Losing Ground: American Social Policy 1950–1980

Book excerpt

By: Charles Murray

Date: 1985

Source: Murray, Charles.Losing Ground: American Social Policy 1950–1980. New York: Basic Books, 1985.

About the Author: Charles Murray is a resident scholar at the American Enterprise Institute. He holds a doctorate in Political Science from the Massachusetts Institute of Technology and a degree in History from Harvard University. Murray is a co-author ofThe Bell Curve(1994).

INTRODUCTION

On January 1, 1863, President Abraham Lincoln (1809–1865) issued the Emancipation Proclamation, legally freeing all slaves in the Confederate states. While this document marked a fundamental milestone in the fight for racial equality, it served merely as a small first step in what would prove to be a journey of more than a century. The Emancipation Proclamation, while technically freeing the slaves, remained dependent on the political will of the Union to enforce that freedom. Further, despite their status as free men, black Americans remained second-class citizens even in the eyes of the law, a status confirmed by court rulings allowing legally segregated schools.

This inequality would remain, to varying degrees, well into the twentieth century. Beginning with the Franklin Roosevelt (1882–1945) administration in 1933, a series of new laws and executive orders began to chip away at the discriminatory practices that remained pervasive throughout the United States. A progression of civil rights laws methodically outlawed hiring and promotion discrimination and prohibited housing discrimination. In 1954, intentionally segregated schools were declared illegal.

Concurrent with these legal changes, numerous federal programs were implemented in an attempt to help minorities catch up after decades of discrimination. Following his election in 1964, President Lyndon Johnson (1908–1973) announced plans for a massive program of social engineering. Modeled on President Roosevelt's New Deal, Johnson's plans continued the legacy of government efforts to improve the lives of the poorest Americans through federal assistance. Johnson's landslide election victory combined with solid Democratic control of Congress enabled the president to pass eighty of his eighty-three legislative proposals, a number unequaled by any other U.S. president. Johnson's legacy would be a larger and more comprehensive welfare state.

Johnson's programs attacked social problems on numerous fronts, in the hope that a comprehensive assault would finally bring an end to poverty and discrimination in America. Johnson increased funding for education, medical research, and conservation. He launched a massive battle against poverty and crime, funding urban renewal in numerous cities. He passed legislation protecting voting rights and signed the Medicare amendment to Social Security. Johnson's efforts combined federal funding on a previously unseen scale with the best theories about how to correct America's social ills.

Johnson's most ambitious program came to be known as the War on Poverty. Ambitiously intended to end poverty in America, this initiative was launched with the 1964 creation of the Office of Economic Opportunity (OEO). The OEO was charged with overseeing a variety of new federal programs intended to move poor Americans from dependence to self-sufficiency. Funded with $1 billion per year, the OEO oversaw the creation of numerous targeted programs including the VISTA volunteer network, Project Head Start, and Food Stamps as well as much broader efforts to completely reform urban life in the United States.

PRIMARY SOURCE

Black Unemployment Rates: A Peculiarly Localized Problem

Let us first examine unemployment as officially defined among those who were the primary beneficiaries of the jobs-program effort, black youth at the entry point to the labor market.…

The picture is a discouraging one. In the early 1950s, black youths had an unemployment rate almost identical to that of whites. In the last half of the 1950s, the rate of unemployment among young blacks increased. John Cogan has recently demonstrated that the increase may be largely blamed on the loss of agricultural jobs for black teenagers, especially in the South. As this dislocating transitional period came to an end, so did the increases in the unemployment rate for black youths. The rate stabilized during the early 1960s. It stabilized, however, at the unacceptably high rate of roughly a quarter of the black labor force in this age group. It appeared to observers during the Kennedy administration that a large segment of black youth was being frozen out of the job market, and this concern was at the heart of the congressional support for the early job programs.

Black unemployment among the older of the job entrants improved somewhat during the Vietnam War years, although the figures remained higher than one would have predicted from the Korean War experience. But in the late 1960s—at the very moment when the jobs programs began their massive expansion—the black youth unemployment rate began to rise again, steeply, and continued to do so throughout the 1970s.

If the 1950s were not good years for young blacks (and they were not), the 1970s were much worse. When the years from 1951 to 1980 are split into two parts, 1951-65 and 1966–80, and the mean unemployment rate is computed for each, one finds that black 20–24 year-olds experienced a 19 percent increase in unemployment. For 18–19-year-olds, the increase was 40 percent. For 16–17-year-olds, the increase was a remarkable 72 percent. If the war years are deleted, the increases in unemployment are higher still. Focusing on the age groups on which the federal jobs programs were focused not only fails to reveal improvement; it points to major losses. Something was happening to depress employment among young blacks.

The "something" becomes more mysterious when we consider that it was not having the same effect on older blacks. Even within the 16–24-year-old age groups, we may note that the relationship between age and deterioration seems to have been the opposite of the one expected. The older the age group, the less the deterioration. What happens if we consider all black age groups, including the ones that were largely ignored by the jobs and training programs…? The summary statement is that, for whatever reasons, older black males (35 years old and above) did well. Not only did they seem to be immune from the mysterious ailment that affected younger black males, they made significant gains.…

During the same fifteen-year period in which every black male age group at or above the age of 25 experienceddecreasedunemployment compared with the preceding fifteen years, every group under the age of 25 showed a majorincreasein unemployment. If it were not for the young, the overall black unemployment profile over 1950–80 would give cause for some satisfaction.

Black Youth versus White Youth: Losing Ground

If young whites had been doing as badly, we could ascribe the trends to macro phenomena that affected everybody, educated or not, rich or poor, discriminated-against or not. But young blacks lost ground to young whites.…

The position of black youths vis-À-vis white youths worsened for al three groups. For teenagers, the timing was especially odd. From 1961 to 1965, for example, when there were virtually no jobs programs, the black to white ratio for 18–19 year-olds averaged 1.8 to 1. From 1966 to 1969, with a much stronger economy,plusthe many new jobs programs, the ratio jumped to an average of 2.2 to 1. Without trying at this point to impose an explanation of why black youth unemployment rose so drastically from the late sixties onward, I note in passing that satisfactory explanations do not come easily. The job situation of young blacks deteriorated as the federal efforts to improve their position were most expensive and extensive—efforts not just in employmentper se, but in education, health, welfare, and civil rights as well. Nor does it help to appeal to competition with women, to automation, to the decay of the position of American heavy industry, or any other change in the job market. These explanations (which may well explain a worsening job situation for unskilled workers) still leave unexplained why blacks lost ground at the height of the boom, and why young blacks lost ground while older black workers (who were hardly in a better position to cope with a changing job market) didnotlose, and in fact gained, ground. The facile explanation—jobs for young blacks just disappeared, no matter how hard they searched—runs into trouble when it tries to explain the statistics on labor force participation.

The Anomalous Plunge in Black Labor Force Participation

"Labor force participation" is the poor cousin of unemployment in the news media. Each month, the latest unemployment figures are sure to have a spot on the network news broadcasts; if times are hard, the lead.Labor force participation is less glamorous. It has no immediate impact on our daily lives, and its rise and fall does not decide elections.

Yet the statistics on labor forces participation—"LFP" for convenience—are as informative in their own way as the statistics on unemployment. In the long run, they may be more important. The unemployment rate measures current economic conditions. Participation in the labor force measures a fundamental economic stance: an active intention of working, given the opportunity.

The Great Society reforms were not framed in terms of their effect on LFP, but in reality this was at the center of the planners' concerns. What was commonly called the "unemployment" problem among the disadvantaged was largely a problem of LFP. The hardcore unemployed were not people who were being rebuffed by job interviewers, but people who had given up hope or ambition of becoming part of the labor force. For them, the intended effect of the manpower programs was to be not merely a job, but stable, long-term membership in the labor force.

As in the case of unemployment, my analyses of LFP are based on males. The role of women in the labor market changed drastically during the three decades under consideration, especially during the 1972–80 period. Interpretations of the relationship between LFP and social welfare policy are confounded by this separate revolution. But society's norm for men remained essentially unchanged. In 1050, able-bodied adult men were expected to hold or seek a full-time job, and the same was true in 1980.

Unlike unemployment, LFP historically has been predictable, changing slowly and in accordance with identifiable rules. Therefore the Bureau of Labor Statistics had in the 1050s been able to project LFP into the future with considerable accuracy, and starting in 1057 such projections became part of the basic LFP statistics reported annually in the Statistical Abstract of the United States. In the 1967 volume, theAbstractfor the first time broke down these projections by race, showing anticipated labor force participation to 1980 based on the experience from 1947 to 1964. The trend during those years plus the coming, known demographic shifts in the labor force of the 1970s led to projections of a modest increase in LFP for both black and while males. What actually happened was quite different.

In 1954, 85 percent of black males 16 years and older were participating in the labor force, a rate essentially equal to that of white males; only four-tenths of a percentage point separated the two populations. Nor was this a new phenomenon. Black males had been participating in the labor force at rates as high as or higher than white males back to the turn of the twentieth century.

This equivalence—one of the very few social or economic measures on which black males equaled whites in the 1950s—continued throughout the decade and into the early 1960s. Among members of both groups, LFP began to decline slowly in the mid—1950s, but the difference in rates was extremely small—as late as 1965, barely more than a single percentage point.

Beginning in 1966, black male LFP started to fall substantially faster than white LFP. By 1972, a gap of 5.9 percentage points had opened up between black males and while males. By 1976, the year the slide finally halted, the gap was 7.7 percentage points. To put it another way: from 1954 to 1965, the black reduction on LFP was 17 percent larger than for whites. From 1965 to 1976, it was 217 percent larger.

In the metrics of labor force statistics, a divergence of this size is huge. The change that occurred was not a minor statistical departure from the trendline, but an unanticipated and unprecedented change. America had encountered large-scale entry into the labor market before, most recently by women, and had legislated withdrawal from the labor market—of children, in the early part of the century. But we had never witnessed large-scale voluntary withdrawal from (or failure to enlist in) the labor market by able-bodied males.

The decline was most rapid during the exceedingly tight labor market of the last half of the 1960s made the phenomenon especially striking. A contemporary (1967) analysis of LFP published in The American Economic Reviewused data from 1961 to 1965 to reach the confident conclusion that, if unemployment dropped (as in fact was happening), we could expect major reductions in urban poverty among blacks as tight labor market drew wives into the labor force. It was assumed that black male LFP would behave as it had in the past. It was a technically exact extrapolation from recent experience, but it was contradicted by events even as the author was waiting for his manuscript to be published.

Let us take a close look at who was causing the divergence in black and white male LFP.

As in the case of unemployment, age is at the center of the explanation: As before, the young account for most of the divergence with whites. We begin with the three youngest age groups, the "job entrants," aged 16–17, 18–19, and 20-24…

It is the unemployment story replayed. The younger the age group, the greater the decline in black LFP, the greater the divergence with whites, and t he sooner it began. The parallelism with the unemployment age trends is so complete that it is important to note that the two measures are not confounded. The unemployment rate is based only on those who are in the labor force. The people who were causing the drop in LFP were not affecting the calculation of unemployment.

On the face of things, it would appear that large numbers of young black males stopped engaging in the fundamental process of seeking and holding jobs—at least, visible jobs in the above-ground economy. There are at least two explanations, however, which would render the LFP statistic misleading: (1) that fewer young blacks participated in the labor force because they were going to school instead—a positive development; (2) that fewer young blacks participated in the labor force because the high unemployment rates made "discouraged workers" of them—why bother to look for a job if none are available? Both require examination.

"They Were Going to School Instead"

First, let us consider the merits of the education hypothesis. From 1965 to 1970, LFP among black males dropped by the following amounts (expressed as the percentage of the population in 1970 minus the percentage of the population in 1965).

Age Group … Reduction in LFP

16–17 … –4.5

18–19 … –4.9

20–24 … –6.3

At the same time, school enrollment increased by these amounts, using the same metric:

Age Group … Increase in School Enrollment

16–17 … +1.8

18–19 … +.5

20–24 … +5.2

Even if we make the extreme assumption thatallof the increased enrollment represented students who would have been in the labor force if they had not gone to school and thatnoneof the people who were added to the school population also participated in the labor force, the increases in school enrollment would not cover the decreases in LFP. In fact, of course, those assumptions are incorrect, further shrinking the proportion of the reduction in LFP that could be explained by school enrollment. More than a third of students in those age groups participate in the labor force, and many who are not students do not participate. The white experience indicates that school enrollment may be altogether irrelevant in explaining the change in black LFP. White male LFP in two of the three job-entry age groups increased along with school enrollment: Age Group LFP Changes in School Enrollment:

The "school enrollment" hypothesis explains at best a small fraction of the reduction in black LFP; judging from the white experience, we may not be justified in using it to explain any of the reduction.

"They Gave Up Looking For Jobs That Weren't There"

The "discouraged worker" hypothesis sis probably an explanation for part of the reduction in certain age groups in certain years. For rural populations, the disappearance of agricultural jobs meant picking up roots, establishing a new home and a new style of life, and accommodating to the demands of a strange job market. The adjustment was a difficult one, and the reductions in black teenage LFP in the last half of the 1950s can plausibly be read, at least in part, as a reflection of this. Economic bad times also produce discouragement. During recessions—1957-58, for example, or 1974-75—the reductions in LFP among the most vulnerable workers (young black males) are easily seen as discouragement.

But it is not possible to use discouragement as an explanation for the long-term trend. Why should young black males have become "discouraged workers" in greater numbers in the 1060s than they did during the less prosperous 1960s and 1970s? Even within the decade of the 1960s, the "discouraged worker" hypothesis fails. In 1960, young black males (ages 16–24) had an LFP rate of 74.0 percent, 2.7 percentage points higher than the LFP rate of white males of the same age group. By 1970, the gap was 3.6 percentage points in the other direction (whites higher than blacks).…

In the half of the decade when the economy was not only strong but operating at full capacity, the difference between young white and blacks grew fastest—more than two and a half times as fast as during the first half of the decade, with its considerably higher overall unemployment rate.

LFP among older age groups of black males during the same period is given in the appendix. In general, white and black LFP rates changed in tandem. Divergences were perceptible in each of the age groups: The participation rates of blacks and whites in the 1950s were uniformly closer than in 1980. In each case, the major portion of the divergence occurred during the 1970s. But among older workers the absolute changes were quite small.

SIGNIFICANCE

Like his predecessor Harry Truman, Lyndon Johnson found himself stepping in for a deceased, popular liberal president. And like Truman, Johnson soon found himself facing growing opposition to his efforts to expand federal participation in American life. As political resistance to Johnson's growing programs gained momentum, the war in Vietnam became increasingly costly and unpopular, robbing the president of both financial and political capital. Though well funded in its first three years, the War on Poverty simply attempted too much. Given the scope of poverty in America, any short-term attempt to spend it out of existence was probably unrealistic.

As the fiftieth anniversary of Johnson's War on Poverty approaches, poverty remains an ongoing problem in America. In the years since Johnson's initiatives, many of his approaches have been discredited; ill-conceived efforts to build massive high-rise low income housing developments, for example, proved ineffective in reducing poverty. Ironically, seemingly minor initiatives such as Project Head Start have demonstrated a greater net impact than some of the Great Society's headline efforts.

Among the problems that have actually worsened since the 1960s, persistent black unemployment is among the most vexing. Labor Force Participation (LFP), a measure of how many individuals are willing to work, has fallen substantially faster among blacks than among whites. From 1966, when the decline began and many of the Great Society programs were just hitting their stride, to 1976, the difference in white and black LFP broadened to 7.7 percentage points. This change occurred despite low unemployment rates throughout much of the period, which should have kept rates relatively low.

Economists and labor analysts offer little insight into the reason for this increasing black/white disparity. Despite disagreement about the causes, consensus does exist that blacks still face lower rates of employment than whites, and that current trends suggest the problem is worsening. Whether government policies will prove to be the root cause of the problem or its eventual solution remains the topic of a heated political debate.

In 2006, federal spending on entitlement programs including Medicare, Medicaid, and Social Security consumed 8.4 percent of the Gross Domestic Product (GDP); these expenditures were projected to more than double by the year 2050. Like defense and other types of federal spending, high spending in these large programs reduces available funding for other social projects.

FURTHER RESOURCES

Books

Dooley, David, and JoAnn Prause.The Social Costs of Under-employment: Inadequate Employment as Disguised Unemployment. Cambridge, U.K., and New York: Cambridge University Press, 2003.

Pissarides, Christopher A.Equilibrium Unemployment Theory. Cambridge, Mass.: MIT Press, 2000.

Vedder, Richard, and Lowell Gallaway.Out of Work: Unemployment and Government in Twentieth-Century America. Albany: New York University Press, 1997.

Periodicals

Jenkins, J. Craig, et al. "Political Opportunities and African-American Protest, 1948–1997."American Journal of Sociology109 (2003): 277–303.

Malveaux, Julianne. "Despite Education, Black Workers Still Face Challenges."Black Issues in Higher Education15(1998):28.

"The other America."The Economist337 (1995): 19–20.

Web sites

The Heritage Foundation: Policy Research and Analysis. "Federal Budget and Spending." <http://www.heritage.org/ Research/features/issues/issuearea/Budget.cfm> (accessed June 6,2006).

National Public Radio. "Examining Causes for High Black Unemployment." <http://www.npr.org/templates/ story/story.php?storyId=5062690> (accessed June 6,2006).

U.S. Department of Labor: Bureau of Labor Statistics. "Household Data." <http://www.bls.gov/webapps/legacy/ cpsatab2.htm> (accessed June 6,2006).