BLACK IN THE SOUTH: POLICY IMPLICATIONS OF RACIAL DISPARITY FOR THE WORKING POOR.

• Author: Grover, Leslie T.

Introduction I. Black Workers and Inequality II. Methodology III. Findings IV. Policy Implications A. Education B. Health C. Mass Incarceration D. Low-Paying Jobs Conclusion INTRODUCTION

According to the Bureau of Labor Statistics, the working poor population consists of individuals who spend 27 weeks or more in a year either working or looking for work but whose incomes fall below the poverty level. (3) Working poor families are overwhelmingly headed by racial minorities. (4) In 2012, Blacks and Hispanics were more than twice as likely as Whites to be among the working poor nationwide, and the working-poor rate among Blacks and Hispanics was 13.6 and 13.8 percent, respectively. (5) For 2013, the Population Reference Bureau reports that while minority families represented 40 percent of all working families in the United States, minority families nevertheless make up 58 percent of all low-income working families. (6)

The intersection of race and working poor issues is particularly relevant for the southern United States, where the largest populations of both Blacks and working poor reside. In other words, to be both black in the south and working means you are more likely to be a member of the working poor than any other person of any race in any other region. This is not coincidental.

Prior to World War 2 ("WWII"), two systems controlled how black workers were demanded and supplied in terms of labor: slavery and sharecropping. Under these agricultural economic systems, black workers were systematically exploited for labor as well as cut off from receiving the direct benefits of their labor inputs. (7) Because of these systems, black workers, particularly those in the southern U.S., experienced social stratification. Stratification occurs when there is an unequal distribution of people across social categories characterized by scarce resources, such as wealth, income, prestige, social standing, education, housing, or other forms of material well-being. (8)

For example, it was completely acceptable to pay black workers less than white workers for the same work, to deny public services to Blacks, to prevent Blacks from becoming members of socially prestigious and beneficial organizations, to deny them credit and capital, and to deny them housing. (9) These social behaviors were accepted by the public as part of everyday life and the black worker experience. (10)

In 1940, almost one out of every five black men was unemployed, and a majority of black families lived in poverty. (11) However, with the onset of WWII, the economy shifted to a manufacturing economy where goods and services were mass produced. (12) The huge defense buildup that began with the fall of France in June of 1940 ended the Great Depression and brought back prosperity to the U.S. (13) "But Blacks were denied an equal share." (14) Using the slogan "We loyal Negro-American citizens demand the right to work and fight for our country," Blacks threatened to march on Washington to demand these rights. (15) This contributed to President Roosevelt's decision to issue Executive Order 8802, which opened government jobs and defense contract work to African Americans on the basis of equal pay for equal work. (16) It was the first presidential action taken against discrimination since Reconstruction and one of the first policies not expressly written to exclude Blacks from participation in post-war programs. (17)

There were other developments regarding black workers as well at the social level:

* The Civil Rights Act of 1964: prohibited discrimination in employment, outlawed discrimination in services and mandated access to public schools be given to Blacks more quickly. (18)

* Voting Rights Act of 1965: extended political rights to Blacks and gave the federal government powers to intervene at the state level when these rights were denied or blocked. (19)

* Fair Housing Act of 1968: prohibited discrimination in the rental or purchasing of housing. (20)

* Executive Order 11246: mandated hiring target numbers and racially inclusive recruitment and hiring to the federal government and to private contractors. (21)

* Equal Credit Opportunity Act of 1974: outlawed discrimination in home lending. (22)

* Home Mortgage Disclosure Act of 1975: required reporting of data regarding where loans had been granted and denied geographically. (23)

* Community Reinvestment Act of 1977: banned color coding of neighborhoods for creditworthiness based on race. (24)

There was also a major change in the economy to accompany this huge shift of social policy. The late 1960s and early 1970s brought about changes in technology such as telecommunications and computing. There was also a global energy crisis. (25) These developments quickly transformed the previous manufacturing economy to a post-industrial manufacturing economy. (26) In this new economy, wealth was not created by agriculture or manufacturing but rather through innovation tied to using knowledge to create goods and services for a global market. (27)

With the 1980s and 1990s, we saw even more technological advances and an increased pace in the exchanges of goods and services. (28) This shift was dubbed the New Economy, which was a system where goods, services, and the exchange of information took place at lightning fast speed. (29) With this shift, the wealth garnered under the agricultural, manufacturing, and knowledge-based economies was dwarfed by the creation of billionaires and competition crowding out markets quickly. Under these regimes, black workers did experience some gains, but not nearly as much as their white counterparts. (30)

In the early 21st century, another economic movement began based on the intersection of the previous manufacturing, technology, and social policy changes in the creative class, and the subsequent creative economy. (31) Richard Florida's book, The Rise of the Creative Class, ushered in a popular way of growing economies, particularly urban ones, by focusing on attracting creative minds. (32) According to Florida:

The distinguishing characteristic of the creative class is that its members engage in work whose function is to 'create meaningful new forms.' The super- creative core of this new class includes scientists and engineers, university professors, poets and novelists, artists, entertainers, actors, designers, and architects, as well as the "thought leadership" of modern society: nonfiction writers, editors, cultural figures, think-tank researchers, analysts, and other opinion-makers... Beyond this core group, the creative class also includes "creative professionals" who work in a wide range of knowledge-intensive industries such as high-tech sectors, financial services, the legal and healthcare professions, and business management. These people engage in creative problem-solving, drawing on complex bodies of knowledge to solve specific problems. Doing so typically requires a high degree of formal education and thus a high level of human capital. (33) In his follow-up work The Rise of the Creative Class Revisited, Florida remarked on the vast inequalities of other economies and noted the key is not to limit or reverse the gains that the Creative Class has made, but to extend them across the board, to build a more open, more diverse, and more inclusive Creative Society that can more fully harness its members' capacities. (34)

In this study, we examine black workers in the southern U.S. and the disparities in the current economy to examine what gains, if any, have been realized through the effects of the improved social standing brought about by the Civil Rights Movement's social policies and its resulting greater market participation for Blacks. The southern U.S. continues to have the largest black population in the nation, and understanding how this population has fared in the current creative economy has implications for both economic markets and social policy.

BLACK WORKERS AND INEQUALITY

Economic activity itself does not necessarily produce market inequalities. Rather, inequality is built into the social organization of a market through laws, regulations, social norms, formal institutions, and information institutions. (35) Two underlying factors encourage inequality and must be present in an economic market in order for inequality to occur: exploitation and opportunistic hoarding. (36) Exploitation occurs when members of one social group take a resource, such as labor or human capital, produced by members of another social group and prevent that other group from realizing the economic gains of its own resources. (37) Opportunistic hoarding occurs when one group restricts access to resources or benefits through social exclusion. (38) Additionally, two other factors drive inequality by reinforcing both exploitation and economic hoarding: emulation and adaption. (39) Emulation takes place when one group copies the social behaviors and distinctive characteristics of another group in order to be accepted into that group's social structure, and adaptation takes place when society accepts the categories of social and racial groups in their respective disparate social positions of power, economics, and interactions. (40)

For black workers, the most notable examples of these inequality factors were slavery, Jim Crow, and the sharecropping system. Under slavery, Blacks were used as human capital to increase economic output, but they did not experience the benefits of wealth, social prestige or increased disposable income. Under Jim Crow, Blacks were socially segregated from their white counterparts as well as largely excluded from education, politics, and social standing. (41) With Jim Crow also came sharecropping, which used the tenant-farmer relationship to produce goods and services. (42) White landowners provided black farmers with land, housing, and household goods in return for a share of the crops the black farmers produced. (43) Unlike slavery, where black workers...