Chapter 4
Minorities in the Labor Force

A HISTORICAL PERSPECTIVE

Minorities and ethnic groups have always been an important part of the U.S. labor force. In many instances groups were allowed, or even encouraged, to immigrate to the United States to fill specific labor needs. Perhaps the most obvious example is the involuntary immigration of Africans, who provided slave labor for southern plantations as early as the seventeenth century. Later, Asians and Hispanics were sought to mine resources, farm land, and build railroads.

African-Americans

Since 1619, with the arrival of the first slave ships to North American shores, African-Americans have been part of the labor force. While most worked as unpaid slaves on southern plantations, a few were allowed to work for pay to purchase their freedom and that of their families, an effort that often took many years. Besides farm and household labor, some developed talents in masonry, music, or other skills and were hired out by their owners.

In 1890, less than thirty years after President Abraham Lincoln issued the Emancipation Proclamation (which declared slaves living in Confederate states free) and states ratified the Thirteenth Amendment (which outlawed slavery in the United States), approximately three million African-Americans worked in the paid labor force. Because the best job prospects and the obstacles created by racial discrimination were the least burdensome in the urban areas of the North, hundreds of thousands of African-Americans left their rural southern homes and migrated north before and during World War I (1914–18) in search of unskilled work in factories and homes. During the 1940s arms production for World War II (1939–45) again attracted hundreds of thousands of African-Americans to the North, bringing about a moderate increase in the number of African-American workers. These migrations of African-Americans from the South to the North following both world wars were the largest movements of people within the United States in the country's history and did much to influence U.S. history.

Asian-Americans

Chinese immigrants came to the United States not only because of the gold rush in California but also to work on railroads, on farms, and in construction and manufacturing. During the first decade of the twentieth century, almost 130,000 Japanese came to the rapidly expanding sugarcane plantations of Hawaii and the fruit and vegetable farms of California. President Theodore Roosevelt and the Japanese government, however, in the "Gentleman's Agreement" of 1907, agreed to stop the flow of Japanese workers to the United States by withholding passports, thus cutting the flow to a trickle. The most recent wave of Asians came to the United States in the 1970s and 1980s, when more than a million refugees were admitted from Vietnam, Cambodia, Thailand, and Laos following the Vietnam War (1965–73).

Hispanic Americans

Many Hispanic Americans can trace their roots to the time when the southwestern states were still a part of Mexico. The ancestors of most Hispanic Americans, however, arrived after Mexico surrendered much of its territory following its defeat in the Mexican-American War (1846–48). The U.S. policy toward Hispanic American workers (mainly from Mexico) has alternately encouraged and discouraged immigration, reflecting the nation's changing needs for labor. Before the start of the twentieth century, although there was little demand in the Southwest for Mexican labor, Mexicans moved back and forth across completely open borders to work in mines, on ranches, and on railroads.

As the Southwest began to develop, however, and Asian immigration slowed, the demand for Mexican labor increased. In "Mexican Immigrantion" (2005, http://rs6.loc.gov/learn/features/immig/alt/mexican4.html), the Library of Congress's Learning Page reports that between 1910 and 1930 the number of Mexican immigrants in the United States tripled, from two hundred thousand to six hundred thousand. The need for Mexican labor was so great that during World War I the Immigration and Naturalization Service exempted many Mexicans from meeting most immigration conditions, such as head taxes (paying a small amount to enter the country) and literacy requirements. While legal immigration rose, a large amount of illegal immigration also occurred. Historians estimate that during the 1920s there were as many illegal as legal Mexican immigrants in the country.

During the Great Depression of the 1930s, when jobs became scarce, many Americans believed the nation's unemployment situation was significantly compounded by illegal aliens working in the United States. As a result, thousands of Mexicans, both legal immigrants and illegal aliens, were repatriated (sent home). During this time the Mexican population in the United States fell by almost one-half.

When World War II began in Europe in 1939, the United States needed workers to help in its role as supplier to the Allied countries, primarily Great Britain. When the lure of better-paying factory jobs brought many rural workers to the city, the nation looked to Mexico to fill the need for agricultural workers. The Bracero Program (1942–64) permitted entry of Mexican farm workers on a temporary contract basis with U.S. employers. While the program was considered an alternative to illegal immigration, it likely contributed to it because there were more workers who wanted to participate in the program than there were openings.

Marc Perry et al. in Evaluating Components of International Migration: Legal Migrants (December 2001, http://www.census.gov/population/www/documentation/twps0059.html) estimate that more than one million undocumented Hispanics entered the United States in the early 1980s. A major downturn in the Mexican economy led to a surge in Mexican immigrants, and several hundred thousand other Hispanics arrived from Central America, most notably from El Salvador and Guatemala, to escape bloody civil wars and repressive regimes. Overall, Hispanics accounted for approximately one of every three legal immigrants to the United States during this period. In 1986 the Immigration Reform and Control Act (PL 99-603) gave more than two million Mexicans legal status in the United States. Since that time, Hispanics from Cuba, Central and South America, and Mexico have continued to enter the United States, legally and illegally.

"Get Tough" Policy

To stem the flow of undocumented workers, a "get tough" policy was initiated in 1994, but in the opinion of critics the money spent on installing infrared sensors, cameras, and stadium-level lighting along the Mexican border was essentially wasted. Instead of crossing at more populated and better-secured areas, illegal immigrants crossed into the United States through mountains and deserts, facing dangerous conditions, and many have died as a result.

While arrests of illegal aliens along the southwest border increased, enforcement in the workplace was rare. In fact, the U.S. economy became so dependent on a pool of low-wage workers that mass deportation of undocumented workers was not a realistic option. In January 2004 President George W. Bush proposed a guest-worker program that grants a three-year work permit to millions of undocumented workers. This permit is renewable for at least three more years, with a chance to apply for a green card to gain permanent residency. In addition, workers in other countries can apply for work permits to take jobs that no U.S. citizen wants. As of 2006 the administration's guest-worker program faced opposition from both the left and right of the political spectrum. Republican officeholders in states with small Hispanic populations were not supportive, and Democrats were quick to point out that the proposal offered no increased chance for permanent residency status, let alone citizenship. Undocumented workers were also split on the proposal. While they welcomed the chance to visit their home countries without fear of being unable to return to the United States, they were also wary of providing information about themselves to the government, fearful that they could more easily be deported once their permits expired.

The debate on immigration heated up in the first quarter of 2006. Lawmakers debated legislation that would make it easier for illegal immigrants to obtain legal status by not subjecting them to felony prosecution. Rallies made up of hundreds of thousands of people formed across the country to call attention to this divisive issue.

LABOR FORCE PARTICIPATION AND UNEMPLOYMENT

Participation in the labor force means that a person is either employed or actively seeking employment. Those who are not looking for work because they are "going to school" or "unable to work" are not considered part of the labor force. The labor force increases with long-term growth of the population. It responds to economic forces and social trends, and its size changes with the seasons.

To be classified as unemployed, a person must:

• Not have worked in the week specified for the survey.
• Have actively sought work sometime during the four weeks preceding the survey.
• Be currently available to take a suitable job.

In November 2005, 1.8 million (10.6%) African-Americans in the civilian labor force were unemployed, a proportion more than 2.5 times higher than the white population. (See Table 4.1.) Among Hispanics, 1.2 million (6%) Hispanics in the civilian labor force were unemployed. (See Table 4.2.) The lowest unemployment rate was among Asians and Pacific Islanders. Approximately 239,000 (3.6%) Asians and Pacific Islanders in the civilian labor force were unemployed in November 2005. (See Table 4.1.)

African-Americans

Historically, African-American workers have participated in the labor force in larger proportions than whites, primarily because African-American women were more likely to be working than their white counterparts. The increased entry of white women into the labor force since the 1970s, however, has narrowed the gap between the two races. The U.S. Department of Labor (February 2003, http://www.bls.gov/webapps/legacy/cpsatab2.htm) reports that in 1972 twenty-six million (42.7%) white women participated in the labor force, compared with 3.6 million (51.2%) African-American women. By November 2005, 53.1 million (59.9%) white women over age twenty were in the civilian labor force, which was still proportionately lower than the 8.7 million (64.9%) African-American women over age twenty who participated in the labor force. (See Table 4.1.)

Conversely, the labor force participation rate of African-American men twenty years and older has declined since the 1970s. According to the Department of Labor (February 2003, http://www.bls.gov/webapps/legacy/cpsatab2.htm), in 1972, 4.4 million (78.5%) African-American men twenty years and older were employed; in 2005 7.6 million were employed (dropping the rate to 70.3%). In comparison, 63.8 million (76.1%) white men twenty years and older were in the civilian labor force in 2005. The overall participation rate for all African-Americans (men and women) was 64.1% (17.1 million) in 2005, compared with 66.3% (122.8 million) among all whites. (See Table 4.1.)

Although unemployment rates rise and fall with the strength of the economy, for several decades the unemployment rates for African-Americans have run twice as high than for whites. Often having fewer marketable skills and less education than whites, African-Americans are more likely to remain unemployed for longer periods, especially during a recession. As a result, they are more likely to be labeled as "long-term unemployed" (those without work for at least twenty-seven weeks).

In November 2005 the unemployment rate for African-American men twenty years and older (705,000, 9.3%) was nearly triple that of white men (2.3 million, 3.7%) in the same age group. African-American women age twenty and older (791,000, 9.1%) had more than twice the unemployment rate of white women twenty years and older (2.1 million, 3.9%). (See Table 4.1.)

Given the difficulties many African-Americans encounter when trying to find employment, many of them have stopped looking for jobs because they do not think they can find them. In this case they are classified as "discouraged workers" (people not in the labor force who want jobs but have stopped looking for them). Discouraged workers are not included among the unemployment figures.

Hispanic Americans

The U.S. Department of Labor's Bureau of Labor Statistics (BLS) began maintaining annual employment data on Hispanics in 1973. In November 2005, 20.2 million (68.4%) Hispanics were employed or actively looking for work. (See Table 4.2.) As of the fourth quarter of 2005 Mexican Americans had the highest overall participation rate (12.8 million, 68.7%), followed by Cuban Americans (792,000, 62.6%) and Puerto Ricans (1.6 million, 62%). Men twenty years and older in all three groups had a much higher labor force participation rate than did women of the same age. Among Mexican Americans, 7.4 million (85.8%) men and 4.5 million (56.5%) women participated in the labor force; among Cuban Americans, 439,000 (74.9%) men and 322,000 (52.8%) women participated in the labor force; and among Puerto Ricans, 841,000 (74.8%) men and 712,000 (56.1%) women participated in the labor force. (See Table 4.3.)

The unemployment rate for Hispanics in November 2005 was 6% (1.2 million). (See Table 4.2.) The unemployment rate varies among Hispanic people depending on country of origin. In the fourth quarter of 2005 the Puerto Rican-origin population had the highest rate of unemployment at 7% (115,000). Mexican Americans had an unemployment rate of 6.2% (816,000), and Cuban Americans had the lowest rate of unemployment at 3% (24,000). (See Table 4.3.)

Asians and Pacific Islanders

In November 2005, 6.6 million (66.1%) Asians and Pacific Islanders age sixteen and over were in the civilian labor force. (See Table 4.1.) In 2004, 2.8 million (59.5%) Asian-American women and 3.3 million (78.4%) Asian-American men age twenty and older were in the labor force. A higher percentage of Asian-American men age twenty and older were participating in the labor force than either white men (62.9 million, 76.2%) or African-American men (7.4 million, 70.9%). However, a lower percentage of Asian-American women age twenty and older were participating in the labor force than either white women (52.2 million, 59.7%) or African-American women (8.5 million, 64.2%). (See Table 4.4.)

Unemploymet figures for Asians and Pacific Islanders are similar to those for non-Hispanic whites. In November 2005 the unemployment rate for Asians and Pacific Islanders was 3.6% (239,000), slightly lower than the 4% (4.9 million) figure for the white population. (See Table 4.1.) The low rate of unemployment among Asians and Pacific Islanders can be attributed, in part, to their high educational attainment and their commitment to small family businesses.

Older Asians and Pacific Islanders tend to work longer because of the strong work ethic in Asian cultures and frequently because of economic need. Often they are employed in family businesses that do not offer early retirement packages. Depending on the time of their immigration and their work history, Asians and Pacific Islanders age sixty-five and older may not be entitled to adequate Social Security benefits. Also, some may have immigrated under circumstances that prevented them from retaining any wealth they might have accumulated in their native lands.

Native Americans and Alaska Natives

Gathering accurate statistical data on the labor force participation rates of Native Americans and Alaska Natives is difficult. They are often counted as "other" in BLS and Census Bureau data, making specific information hard to obtain. In addition, the concepts that guide the assessment of labor force participation nationally are considered to be inappropriate for Native American population groups. According to Judith Kleinfeld and John A. Kruse in "Native Americans in the Labor Force: Hunting for an Accurate Measure" (Monthly Labor Review, July 1983, http://www.bls.gov/opub/mlr/1982/07/rpt3full.pdf), because few jobs are available on many reservations, adults do not actively seek work—but to exclude these individuals from the statistics on the labor force results in a serious underestimation of unemployment of Native Americans.

Stella U. Ogunwole, in We the People: American Indians and Alaska Natives in the United States (February 2006, http://www.census.gov/prod/2006pubs/censr-28.pdf), reports that in 2000, 33.5% of Native Americans and Alaska Natives lived in "American Indian Areas"—that is, reservations or trust lands. In 2001 Indian Population and Labor Force Report (2001), the Bureau of Indian Affairs reports that in 2001 labor force participation rates varied greatly between reservations; the Yakama tribe had the highest unemployment rate (86%).

In most cases reservations do not generate jobs necessary to support Native American families. This is a major reason that the leadership on Native American reservations has been so willing to introduce or expand casino gambling on their reservations. According to Anne Merline McCulloch in "The Politics of Indian Gaming: Tribe/State Relations and American Federalism" (Publius, June 1994), the opening of casinos on reservation lands seems to have greatly improved employment and economic autonomy of Indian tribes while reducing dependence on welfare.

DISCRIMINATORY EMPLOYMENT PRACTICES

Under Title VII of the Civil Rights Act of 1964 (PL 88-352), employers may not intentionally use race, skin color, age, gender, religious beliefs, or national origin as the basis for decisions relating to almost any aspect of the employment relationship, including hiring. Despite this law, African-Americans, Hispanics, and other minority groups do suffer from discriminatory hiring practices as well as other race-based obstacles to finding employment.

On June 17, 2003, civil rights attorneys filed a class action lawsuit against Abercrombie & Fitch, one of the nation's largest clothing retailers, for discriminating against people of Hispanic, Asian-, and African-American descent. The young adults were represented by the Mexican American Legal Defense and Education Fund, the Asian Pacific American Legal Center, and the National Association for the Advancement of Colored People's Legal Defense and Educational Fund. In "Lieff Cabraser and Civil Rights Organizations Announce Abercrombie & Fitch Charged with Employment Discrimination in Federal Class Action Lawsuit" (June 2003, http://www.afjustice.com/press_release_01.htm), Thomas A. Saenz of the Mexican American Legal Defense and Educational Fund was quoted as saying: "Through means both subtle and direct, Abercrombie has consistently reinforced to its store managers that they must recruit and maintain an overwhelmingly white workforce." According to AFjustice.com in "$40 Million Payment, Detailed Plan for Diversity in Employment Discrimination Suit against Retail Giant Abercrombie & Fitch" (November 2004, http://www.afjustice.com/press_release_02.htm), the lawsuit was settled on November 16, 2004, requiring the company to pay $40 million to the applicants and employees who charged the company with discrimination as well as to comply with provisions related to the recruitment, hiring, job assignment, training, and promotion of minority employees. Although this was a prominent case brought to court, discriminatory employment practices are difficult to prosecute effectively and remain pervasive in the United States.

Equal Employment Opportunity Commission

On May 17, 2000, the U.S. Equal Employment Opportunity Commission (EEOC) issued new guidelines to facilitate the settlement of federal-sector discrimination complaints, including claims brought under Title VII. Under the administration of Chairperson Ida L. Castro, the EEOC sought to reform its complaint process for federal employees. The new directive authorizes federal agencies to enter into settlement of bias claims, including monetary payment.

In fiscal year 2005 the EEOC received 26,740 charges under Title VII alleging race-based discrimination. That same year, the EEOC resolved 27,411 charges (some of these cases were carried over from the previous year, which explains why more charges were resolved than reported). Of those, 2,801 (10.2%) were settled, with payments totaling $76.5 million to the charging parties. Another 1,161 (4.2%) of the claims were found to have reasonable cause; 377 (1.4%) were charges with reasonable cause closed after successful conciliation; 784 (2.9%) were charges with reasonable cause closed after unsuccessful conciliation; and 1,167 (4.3%) charges were withdrawn by the charging party on receipt of desired benefits. (See Table 4.5.) Clearly, racial discrimination in the workplace continues.

WORKFORCE PROJECTIONS FOR 2010

In 2004, for the first time, the percent of the workforce of Hispanic origin (13.1%) was higher than the percent of the workforce that was African-American (11.3%). In addition, more Hispanics than African-Americans will enter the workforce through the year 2014, causing the group to make up an increasingly larger part of the

workforce. The number of African-Americans in the labor force is expected to increase 16.8% during this period, while the number of Hispanics in the workforce is expected to increase by 33.7%. Hispanics are expected to make up 15.9% of the labor force in 2014, up from 13.1% in 2004. The growth of Hispanics in the workforce can be attributed to higher birth rates among that group as well as increased immigration. (See Table 4.6.)

Another fast-growing group in the labor force is that of Asians and Pacific Islanders. The proportion of Asian-Americans in the workforce is expected to increase by 32.4% between 2004 and 2014, and Asians and Pacific Islanders are expected to make up 5.1% of the labor force by 2014. (See Table 4.6.) As with most other minority groups, increases reflect continued high immigration and higher fertility rates among some minority populations.

The non-Hispanic white labor force is expected to grow more slowly than the overall labor force, causing the white proportion to decrease from 70% in 2004 to 65.6% in 2014. (See Table 4.6.) The decrease is due to a relatively low immigration rate of non-Hispanic whites to the United States, projected lower birth rates than those of minority populations, and declining labor force participation by non-Hispanic white men, a reflection of the aging of the white male labor force.

OCCUPATIONS

African-Americans and Jobs

African-Americans are much less likely than whites or Asian-Americans to hold the jobs requiring the most education and paying the highest salaries—those in management, professional, and related occupations. In 2004, 14.9 million African-Americans accounted for 10.7% of the civilian labor force age sixteen and over, a percent that was unchanged from the previous year. Only 26.5% of employed African-Americans held management, professional, or related occupations, compared with 35.6% of white workers. Women of both races were more likely to hold these positions, but only 30.6% of African-American women were managers or professionals, compared with 38.6% of white women. The proportion of African-Americans who held these positions had gone down slightly from the previous year. (See Table 4.7.)

African-Americans are much more likely than whites to work in the poorly paid service occupations. In 2004, 23.8% of African-Americans worked in service occupations, up from 23.1% the previous year. By contrast, 15.2% of white Americans worked in service occupations. (See Table 4.7.)

Any growth in professional employment for African-Americans has generally occurred in fields at the lower end of the earnings scale. According to the BLS, in Employment and Earnings (2005, http://www.bls.gov/cps/cpsaat11.pdf), while 20.8% of all licensed practical and vocational nurses were African-American, only 10% of registered nurses, 5.3% of physicians and surgeons, and 3.6% of dentists were African-American. The same pattern holds true for management positions. While 13.6% of social service and community service managers and 12.8% of education administrators were African-American in 2005, only 3.2% of chief executives, 2.4% of construction managers, and 1.7% of engineering managers were African-American.

In 2004 most African-Americans were concentrated in the management, professional, and related occupations (26.5%), sales and office occupations (26.3%), and service occupations (23.8%). Few African-Americans were employed in production, transportation, and material moving occupations (16.7%) or natural resources, construction, and maintenance occupations (6.8%). (See Table 4.7.)

Hispanic Americans and Jobs

Overall, Hispanic Americans are less likely than African-Americans to hold professional and technical positions. Only 17.3% of employed Hispanics held management, professional, and related occupations, compared with 26.5% of African-Americans. The largest percentages of Hispanics worked in service occupations (24.2%) and sales and office occupations (21.3%). (See Table 4.7.) Like African-Americans, Hispanics, except for Cuban Americans who came to this country in 1959 following the Cuban revolution, are concentrated primarily in low-paying, low-skill jobs.

The BLS reports that in 2004, 17.9 million (12.9%) Hispanics were part of the workforce. (See Table 4.7.) According to the Employment and Earnings, Hispanics were concentrated in low-paying jobs and were under-represented in management, professional, and related occupations (6.4%). Hispanics were overrepresented in service occupations (19.2%) and were concentrated in the lowest-paying occupations even in that industry. They made up 27.3% of janitors and building cleaners, 35.2% of maids and housekeepers, and 37.4% of grounds maintenance workers. They also comprised 20.6% of the food preparation and serving occupations—29.3% of cooks, 30.4% of dining room and cafeteria attendants, and 35.4% of dishwashers. However, they made up only 15.5% of first-line supervisors of food preparation and serving workers.

Significant occupational differences exist among Hispanic subgroups. When it comes to job outlook, Cuban-origin Hispanics have traditionally done better in securing higher-paying jobs, as these immigrants are often well educated. In 2004, 221,000 (30.1%) Cuban Americans in the workforce held professional or managerial

positions, up from 183,000 (28.7%) in 2003. In contrast, 352,000 (23.8%) Puerto Ricans and 1.6 million (14.1%) Mexican Americans held professional or managerial positions. Mexican Americans were more likely to work in service occupations (2.8 million, 24.3%) than in other occupations, especially in food preparation and serving occupations and building and grounds cleaning and maintenance occupations. Puerto Ricans were more likely to work in sales and office occupations (428,000, 28.9%) than in other occupations. (See Table 4.8.)

Asian-Americans and Jobs

The higher educational attainment of many Asian-Americans has resulted in a greater proportion working in higher-paying jobs than other racial and ethnic groups. In 2004 almost half (45.2%) of all Asians and Pacific Islanders worked in management, professional, and related occupations—15.1% in management, business, and financial operations occupations and 30% in professional and related occupations. In comparison, only 35.6% of non-Hispanic whites worked in these occupations. Asian-Americans were next most likely to work in sales and office occupations (23%) and service occupations (16.2%). (See Table 4.7.) According to the BLS's Employment and Earnings, while only 4.4% of the workforce was of Asian origin, 5.9% of managers and professionals were Asian-Americans, and they were especially overrepresented among computer software engineers (24.6%) and computer programmers (18%)—two highly paid occupations.

However, the Employment and Earnings reports that in 2005 Asians and Pacific Islanders were underrepresented in natural resources, construction, and maintenance occupations (1.8%) and in installation, maintenance, and repair operations (3%). While only 4.2% of service workers were Asian-Americans, 43.2% of miscellaneous personal appearance workers were Asian-Americans—reflecting the large number of Asian and Pacific Islander women who work in nail salons and other personal care establishments.

Native Americans and Alaska Natives and Jobs

As stated previously, detailed data on Native American and Alaska Native workers are difficult to obtain. However, the EEOC keeps some basic data on job patterns for minorities in private industry that includes Native Americans and Alaska Natives as a separate category. In 2003 only 7.3% of Native Americans and Alaska Natives were officials and managers, compared with 10.8% of all employees and 5.6% of minority employees; only 11.5% were professionals, compared with 17% of all employees and 11.6% of all minority employees. Native Americans and Alaska Natives were overrepresented, however, among service workers, laborers, operatives, and sales workers. (See Table 4.9.)

MINORITIES AND THE FEDERAL GOVERNMENT

Traditionally, white men have held most of the higher-level positions in the federal government. Along with cabinet members, who are selected by the president, these high-level officials wield the power in federal government. This holds true for many agencies, including the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement, and the U.S. Customs and Border Protection.

The Federal Equal Opportunity Recruitment Program Report for fiscal year 2004 (May 2005, http://www.opm.gov/feorpreports/2004/feorp2004.pdf) finds that minorities were overrepresented in the government workforce with one exception: Hispanics were significantly under-represented in federal jobs. However, minorities are underrepresented at the senior pay grades. For example, African-Americans made up 17.4% of the federal workforce but were overrepresented at the lowest pay grades. In September 2004 more than one in four (27.6%) employees in the lowest positions—General Schedule and Related (GSR) grades one through four—were African-American. Another 25.8% of GSR five through eight, 15.7% of GSR nine through twelve, 10.9% of GSR thirteen through fifteen, and just 6.9% of the senior pay levels were African-American. Asians and Pacific Islanders were also underrepresented at the senior pay levels, representing 5.9% of GSR one-through-four pay levels and 2.6% of the senior pay level. Hispanics represented 8.8% of GSR one-through-four pay levels and 3.4% of senior pay levels. Native Americans represented 5% of the GSR one-through-four pay levels and 0.8% of the senior pay levels.

A major contributor to this situation is time. It takes about twenty years to rise to the top of any organization. In the early 1980s few people of color held any management positions in the federal government. Another possible factor is partiality or discrimination. Some lower-level government employees believe that they have been deprived of promotions because of their gender or race and have filed bias complaints.

MINORITIES IN BUSINESS

According to the U.S. Census Bureau, in 2002 the overwhelming majority of business owners in the United States were white, non-Hispanic individuals. All minority groups except for Asian-Americans were underrepresented among business owners compared with their presence in the U.S. residential population age twenty-five and over. Only 3.9% of business owners were of Hispanic origin, even though the U.S. population was 11.1% Hispanic. African-Americans represented only 1.6% of business owners, even though 11.6% of the U.S. population was African-American. Only 0.5% of business owners were Native American or Alaska Native, compared with 1.3% of the U.S. population. Only Asian-Americans, who represented 5.9% of business owners, were overrepresented in comparison with their presence in the U.S. population (4.4%). (See Table 4.10.)

According to Survey of Minority-Owned Business Enterprises (2001), the Census Bureau reports that in 1997 the largest number of businesses owned by African-Americans, Hispanics, and Asians and Pacific Islanders were service-industry firms. The group of non-classified industries accounted for the largest percentage of most Native American and Alaska Native businesses, followed by the service industry.

Minority Women-Owned Businesses

According to the Census Bureau, 26.5% of business owners in 2002 were women. (See Table 4.10.) The Center for Women's Business Research reports in Businesses Owned by Women of Color in the United States, 2004: A Fact Sheet (2004, http://www.womensbusinessresearch.org/minority/BusinessesOwnedbyWomenof ColorintheUS.pdf) that between 1997 and 2004 the number of businesses that were owned by women of color grew by an astounding 54.6%, from 923,403 firms in 1997 to 1,427,820 firms in 2004. In 2005 one in five (21.4%) of all privately held, women-owned businesses in the United States were owned by minority women. These businesses generated almost $147 billion in sales in 2004. (See Figure 4.1.) Most of the firms (61%) were in the service industry.

Of the businesses owned by minority women in 2004, 553,618 (38.8%) were owned by Hispanic women 419,793 (29.4%) were owned by Asian and Pacific Islander women, 414,472 (29%) were owned by African-American women, and 90,730 (6.3%) were owned by Native American and Alaska Native women. (See Table 4.11.) Firms owned by Asian and Pacific Islander women and Native American and Alaska Native women experienced the greatest growth between 1997 and 2004 (both grew by 69.3%). Hispanic women-owned firms grew by 63.9%, while African-American women-owned firms experienced the slowest growth, at 32.5%, but still much higher than the growth of all privately owned businesses in the United States during that period.

Minority "Set-Aside" Programs under Increasing Attack

Many levels of government, including the federal government, have "set-aside" programs that award a certain percentage of contracts to minority- and women-owned businesses. These programs were developed to remedy the effects of past discrimination and to address the difficulties these firms faced in competing with larger, more established firms for government contracts. Minority businesses are often newer and smaller and have difficulty competing with older, larger businesses that know the process and can afford to make lower bids. Acquiring government contracts can be involved and confusing for businesses unfamiliar with the process. Governments, especially the federal government, are often slow to pay their bills, so businesses frequently have to borrow money to bridge the gap between the delivery of goods and services that must be paid for and the time it takes the government to pay them.

While the U.S. Supreme Court has not yet declared the use of racial classifications unconstitutional, it has ruled them suspect and subject to strict judicial scrutiny. As a result, set-aside programs came under increasing attack in the 1990s and early 2000s.

In 1989 the Supreme Court, in City of Richmond v. Croson County (488 US 469), struck down a Richmond, Virginia, city ordinance that reserved 30% of city-financed construction contracts for minority-owned businesses. The Court ruled that the ordinance violated equal protection because there was no "specific" and "identified" evidence of past discrimination, "public or private," against the Richmond Minority Business Enterprise in city contracting. The majority opinion, written by Justice Sandra Day O'Connor, also noted that the city had failed to "narrowly tailor" the remedy to accomplish any objective other than "outright racial balancing." The opinion further stated that it was a "completely unrealistic" assumption that a 30% assignment to minority business enterprises in a particular trade would be a fair representation of the community.

In a similar case, Adarand Constructors, a white-owned company, sued the government, claiming the company failed to receive a government contract because racial preferences had violated the owner's right to equal protection under the Fifth Amendment. In 1989 the U.S. Department of Transportation awarded a contract for a federal highway project to a construction firm, which in turn subcontracted the job to a Disadvantaged Business Enterprise in compliance with the Subcontractor Compensation Clause. In 1995 the Supreme Court, in Adarand Constructors, Inc. v. Peña (515 US 200), expressed doubt in the validity of the affirmative action programs, based on the Surface Transportation and Uniform Relocation Assistance Act of 1987 (PL 100-17) that channeled $10 billion a year in construction contracts to women- and minority-owned businesses. The court, citing the need for stricter and narrower standards in determining racial preferences when awarding contracts, returned the case to the district court for review.

These Supreme Court decisions have brought many set-aside programs under scrutiny. In June 2000 a federal court in Associated General Contractors of Ohio v. Sandra A. Drabnik decided that the Ohio state program to set-aside 5% of state construction projects for minority-owned businesses was unconstitutional. Even though that court had upheld the state's program in 1983, subsequent U.S. Supreme Court decisions required the federal court to apply a more stringent standard of judicial review, no longer allowing legislatures to use "implicit factfinding of discrimination" to justify racial preferences and affirmative action programs like set-asides.

NATIVE AMERICAN CASINOS—A MATTER OF SELF-RULE

The Indian Gaming Regulatory Act of 1988 (PL 100-497) gives tribes "the exclusive right to regulate gaming on Indian lands if the gaming activity is not specifically prohibited by federal law and is conducted within a State which does not, as a matter of criminal law and public policy, prohibit such gaming activity." The law requires that only tribes, not individuals, run gaming operations. The tribes do not need state approval for class two casinos, which are supposedly bingo halls but which in many cases have slot machine parlors that skirt the law. Class three casinos offer slots, roulette, craps, and poker, and they require state approval. Thus, governors strike deals with tribes, granting class three approval in exchange for a share of the profits going to the state treasury. With many states facing severe budget problems, tribal gaming has become an attractive source of revenue. As a result, tribal gaming has gained considerable political influence. The Tribal Law and Policy Institute reports in "Native Gaming Resources" (2005, http://www.tribal-institute.org/lists/gaming.htm) that as of 2005, 224 of 562 federally recognized Indian tribes were engaged in gaming. How much has tribal gaming helped the Native American population as a whole?

Donald L. Barlett and James B. Steele, in "Wheel of Misfortune" (Time, December 8, 2002), provide a scathing and controversial review of tribal gaming. According to Barlett and Steele, when tribal gaming emerged in the late 1980s "in a frenzy of cost cutting and privatization, Washington perceived gaming on reservations as a cheap way to wean tribes from government handouts, encourage economic development and promote tribal self-sufficiency." But the 1988 Gaming Act "was so riddled with loopholes, so poorly written, so discriminatory and subject to such conflicting interpretations that 14 years later, armies of high-priced lawyers are still debating the definition of a slot machine." Barlett and Steele maintain that only a handful of tribal gaming establishments, those operating close to major population centers, are successful, while the overwhelming majority are either too small or too remote in location: "Casinos in California, Connecticut and Florida—states with only 3% of the Indian population—haul in 44% of all revenue." Barlett and Steele state that in 2002 "290 Indian casinos in 28 states pulled in at least $12.7 billion in revenue. Of that sum,… the casinos kept more than $5 billion as profit. That would place overall Indian gaming among Fortune magazine's 20 most profitable U.S. corporations." But "just 39 casinos generated $8.4 billion. In short, 13% of the casinos accounted for 66% of the take." In 2004 total revenues were projected to top $15 billion.

Also controversial was the authenticity of the tribes involved in gaming. According to Barlett and Steele, leaders of tribes involved in gaming "are free to set their own whimsical rules for admission, without regard for Indian heritage. They may exclude rivals, potential whistle-blowers and other legitimate claimants. The fewer tribe members, the larger the cut for the rest. Some tribes are booting out members, while others are limiting membership." Moreover, many "long-defunct tribes and extended families" have attempted to gain congressional certification to become involved in tribal gaming. In New York State some tribes that are not even recognized as New York tribes, including tribes from Oklahoma and Wisconsin, have teamed with area developers to buy land in the Catskills and elsewhere in the state in hopes of building casinos. They are opposed, however, by local communities—as well as the likes of Donald Trump—who fear further competition to casinos operating in Atlantic City.

McCulloch argues that revenues from gambling casinos have helped spur economic development on reservations and allowed Native Americans to reassert tribal sovereignty. She writes: "Native American tribes have looked to gambling as a means to achieve the economic autonomy requisite for tribal sovereignty, and to improve the lives and the health of their members through employment. The immediate effect of Indian gaming seems to have done just that." The casinos employ large numbers of Native Americans, and with the profits from casinos, the tribes are building schools and community centers; financing education trust funds, local government, and new businesses; and putting in water and sewer systems on reservation lands.

Proponents of tribal gaming point to a number of success stories. The Oneidas of Wisconsin, for instance, took advantage of a bingo hall to lower the tribe's unemployment rate in the early 1990s and used proceeds to build an elementary school and subsidize a Head Start program. The Suquamish in Washington State used gambling profits to buy back former reservation land. While only a handful of tribal casinos generate large revenues, even those operations that break even create jobs that benefit many Native Americans. Tribes not able to take advantage of gambling can also benefit from revenue-sharing programs, such as the one set up in California. The Alliance of California Tribes reports in "California's Gaming Tribes Share More Than $39 Million with Other Tribes" (August 28, 2001, http://www.allianceofcatribe-s.org/financialsharing.htm) that sixty-one tribes with gaming compacts share profits with eighty-four qualifying tribes.

Much of the growth in tribal gaming, which is outpacing both Atlantic City and Las Vegas, is due to the expansion of facilities into full-fledged resorts. Wary that the future might see the curtailment in revenues, some tribes are looking to diversify by investing proceeds into nongaming businesses, thereby establishing an economic base independent of gambling. To counter adverse publicity regarding tribal gaming, the National Indian Gaming Association has launched a public relations effort, the United Tribal Public Relations Campaign.