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1. Employment Mobility and the Belated Emergence of the Black Middle Class

Author:
Joshua Weitz, William Lazonick, and Philip Moss
Publication Date:
01-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
As the Covid-19 pandemic takes its disproportionate toll on African Americans, the historical perspective in this working paper provides insight into the socioeconomic conditions under which President-elect Joe Biden’s campaign promise to “build back better” might actually begin to deliver the equal employment opportunity that was promised by Title VII of the Civil Rights Act of 1964. Far from becoming the Great Society that President Lyndon Johnson promised, the United States has devolved into a greedy society in which economic inequality has run rampant, leaving most African Americans behind. In this installment of our “Fifty Years After” project, we sketch a long-term historical perspective on the Black employment experience from the last decades of the nineteenth century into the 1970s. We follow the transition from the cotton economy of the post-slavery South to the migration that accelerated during World War I as large numbers of Blacks sought employment in mass-production industries in Northern cities such as Detroit, Pittsburgh, and Chicago. For the interwar decades, we focus in particular on the Black employment experience in the Detroit automobile industry. During World War II, especially under pressure from President Roosevelt’s Fair Employment Practices Committee, Blacks experienced tangible upward employment mobility, only to see much of it disappear with demobilization. In the 1960s and into the 1970s, however, supported by the Civil Rights Act and the Equal Employment Opportunity Commission, Blacks made significant advances in employment opportunity, especially by moving up the blue-collar occupational hierarchy into semiskilled and skilled unionized jobs. These employment gains for Blacks occurred within a specific historical context that included a) strong demand for blue-collar and clerical labor in the U.S. mass-production industries, which still dominated in global competition; b) the unquestioned employment norm within major U.S. business corporations of a career with one company, supported at the blue-collar level by massproduction unions that had become accepted institutions in the U.S. business system; c) the upward intergenerational mobility of white households from blue-collar employment requiring no more than a high-school education to white-collar employment requiring a higher education, creating space for Blacks to fill the blue-collar void; and d) a relative absence of an influx of immigrants as labor-market competition to Black employment. As we will document in the remaining papers in this series, from the 1980s these conditions changed dramatically, resulting in erosion of the blue-collar gains that Blacks had achieved in the 1960s and 1970s as the Great Society promise of equal employment opportunity for all Americans disappeared.
Topic:
Government, History, Employment, Inequality, Mobility, Unions, Middle Class, New Deal, African Americans, and Great Migration
Political Geography:
North America and United States of America

2. How the Disappearance of Unionized Jobs Obliterated an Emergent Black Middle Class

Author:
William Lazonick, Philip Moss, and Joshua Weitz
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
During the 1960s and 1970s, blacks with no more than high-school educations gained significant access to well-paid unionized employment opportunities, epitomized by semi-skilled operative jobs in the automobile industry, to which they previously had limited access. Anti-discrimination laws under Title VII of the 1964 Civil Rights Act with oversight by the Equal Employment Opportunity Commission supported this upward mobility for blacks in the context of a growing demand for blue-collar labor. From the late 1970s, however, the impact of global competition and the offshoring of manufacturing combined with the financialization of the corporation to decimate these stable and well-paid blue-collar jobs. Under the seniority provisions of the now beleaguered industrial unions, blacks tended to be last hired and first fired. As U.S.-based blue-collar jobs were permanently lost, U.S. business corporations and government agencies failed to make sufficient investments in the education and skills of the U.S. labor force to usher in a new era of upward socioeconomic mobility. This organizational failure left blacks most vulnerable to downward mobility. Instead of retaining corporate profits and reinvesting in the productive capabilities of employees, major business corporations became increasingly focused on downsizing their labor forces and distributing profits to shareholders in the form of cash dividends and stock buybacks. Legitimizing massive distributions to shareholders was the flawed and pernicious ideology that a company should be run to “maximize shareholder value.” As the U.S. economy transitioned from the Old Economy business model, characterized by a career with one company, to the New Economy business model, characterized by interfirm labor mobility, advanced education and social networks became increasingly important for building careers in well-paid white-collar occupations. Along with non-white Hispanics, blacks found themselves at a distinct disadvantage relative to whites and Asians in accessing these New Economy middle-class employment opportunities. Eventually, the downward socioeconomic mobility experienced by blacks would also extend to devastating loss of well-paid and stable employment for whites who lacked the higher education now needed to enter the American middle class. By the twenty-first century, general downward mobility had become a defining characteristic of American society, irrespective of race, ethnicity, or gender. Since the 1980s, the enemy of equal employment opportunity through upward socioeconomic mobility has been the pervasive and entrenched corporate-governance ideology and practice of maximizing shareholder value (MSV). For most Americans, of whatever race, ethnicity, and gender, MSV is the not-so-invisible hand that has a chokehold on the emergence of the stable and well-paid employment opportunities that are essential for sustainable prosperity.
Topic:
Labor Issues, Civil Rights, Unions, Black Politics, African American Studies, and Workforce
Political Geography:
United States