks • Race riots and individual acts of violence (1900-1930) • Neighborhood Associations • Resisted selling or renting homes to blacks • Restrict Covenants on Deeds • Contract between seller and buyer that must be enforced by courts (outlawed in 1948) • Real Estate Agents Operate Dual Housing Markets • Show homes to blacks in black neighborhoods, whites in white neighborhoods • M&D at times make a strong racial argument (meaning that whites did this completely because they were racist). Is it empirically correct to give this amount of agency and motives to whites?

21. State and Federal Factors • Urban Renewal • Destroys housing in black areas, convert to businesses and high income housing • Started in Chicago, became National policy • Low Income Housing • Build in areas inhabited by poor blacks • Federal Housing Authority (FHA) Loans • Instructed leading organizations to “maintain racial character of neighborhoods.” (Policy now abandoned) • Veterans Programs after WWII (GI Bill, VA Loans) • More whites than blacks were eligible because military was segregated and did enlist many blacks until 1950’s • Redlining by Banks and Insurance Companies • Refusing loans to those in specified areas of the city that are “high risk loans.” • Established as federal guideline in 1933 (Now illegal)

22. Deterioration of Black Neighborhoods • Example: An increase in the poverty rate can start a downward spiral of Disinvestment. • Lower incomes lead to need for Lower Rents • Lower rents reduce profits for Landlords • Lower profits persuades Landlords to spend less on maintenance and upkeep of housing • Less spent on maintenance leads to property decay • Property decay leads to abandonment of buildings as Landlords decide to invest in other neighborhoods • Once the tipping point is reached (3-4% of buildings abandoned) the process accelerates and becomes cumulative

23. WJW 2 – Jobless Poverty • Time Frame: 1986-1993 • While inner cities have always experienced high rates of poverty, the increased rates of joblessness is a new trend. • Joblessness is a more accurate measure because it takes account of both those actively seeking jobs and those who have completely dropped out of the labor market.

24. Negative Effects of Joblessness on a Community • Work organizes both the individuals life as well as the communities. • Work gives people a set of expectations and goals • This can include both on a larger scale as well as a very concrete temporal, spatial sense. • Therefore, work gives the structure for coherence. • Being in a family with a working adult and a community of working adults give children the role models for their future work. • They learn the habits associated with steady work, which are necessary for holding consistent employment.

25. How did we get here? • Decreasing Demand for Low Skilled Labor • Resulted from changes in production, including the outsourcing of many labor intensive industries to foreign markets. • Suburbanization of Jobs • Social Deterioration of Ghettos • Lack of high income families makes it impossible to support neighborhood services, and results in lack of role models • Negative Employer Attitudes • Totally discounting anyone from a particular neighborhood • Skills developed in order to survive in harsh environment become negatives when trying to make it in mainstream role. • Some black residents of these neighborhoods lack both the “hard” and “soft” skills required to compete in today’s job market, which can the result in “statistical discrimination” of blacks in general.

26. Is the American Dream Obsolete? • The Assimilation Question- SES assimilation seen as marker for structural assimilation • Little change in ethnic earnings assimilation from 1970-1990 • Even with equal education Black, Native American, and Latino men still experience SEI disadvantage

27. Questions for Modern Split Market Theory • Is it still discrimination if black applicants are taken out of the process because of lack of “hard” skills? “Soft” skills? • Why does this process systematically hinder inner city black’s progress more than other inner city groups? • To what extent does this complicate the findings of the Bell Curve, which even in taking account of SES did not/could not control for some of these both macro and micro processes? • How can we use the policy suggestions made by WJW in connection with what we know from M&D to make more effective public policy changes?

28. Issues of Gender • Competing Hypothesis • Devaluation – Female work is less important and therefore culturally less valuable • Specialized Human Capital – Men work in jobs that require more specialized skills, on average, than women, making their wages higher • Kilbourne finds support for devaluation in that occupations pay less the more females make up that occupation, and when the occupations require more “nurturing” skills

29. Tam’s Issues with Kilbourne • 2 Main Problems with Devaluation Theory • In measuring gender bias one must look at all the left over effects. However, these numbers will be overestimated because of the potential of “omitted-variable bias.” • New evidence supporting specialized human capital evidence

30. What Up with this New Data • Tam finds that using occupational sex composition (i.e. the percentage female of an occupation) is simply another measure of specialized skills. • In her analysis, a measure of “ occupation specific-training time” is the most influential variable, and its addition reduces the impact of occupation sex composition. • However, jobs also offer “positional capital,” which is the ability of a job to increase one’s marketability for future jobs by increasing one’s skills. • So if jobs with high positional capital are differentially allocated it causes significant issues for women’s versus men’s ability to improve their career opportunities.