Black Job Loss Déjà Vu

Think the typical job-loser in today’s economy is a
white computer programmer whose job has been outsourced
to India? Think again.

Dollars & Sense: The Magazine of Economic Justice Issue

http://www.dollarsandsense.org/0504leondar.html

BY BETSY LEONDAR-WRIGHT

In July 2003, Mary Clark saw a notice posted by the
time clock at the Pillowtex plant where she worked: the
plant was closing down at the end of the month. The
company would be laying off 4,000 workers. "They acted
like we was nobody," she said; Pillowtex even canceled
the workers’ accrued vacation days. Clark had worked at
the textile plant in Eden, North Carolina, for 11
years, inspecting, tagging, and bagging comforters. By
2003, she was earning more than $10 an hour.

Clark’s unemployment benefits don’t cover her bills.
Because Pillowtex had sent her and her coworkers home
frequently for lack of work in the final year, her
unemployment checks are low, based on that last year’s
reduced earnings. She lost her health coverage, and now
she needs dental work that she cannot afford.

It’s happening again.

In the 1970s, a wave of plant closings hit African
Americans hard. Two generations after the "Great
Migration," when millions of black people had left the
South to take factory jobs in Northern and Midwestern
cities, the U.S. economy began to deindustrialize and
many of those jobs disappeared—in some cases shifted to
the low-wage, nonunion South.

The recession of 2001—and the historically inadequate
"recovery" since—has again brought about a catastrophic
loss of jobs, especially in manufacturing, and once
again African Americans have lost out
disproportionately. Jobs that moved to the South during
the earlier era of deindustrialization are now leaving
the country entirely or simply disappearing in the wake
of technological change and rising productivity.

Media coverage of today’s unemployment crisis often
showcases white men who have lost high-paying
industrial or information-technology jobs. But Mary
Clark is actually a more typical victim. Recent job
losses have hit black workers harder than white
workers: black unemployment rose twice as fast as white
unemployment in the last recession. Once again, African
Americans are getting harder hit, and once again, they
face a downturn with fewer of the resources and assets
that tide families over during hard times.

LAST HIRED, FIRST FIRED

The tight labor market of the late 1990s was very
beneficial for African Americans. The black
unemployment rate fell from 18% in the 1981-82
recession, to around 13% in the early 1990s, to below
7% in 1999 and 2000, the lowest black unemployment rate
on record. But the 2001 recession (and the job-loss
recovery since then) has robbed African Americans of
much of those gains.

"The last recession has had a severe and
disproportionate impact on African Americans and
minority communities," according to Marc H. Morial,
president of the National Urban League. In its January
2004 report on black unemployment, the Urban League
found that the double-digit unemployment rates in the
14 months from late 2002 through 2003 were the worst
labor market for African Americans in 20 years.

The 2001 recession was hard on African American workers
both in relation to earlier recessions and in relation
to white workers. Unemployment for adult black workers
rose by 2.9 percentage points in the recession of the
early 1980s, but by 3.5 in the 2001 recession. White
unemployment, in contrast, rose by only 1.4 percentage
points in the early-1980s recession and by 1.7 in the
recent downturn. The median income of black families
fell 3% from 2001 to 2003, while white families lost
just 1.7%. Today, black unemployment has remained above
10% for over three years.

Official unemployment figures, of course, greatly
understate the actual number of adults without jobs.
The definition doesn’t include discouraged people who
have stopped looking for work, underemployed part-
timers, students, or those in prison or other
institutions. In New York City, scarcely half of
African-American men between 16 and 65 had jobs in
2003, according to the Bureau of Labor Statistics’
employment-to-population ratios for the city. The BLS
ratios, which include discouraged workers and others
the official unemployment statistics leave out, were
51.8% for black men, 57.1% for black women, 75.7% for
white men, and 65.7% for Latino men. The figure for
black men was the lowest on record (since 1979).

Manufacturing job losses in particular have hit black
workers harder than white workers. In 2000, there were
2 million African Americans working in factory jobs.
Blacks comprised 10.1% of all manufacturing workers,
about the same as the black share of the overall
workforce. Then 300,000 of those jobs, or 15%,
disappeared. White workers lost 1.7 million factory
jobs, but that was just 10% of the number they held
before the recession. By the end of 2003, the share of
all factory jobs held by African Americans had fallen
to 9.6%. "Half a percentage point may not sound like
much, but to lose that much in such an important sector
over a relatively short period, that is going to be
hard to recover," said Jared Bernstein of the Economic
Policy Institute, a progressive economics think tank.
Latino workers increased their share of manufacturing
jobs in 2002 and 2003 slightly, though their
unemployment rate overall rose.

Some of the largest layoffs have occurred in areas with
large African-American populations—just this April, for
example, 1,000 jobs were cut at a Ford plant in St.
Louis and 300 at a Boeing plant in San Antonio. Textile
plants with mostly black employees have closed in
Roanoke Rapids, N.C., Columbus, Ga., and Martinsville,
Va. The states with the greatest number of layoffs of
50 workers or more are black strongholds New York and
Georgia.

When Autoliv closed its seat belt plant in Indianapolis
in 2003, more than 75% of the laid-off workers were
African Americans. Many of these workers are young
adults who got their jobs during the labor shortage of
the late 1990s even without a high school diploma; now
they have few options. "They were taken from the street
into decent-paying jobs; they were making $12 to $13 an
hour. These young men started families, dug in, took
apartments, purchased vehicles. It was an up-from-the-
street experience for them, and now they are being
returned to their old environment," said Michael
Barnes, director of an Indiana AFL-CIO training program
for laid-off workers.

U.S. Chamber of Commerce executive vice president Bruce
Josten isn’t too worried about layoffs: "We’re talking
about transformational evolution—successful companies
remaking their own operations so they’re able to better
focus on what their core mission is. It’s not a deal
where everyone gains instantly. At a micro level,
there’s always going to be a community that’s hurt."
The communities that are hurt come in all colors, but
several factors make the micro level pain more severe
in communities of color.

HARD TIMES HIT BLACKS HARDER

Prolonged unemployment is scary for most families, but
it puts the typical African-American family in deeper
peril, and faster. The median white family has more
than $120,000 in net worth (assets minus debts). The
median black family has less than $20,000, a far
smaller cushion in tough times.

Laid-off workers often turn to family members for help,
but with almost a quarter of black families under the
poverty line, and one in nine black workers unemployed,
it’s less likely that unemployed African Americans have
family members with anything to spare. Black per capita
income was only 57 cents for every white dollar in
2001.

When homeowners face prolonged unemployment, they can
take out a home equity loan or second mortgage to tide
them over. But while three-quarters of white families
are homeowners, less than half of black families own
their own homes.

And thanks to continuing segregation and discrimination
in housing, it’s more difficult for black families to
relocate to find work. New jobs are concentrated in
mostly white suburbs with little public transportation.

HISTORY REPEATS ITSELF

The term "deindustrialization" came into everyday use
in the 1970s, when a wave of plant closings changed the
employment landscape. From 1966 to 1973, corporations
moved over a million American jobs to other countries.
Even more jobs moved from the Northeast and Midwest to
the South, where unions were scarce and wages lower.
New York City alone lost 600,000 manufacturing jobs in
the 1960s.

As today, the workers laid off in the 1960s and 70s
were disproportionately African-American. The U.S.
Commission on Civil Rights found that during the
recession of 1973 to 1974, 60% to 70% of laid-off
workers were African-American in areas where they were
only 10% to 12% of the workforce. In five cities in the
Great Lakes region, the majority of black men employed
in manufacturing lost their jobs between 1979 and 1984.
A major reason was seniority: white workers had been in
their jobs longer, and so were more likely to keep them
during cutbacks.

Another reason was geography. The Northern cities that
lost the most jobs were some of those with the largest
populations of people of color, and those inner-city
areas sank deep into poverty and chronically high
unemployment as few heavily white areas did.

The race and class politics of deindustrialization are
also part of the story. The pro-business loyalties of
the federal government dictated policies that
encouraged plant closings and did very little to
mitigate their effects. Tax credits for foreign
investment and for foreign tax payments encouraged
companies to move plants overseas. While Northern
cities were suffering from deindustrialization, the
federal government spent more in the Southern states
than in the affected areas: Northeast and Midwest
states averaged 81 cents in federal spending for each
tax dollar they sent to Washington in the 1970s, while
Southern states averaged $1.25. Laid-off black factory
workers had no clout, so politicians faced little
pressure to address their needs.

As dramatic as the movement of jobs from the North to
the South and overseas was the shift from city to
suburb. The majority of new manufacturing jobs in the
1970s were located in suburban areas, while
manufacturing employment fell almost 10% in center
cities. In the Los Angeles area, for example, older
plants were closing in the city while new ones opened
in the San Fernando Valley and Orange County.

The new suburban jobs were usually inaccessible for
African Americans and other people of color because of
housing costs, job and housing discrimination, lack of
public transportation, and lack of informal social
networks with suburban employers. In a study of
Illinois firms that moved to the suburbs from the
central cities between 1975 and 1978, black employment
in the affected areas fell 24%, while white employment
fell less than 10%. In another study, some employers
admitted to locating facilities in part so as to avoid
black workers. One study of the causes of black
unemployment in 45 urban areas found that 25% to 50%
resulted from jobs shifting to the suburbs. Even the
federal government shifted jobs to the suburbs:
although the number of federal civilian jobs grew by
26,558 from 1966 to 1973, federal jobs in central
cities fell by 41,419. Over time, suburban white people
gained a greater and greater geographic edge in job
hunting.

LOOKING FORWARD

Mary Clark has been looking for work for nine months
now without success. Stores get applications from
hundreds of other laid-off workers; there aren’t enough
jobs for even a fraction of the unemployed. "It used to
be that if one plant shut down, there’d be another one
hiring. Now they’re all laying off or closing," she
says.

For years Clark had helped her grown daughter support
her two small children. "Now the roles are reversed,
and they help me." She has turned to charities to make
ends meet, but some give aid only once a year, and
others won’t help a single woman without children at
home. "It breaks your self-esteem to have to ask for
help," Clark says.

Some of her former coworkers are in more desperate
straits than she is. Some have lost their homes or gone
into bankruptcy. Some people have found jobs far from
home and commute for hours a day. Clark sees crime,
divorce, and family violence all rising in the area.

What job growth there’s been has been concentrated in
the low-wage service sector, which pays less than the
shrinking manufacturing sector. There’s no law of
nature that says service jobs are inevitably low paid
and without benefits. Or that manufacturing can’t
revive in the United States. The recent wave of union
organizing victories in heavily black industries such
as health care represent one source of hope for
creating more decent jobs for African Americans.

Dr. Martin Luther King Jr. said in 1968, "When there is
massive unemployment in the black community, it is
called a social problem. But when there is massive
unemployment in the white community, it is called a
depression." The New Deal response to the Great
Depression included public works jobs and a
strengthened safety net, most of which excluded people
of color. Mary Clark clearly recognizes what happens
when there is no New Deal for unemployed African
Americans: "North Carolina has people who want to work,
but we don’t have anyone pushing work our way. We need
the mills back. We’re people used to working, and when
you take the work away, what do you have left?"

Betsy Leondar-Wright is the Communications Director at
United for a Fair Economy and co-author of UFE’s 2004
report, "The State of the Dream: Enduring Disparities
in Black and White."

SOURCES Lori Aratani, "With jobs heading overseas,
trade issues resonating with many," Knight Ridder News
Service, 1/25/04; Louis Uchitelle, "Blacks Lose Better
Jobs Faster As Middle-Class Work Drops," New York
Times, 7/12/03; Dedrick Muhammad, Attieno Davis, Meizhu
Lui, and Betsy Leondar-Wright, The State of the Dream:
Enduring Disparities in Black and White (United for a
Fair Economy, Jan. 2004); National Urban League, The
National Urban League’s Jobs Report, Jan. 2004; Janny
Scott, "Nearly Half of Black Men Found Jobless," New
York Times, 2/28/04; Arthur B. Kennickell, "A Rolling
Tide: Changes in the Distribution of Wealth in the
U.S., 1989-2001," (Levy Economics Institute, Nov.
2003); Economic Policy Institute, Snapshot, 2/11/04;
Gregory D. Squires, "Runaway Plants, Capital Mobility,
and Black Economic Rights," in Community and Capital in
Conflict: Plant Closings and Job Loss, John C. Raines
et al., eds. (Temple Univ. Press, 1982); Lawrence H.
Fuchs, The American Kaleidoscope: Race, Ethnicity, and
the Civic Culture (Wesleyan Univ. Press, 1990); George
Lipsitz, The Possessive Investment in Whiteness: How
White People Profit from Identity Politics (Temple
Univ. Press, 1998); Douglas S. Massey and Nancy A.
Denton, American Apartheid: Segregation and the Making
of the Underclass (Harvard Univ. Press, 1993); James H.
Johnson, Jr. and Melvin L. Oliver, "Economic
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