Specifying Racial Inequality in Employment Earnings: Has the Process Changed Since 1976? Richard Hogan (hoganr@purdue.edu) Tyrell Connor Sarah A. Mustillo Paper submitted to Social Problems July 2009 Comments and suggestions by Carolyn C. Perrucci were particularly helpful. Abstract Data for household heads in the 1976, 1985, and 2005 panels of the Panel Study of Income Dynamics indicate that racial inequality in employment income has not diminished to any appreciable extent, but neither did it increase appreciably between 1976 and 1985 (as suggested by Cancio et al. 1996). We find little change over time in either our ability to explain income inequality or in the robust effect of race. Access to class or occupational privilege changed fairly dramatically over the three decades of this analysis, but the long term pattern is fairly stable and durable racial inequality, which we view as the product of class, race, and gender relations, producing and reproducing inequality (Hogan and Perrucci 1998; Tilly 1998) within an institutional context of declining real wages, unionization rates, and secure employment opportunities, particularly for black men (Perrucci and Perrucci 2009). Specifying Racial Inequality in Employment Earnings: Has the Process Changed Since 1976? Status attainment scholars believed that racial inequality was essentially about the inheritance of status, which is why racial inequality in employment earnings could be specified by the inherited advantages of education and occupation, with a residual or unexplained degree of inequality, attributed to discrimination (Duncan 1969, p. 100; Sowell 1981, pp. 290-294). Duncan (1969) reported both intercept and slope differences in black and white status attainment models, indicating the double disadvantage of race: both inherited status and the inability to translate education into occupation and income. Then Wright and Perrone (1977) found that black male managers gained comparable earnings advantages from increased education. Stoltzenberg (1975a) found similar results within occupational and industrial segments. The problem, of course, was that most blacks lacked the education, the managerial/professional positions, and the access to employment opportunities in the core industrial sector. Thus Wilson (1978, p. 1) concluded that blacks no longer suffered "racial oppression" so much as "economic class subordination." Since then, Tomaskovic-Devey et al. (2006) have documented the racial desegregation of occupations, 1966-1980, indicating that progress has been stalled since 1980. Cancio et al. (1996) argue, in a similar vein, that between 1975 and 1984 racial discrimination increased, due to declining federal support for racial justice. Both Tomaskovic-Devey et al. and Cancio et al. argue, against Wilson (1978) and others who would reduce to race to class (e.g., Stolzenberg 1975a; Wright and Perrone 1977), that racial discrimination increased as the threat of the Civil Rights Movement and the opportunity of divided elites (particularly economic versus political elites) subsided (see Tarrow 1998, p. 76, on political opportunities; see Tilly 1978, pp. 133-138, on opportunity/threat). Tomaskovic-Devey et al. (2006) acknowledge that there are, in addition, effects of the shift to a service economy, but the thrust of their conclusions is that progress toward racial equality has stalled for what are, essentially, political reasons. We are more inclined to support the class theorists, while conceding that race cannot be reduced to class (Hogan 2005a). Still we are inclined to argue that better measures of class and more attention to how race and class are reproduced through gender relations will illuminate efforts to disaggregate the components of racial inequality. We propose to begin this task by considering three panels from the Panel Study of Income Dynamics (PSID). First, we will look at the Reagan years (as Cancio et al. [1996] have done) and consider the possibility that racial inequality in employment earnings (in these data) increased between 1976 and 1985. Then we will look at more recent data (2005) to consider the extent to which what Cancio et al. (1996) consider to be the effect of the Reagan years was really a secular trend in the postmodern capitalist era (Harvey 1990), in which the decline of manufacturing and of traditional New Deal union benefits (Hogan 2005b) has resulted in increasing racial inequality that cannot be specified by the effects of education, marital status, occupation, or class. Simply stated, the most important changes are changes in the occupational or class structure (Hauser et al. 1975). In conclusion, we will claim that a better specification of class relations illuminates the nature of these changes. Specifically, as we document here, the concomitant growth of the black professionals, managers, and self-employed or supervisorial classes with the even more spectacular growth of the black non-union working class, between 1976 and 2005, explains the paradox of increasing employment opportunities for black men and increasing racial inequality in earning. 2 As a first step toward specifying racial inequality in employment earnings, we compare data for household heads in the PSID, using the 1976, 1985, and 2005 panels, to indicate, first, that racial inequality in employment income has not diminished to any appreciable extent, but neither had it increased appreciably between 1976 and 1985. In fact, the gap between black and white male household head earnings increased between 1976 and 2005, while the gap between white male and black female heads declined modestly, but in both cases the change was most dramatic between 1985 and 2005. Second, we find that even before Reagan took office, our best model of class, race, and gender inequality still does not specify (or explain away) significant racial inequality. Third, we find little change over time in either our ability to explain income inequality or in the robust effect of race. It is clear that access to class or occupational privilege changed fairly dramatically over the three decades of this analysis, but the earnings advantages have not always been comparable. Ultimately, then, we conclude that the civil rights and equal opportunity efforts of the Sixties did bear fruit in providing access to "middle class" employment opportunities, but the long term pattern is fairly stable and durable racial inequality, which we view as the product of race, class, and gender relations, producing and reproducing inequality (Hogan and Perrucci 1998; Tilly 1998) within an institutional context of declining real wages, unionization, and secure employment, particularly for black men (Perrucci and Perrucci 2009). Disentangling Disadvantage "Among blacks in the twentieth century, the initial success of the nonviolent civil rights movement slowed perceptibly as more militant, direct action stiffened the resistance of the larger society ... The point here is not to definitively solve the question as to how much of intergroup differences ... have been due to the behavior and attitudes of the particular ethnic groups [versus] 3 the behavior and attitudes of the larger society. The point is that this is a complex question, not a simple axiom." (Sowell 1981, p. 294). One of the challenges of disentangling disadvantage is to avoid partitioning blame between the victims of discrimination and the discriminators. What Duncan (1969) calls the "vicious cycle of poverty" is frequently used by left leaning social critics (e.g., Michael Harrington 1963, quoted in Duncan 1969, p. 85) to blame the system or by conservatives to blame the victim, or their parents (Gallaway 1966, cited in Duncan 1969, p. 87). Although the liberal proponents of equal opportunity and affirmative action were relying on the best available social science data it was not clear to Duncan that they understood the difference between intercept and slope differences, or, in lay terms, between the initial disadvantage of being black (inherited status of parents) and the barriers to achievement that are associated with being black (blocked or unavailable mobility paths). Duncan (1969) found that black men fail to capitalize on their achievements and on the achievements of their parents. Not only do they start out at a disadvantage, but the disadvantage is compounded by the inability to translate father's occupation into occupational mobility (or even simple inheritance) or to translate occupation and education into income. Featherman and Hauser (1978) later reproduced the racial difference in inheritance of occupation, both in the original Blau and Duncan (1967) data from 1962 and in their 1973 replication. In 1962, only 13.3% of black sons of upper non-manual fathers achieved upper nonmanual status, but this increased to 43.9% in 1973. Among white men, however, 57% (in 1962) and 59% (in 1973) inherited upper non-manual occupational status (Kerbo 2009, pp. 391, 400). Thus we might argue that there has been progress but there continues to be racial inequality, both 4 in the inheritance of status and in the status attainment process. That much of the story seems noncontroversial. Obviously, Civil Rights and Great Society legislation had a tremendous effect on poverty and on racial inequality. It seems equally clear that there has been little change in patterns of racial inequality since 1973, particularly in the earnings gap between white and black males. Although the gender gap has declined markedly since 1970 it appears that the racial gap has remained relatively stable, as has the pattern of unemployment. Black males earn about 60% of what white males earn, and they suffer unemployment rates of double the white figure (Hogan and Perrucci 2007; Kerbo 2009, p. 349). Sociologists who focus on the segmentation of labor and industrial markets, most notably Stolzenberg (1975a), challenge the idea that blacks earn less as a function of their education and occupation, insisting that status attainment has failed to appreciate the extent to which the returns on education and experience vary across occupation and industry (Stolzenberg 1975a; Stolzenberg 1975b). Wright and Perrone (1977) similarly argue that class relations specify the previously observed differences in return on education. Black male managers, although they earn less than their white counterparts, receive comparable return on education. Wright (1997, pp. 67-68) explains that a large component of racial inequality can be specified by class. As he explains, "[J]ust under 30% of white men occupy privileged class locations, compared to 12.5% of white women, 8.4% of black men and 3% of black women." (Wright 1997, p. 69). At the opposite pole, "87% of black women, 77% of black men and 67% of white women are in the extended working class, compared to only about 51% of white men." (Wright 1997, p. 69). Wright (1997) intends to subsume all forms of inequality under the rubric of "exploitation," but Tilly (1998) and Hogan (2001) argue that organizations (including unions, firms, and even extended families) create categorical inequality through either "exploitation" or 5 "opportunity hoarding." Specifically, they effect inequality by including subordinates (or instituting subordination) to facilitate super-ordinate pursuit of profit (exploitation) or by excluding others from the pursuit of profitable enterprise (opportunity hoarding). As Hogan (2001) explains, racial inequality is rooted in endogamy rules that exclude blacks from the opportunities to capitalize on the resources that whites inherit or marry. This exclusion (opportunity hoarding) from the family is combined with exploitation at work and reproduced or institutionalized in various forms of patronage networks that exclude blacks from employment or business opportunities. In addition, the exclusion of blacks from the white family is reproduced in racially segregated housing, which becomes institutionalized into real estate and lending practices that further reduce the ability of blacks to accumulate wealth in the form of housing equity (Oliver and Shapiro 1997, pp. 19-23, 86). Ultimately, we seem to have specified distributional components of racial inequality that we might associate with "opportunity hoarding" in racial and ethnic patronage, denying blacks access to managerial and professional positions in the core industrial sector, or to union jobs in manufacturing and construction industries. At the same time, the exploitation of labor, through employment and the lack of capital required for self-employment, and the opportunities for mobility from employee to supervisor (if not employer) are also critical components of the enduring racial inequality in employment earnings. In the analysis that follows we will include measures of occupation, industry, and class, along with the standard (often considered human capital) measures of education, hours/weeks worked and years of work experience, along with age, marital status, and region (since wage rates and employment opportunities vary across regions). 6 We are not particularly interested in contrasting "human capital" with class analysis or in arguing about how to measure class (Grusky and Sørensen 1998; Hogan 2005a; Robinson and Kelley 1979; Wright 1997). Similarly, we are inclined to include whatever information is available about unions and firm size (Kalleberg and Van Buren 1996), as well as the correlated measure of industrial core and periphery (Beck et al. 1978). Our intention is to specify the most efficient model for explaining income inequality by race, class and gender in 1976, 1985, and 2005 panels of the PSID, so that we can consider the extent to which the specification has changed or anything else has changed across three cohorts of household heads. Although we shall offer separate specification for black and white males and females we are particularly interested here in racial differences, which is why we are limiting our attention to heads of households (not including wives). Although this limits our ability to examine gender inequality (since the vast majority of household heads, following the 1968 convention for the first wave of the PSID, are married men) it gives us a better estimate of changes in racial inequality across cohorts, since households tend to reproduce race and class through gender relations, most notably marriage and child rearing. Here we shall ignore the details of this reproduction and look only at the outcomes, which reflect unequal life chances and business opportunities. Data and Methods The PSID offers forty years of fairly detailed information about employment, assets, and family finances. Here we are limiting our attention to three waves of data. The data from 1976 and 1985 were used by Cancio et al. (1996) to support their claim that racial discrimination (which had declined between 1962 and 1972: Featherman and Hauser 1978; Hout 1984) actually increased between 1976 and 1985 due to "the government's retreat from anti-discrimination 7 initiatives in the 1980s" (Cancio et al. 1996, p. 541). We add data from the 2005 panel and estimate Ordinary Least Squares (OLS) Regression Models predicting head of household logged annual earnings from employment (including self-employment: called "head's labor income" in PSID). We do not include wives' earnings, capital gain/losses, government or private pensions or entitlements and we limit our sample to black and white heads of households who reported that they were currently working at the time of the interview. In order to compare the results across waves we use weights (provided by PSID) to approximate population parameters in comparing means and in OLS models for all household heads. This also corrects for the over-sampling of black households. In the OLS models we use a series of dummy variables to distinguish white, male, married, core (industrial sector), manager, professional (occupational titles), supervisor (with authority for pay and promotions), proprietor (self-employed with less than five employees), employer (five or more employees), union (member) and region (North East [NE], Mid West [MW], West and South [excluded/reference category in OLS models]). We also use continuous measures of age (in years) and education (scaled 1-9 by PSID in 1976 and 1985; scaled 0-6, following Wright and Perrone 1977, in 2005), experience (years worked fulltime since age 18), hours/week and weeks/year worked during previous year. The class and occupational measures (following Hogan 2005a) exclude managers, professionals, and the self-employed from "union workers" and excludes the self-employed from managerial but not professional classifications. In other words, respondents might be selfemployed professionals but not self-employed managers. The same is true for supervisors. There are no self-employed supervisors, only employers and proprietors. Thus we might consider employer, proprietor, supervisor, and worker to be the mutually exclusive and 8 exhaustive class categories, with worker as the reference (excluded) category. Similarly, we might consider professional, manager, union worker, and non-union worker as mutually exclusive and exhaustive occupational categories, with non-union worker as the reference (excluded) category. Supervisor could not be coded for 2005, nor could experience. Similarly, firm size (more than fifty workers) was not available for the earlier panels. Within these limits we estimated the same models for all three years—identical models for 1976 and 1985, for all black and white, male and female heads of households, combined and analyzed separately. We also estimated the mean income (weighted) for all and separately for white and black men and women and used these to calculate racial and gender earnings gaps (percent of average earnings for black men and for white and black women/average white male earnings). These means (and gaps) provide the most direct evidence of increasing or declining racial and gender inequality, while the OLS models provide evidence of changes in the specification of race, class, and gender inequality. Results Table 1 reports weighted mean (and standard deviation) annual earnings for white and black male and female household heads in the PSID in 1976, 1985, and 2005. For each year, the percent of white male income is presented for white females and for black males and females. Also reported ("Total") are means (and standard deviations) for all heads of households (along with N for total sample and subsamples). (table 1 about here) 9 Clearly white men claimed the highest income (labor income from head) and black women claimed the lowest. Also, the income (in nonstandard or "real" dollars) rises dramatically over time. Average total income more than doubles between 1975 and 1984, and it more than doubles again between 1984 and 2004. As seen in the "% of white male" figures, white female household heads claim a relatively stable 54-57% of white male income, rising slightly to indicate a modest decline in the gender gap during the Carter-Reagan years and a return to the baseline in 2004. Black males also experience a modest increase in relative income in 1984 but a much more substantial decline by 2004, averaging around 68% but exhibiting more variation over time than we see for white females. In fact, for black men, the 1975-2004 decrease in relative earnings, from 68% to 63% of white male earnings, is significant (z=2.16, p<.05 [two tailed]). Black females actually lose their relative standing between 1975 and 1984 but achieve substantial progress in reducing the compounded race and gender gap from 39% in 1984 to 46% of white male earnings in 2004. The declining racial gap for Black female heads, 1975-2004, is not significant (z=-1.48), although the short-term decline from 1984 to 2004 is significant (z=-2.14, p<.05 [two tailed]). The distributional component of racial inequality is evident in Table 2, which reports means and standard deviations of the predictors of income from the data of 1976. As seen in the first panel of Table 2, 1976 household heads are 90% white, 82% male, and 71% married. Of course, virtually none (~2%) of the female heads are married, in contrast to 88% of white and 73% of black male heads. The racial gap in education is greater, as is the gender gap in years of work experience and in hours/week and weeks/year worked. Most heads, particularly white female heads, worked in the core, but there is a substantial racial gap in class and occupation. Nearly 14% of white men and 6% of white women are managers, compared to nearly 5% of 10 black men and women. Fully 18% of white males and 22% percent of white females hold professional positions, compared to 6% of black men and 11% of black women. Nearly 23% of white men are supervisors, compared to 12% of black men and less than 10% of white and black women. The race and gender gaps are even greater among proprietors and employers, where there are no black women and few black men, none of whom employ more than 4 workers. Black men are distinguished among union workers—40% of black male heads, but most blacks and most white women are non-union, non-professional, non-managerial workers (42% of black male heads, 54% of white women, and 64% of black women, but only 28% of white male heads).1 Finally, blacks heads are distinguished in 1975 as residing primarily in the South (56% of black men and 47% of black women. Thus region as well as education, occupation and class are major components of racial inequality. (table 2 about here) As seen in Table 3, however, the racial gap in education has diminished considerably by 1984, particularly for black men. In fact, in contrast to 1976, black male heads report higher education than their black female counterparts. The other obvious changes for black men are the growth of self-employment (proprietors and employers) and the decline of union workers, from 40 to 32%. On balance, black male heads increased their representation among the professionals and the self-employed, even among employers, but did not reduce the racial gap in occupational or class composition, since 45% of black male heads are non-managerial, non-professional nonunion workers in 1985, as opposed to 27% of white male heads. 11 (table 3 about here) Table 4 reports means and standard deviations from 2004, which indicate further uneven progress in narrowing the racial gaps in the distributional component of racial inequality. Black women reduced the 1985 educational gap with black men and substantially increased their representation in professional occupations. As professional employment declines modestly for white females, between 1975 and 1984, black females increase their professional employment from 11% to 18% (1975-2004 change is significant: z=-3.17, p<.003) and more than double their managerial employment, from .048 to .099 (z=-2.77, p<.01). Black men report similar increases in professional employment, from .059 in 1975 to .13 in 2004, (z=-5.0, p<.0001) and in selfemployment, with nearly 4% employers of 5 or more workers (approximating the population rate). The increase in self-employment for black men, from .018 in 1975 to .082 in 2004, is highly significant (z=-6.09, p<.0001). At the same time, however, there is a dramatic decline in union workers, falling to 22% of black male heads. The relative decline in union workers among black male heads, from .404 in 1975 to .216 in 2004, is highly significant (z=8.17, p<.0001) Thus, despite increasing representation in self-employment and professional occupations, 53% of black male heads are classified as non-union (non-managerial, nonprofessional) workers, compared to only 40% of white men.2 (table 4 about here) 12 Table 5 reports the results of OLS regressions predicting logged employment earnings for all heads and for white and black male and female household heads in the 1976 PSID. As seen in the first panel of Table 1 (coefficients and s.e. for "All" heads), this model fits the data fairly well. The explained variance (R2) is almost 55%. Virtually all of the effects are significant in what the literature suggests as the expected direction. Not surprisingly, white, married men earn more, even after we control for class, occupation, etc. Older heads earn less because we are controlling for years of work experience. In other words, compared to younger workers with the same education and experience, older heads earn less. (table 5 about here) Also, heads earn more as education, years of work experience, hours/week, and weeks/year increase. Work in the core industrial sector, managerial and professional titles and supervisorial (pay and promotion) authority all predict higher income. Proprietors (with less than 5 employees) earn no more than non-union workers, but employers (with five or more employees) earn significantly more, as do union workers. Finally, heads residing in the Northeast claim higher incomes (compared to the South), but Midwest and West heads do not. The second panel of Table 5 reports the results of the same model in predicting logged earnings of white male household heads. The model still fits the data very well, although the R2 drops to .43, and the same pattern of effects obtain. The only differences, in fact, are that age is no longer significant and that Midwest and West are modestly (p<.05) significant. In other words, old white men don't suffer in comparison to younger white men with comparable 13 experience and, for white men, residence outside the South predicts higher earnings, even in the Midwest and the West. White female heads (panel 3) seem to offer the best fit for this model (R2=.65), but there are only 350 white female heads of household in the 1976 data, and these are, of course, mostly single women. In any case, marital status does not predict income, but the negative effect of age (net of experience) is highly significant, while the effect of education is barely significant (p<.05 but >.04). These white female heads also lack significant income boosts associated with managerial titles and supervisorial (pay and promotion) authority. They do, however, claim higher earnings as employers, and claim the benefits of professional occupation, and union membership but not region. Black male heads, on the other hand (see panel 4) present a somewhat different picture. The model fits well (R2=.50) but, as was the case for white female heads, some of the effects are small or insignificant. Like white men, marriage predicts higher earnings, and older heads do not earn significantly less (compared to younger heads with same experience). Similarly, education is a particularly large and significant effect, but black heads do not claim significant benefits from professional titles, while the benefit of managerial title is only marginally significant (p<.05). Like white men (and unlike white women), black male heads claim a substantial, significant earnings boost from supervisorial authority. There are, however, too few black employers to count and no significant effects of proprietorship. Union membership predicts higher wages but Northeast residence does not, although there is a modestly significant effect of residence in the Midwest. For black females (panel 5) the model fits very well (R2=.62), and there are many large and highly significant effects, even though there are only 345 black female heads in this sample. 14 Neither age nor marriage produces significant effects on income, and experience is only modestly significant. Unlike white females, education yields substantial and significant earnings advantages. Also significant are the effects of hours and weeks worked and core industrial sector (which are significant for everyone) and of professional title, supervisorial authority, and union protection. Managerial title has a modestly (p<.05) significant effect, and there are too few selfemployed to count. Like white males, there is a significant earnings boost for Northeast residence, and like black male heads, there is a modest effect of Midwest residence (as opposed to South), which predicts higher income. Table 6 reports results from the same model for the 1985 PSID. In the first two panels (All and White Males) the results are virtually identical to the 1976 data. We see the same general pattern as in Table 5, although our R2 has dropped to .49 (All) and .39 (White Males). It is, perhaps, worth noting that age remains insignificant for white men and, among regional effects, only Northeast residence predicts higher earnings. (table 6 about here) White females heads offer some consistency but also more striking change. In contrast to white men, marriage is still insignificant, while age is a major liability, and education a modestly significant asset. At the same time, managerial (as well as professional) title is significant in 1985, although supervisorial authority, as in 1975, has no significant effect on 1984 earnings. Proprietorship is significantly less remunerative than non-union labor while the effect of employing five or more persons is smaller, but remains as significant as it was in 1976 (p<.05). 15 The effect of union membership increases in size and significance, and there is a modestly significant (p<.05) income boost for Western (compared to Southern) residence. Black male heads also seem to have experienced both positive and negative changes in earnings opportunities. Although marriage is still a significant effect, it has diminished in size and significance. Age is still insignificant, while managerial title (which was modestly significant in 1976) and professional title (not significant in 1976) are both significant predictors of higher earnings for black male heads in 1985. Union and supervisorial authority continue to yield large and significant effects, plus there is a substantial and highly significant effect of employing five or more persons, which was totally lacking in 1975. At the same time, the effect of Midwest residence is no longer significant. The changes for black female heads are less evident. They continue to report significant effects of education, particularly compared to white women, along with substantial and modestly significant effects of managerial and, more significant, professional title, as well as union membership. There is some increase in self employment but no apparent income benefits and too few black female employers to count. Similarly, as is the case for black males, there are no region effects. Most striking, in contrast to black males, the effect of supervisorial authority, which was substantial and significant in 1975, is insignificant in 1984. Table 7 reports the results of a virtually identical set of OLS regressions predicting the logged annual income of household heads in the PSID of 2005. Here we are lacking data on work experience and supervisorial authority, but we have firm size (which was lacking in 1976 and 1985). In this case, "Large" is a dummy variable that indicates more than 50 employees at head's place of employment (or business). Because we lack a work experience measure the effect of age is positive. Older heads (who tend to have more work experience) earn more. 16 Other than that the pattern of effects for the first two panels (All and White Males) is virtually the same as in Tables 5-6. Large firm predicts higher earnings. Also, the regional effect of Northeast residence predicts highest earnings, but only for white men and black women. (table 7 about here) For white women and blacks the 2005 data suggest a general but uneven improvement in opportunities. It is difficult to disentangle the age/experience puzzle, but older white women (like black men and women) earn a little more. Education, however, offers large, significant effects for all, including white women, for whom the effect was only modestly significant in earlier panels. The advantages of professional employment seem small and less significant for black women, but the advantages of managerial title are uniformly large and highly significant. Women, black and white, lack the substantial and significant benefits of employment in large firms, while the benefits of self-employment are complex. White female heads claim a modest and modestly significant earnings boost from proprietorship and a more substantial and significant boost from employing five or more workers. Blacks, male and female, report lower earnings from proprietorship, but the earnings loss is smaller and less significant for black male heads. Black male heads claim a modest and modestly significant earnings boost from employing five or more workers, but black female heads report substantially and significantly (if only modestly) lower earnings as employers. The hitherto substantial and significant effects of union membership, particularly for black women, are, in 2004, limited to men, white and black. Discussion 17 First and foremost, we see very little evidence of a decline in racial inequality between 1975 and 2004. The earning gap separating black and white men actually increases, as black men claim 68% in 1975 and only 63% in 2004 (z=2.16, p<.05). The relative earnings of black women do increase, however, from 41% to 46% (z=-1.48, n.s.). Second, there is some evidence that both race and gender gaps are decreasing between 1975 and 1984 (except for black women) but this is followed by a comparable decline for white women and an even greater decline for black men between 1984 and 2004. Here we see some evidence of the effect of government policy, which Cancio et al. (1996) associate with the eighties, although it seems to extend far beyond the limits of the Reagan years. Clearly, we will need to look more closely at more panels to approximate the pattern of rising and falling racial inequality. Although we are not focusing on white women here we should explain why the much publicized decline in the gender gap is not evidenced in these data. The fact that we do not see the precipitous decline in the gender gap that has been evidenced elsewhere is due to the fact that we are excluding wives from our analysis. It is, in fact, the substantial increase in married women working fulltime outside the home that is responsible for this decline, together with the shift to a post-industrial economy in which the employment opportunities for middle class women are increasing at the expense of working class men (Hogan and Perrucci 2007, pp. 228229; Tomaskovic-Devey et al. 2006, p. 585). In these data we see some evidence of the latter in the relative decline in black male earnings and the relative increase for black females, but we would need to add wives to the sample to see the effects of the former. Nevertheless, we see some evidence of a reduction in the distributional component of racial inequality in comparing mean education and proportions in professional occupations or managerial, supervisorial, or self-employed/employing classes. Black household heads are 18 reducing the education gap and are increasing their representation in professional occupations. Black women are increasing their representation in managerial positions and are claiming substantial and significant earnings boosts on that basis. Black men are experiencing increasing access to and benefits from professional titles and even employer class relations. The racial gap in privileged class relations declined for men. At the same time, however, the racial gap at the bottom of the occupational structure increased. Black men continued to be over-represented among union workers and to claim substantial earnings advantages on that basis. Consequently, they suffered the most from the decline in union jobs, associated with both the turn from manufacturing to sales and service and the general lack of government support for unions. Without an estimate of the prevalence of supervisorial authority it is difficult to trace this pattern into the 21st century, but it does seem that self-employment opportunities continued to grow for black men, even as union jobs declined. Comparing the OLS models for these three periods clarifies how the process of generating racial inequality changes between 1975 and 2004. In 1975 the benefits of class, particularly self-employment, were all but denied to black men and women. By 1984 black men were employers and claimed significant earnings advantages on that basis, while black women, still scarce among the self-employed, claimed advantages of education, managerial and professional occupations and supervisorial authority. Although the 2005 data do not allow us evaluate supervisorial authority, black men and women enjoyed a substantial and significant income boost from managerial and professional positions. Black men (but not women) continued to enjoy the benefits of employing others. In fact, it appears that self-employment for black female heads of household was a stop-gap measure for balancing the demands of home and 19 work, but this possibility will require further investigation, comparing wives to female heads and controlling for number of children. Conclusion There is an apparent disjuncture between the comparison of mean earnings and the OLS models that predict earnings. While the OLS models indicate a general improvement since 1975 in access to the benefits of occupation and class, particularly for black men, their relative earnings (in comparison to white men) have declined. If we focus on the distributional aspects of racial inequality it seems that there was a dramatic increase in the percent of black male heads with professional occupations, from 6% in 1975 to 10% in 1984, with a more modest increase, to 13% in 2004. During the same period, black female heads in professional positions increased from 11% (1975) to 13% (1984) to 18% in 2004. Black women also reported significant gains in managerial titles and claimed significant earnings advantages on that basis. These distributional effects seem important in explaining how black female heads did not enjoy the same advantages, associated with education and occupation/class, in the early years but did claim considerable advantage as educated, professional and managerial women in the post-industrial service economy. More important in explaining the relative decline of black male head income was the declining number of union members, associated with the long-term trend of shifting from manufacturing to service, combined with Reagan's tough anti-union policy, illustrated in his evisceration of the Air Traffic Controllers (PATCO) union (Hogan 2005b). Forty percent of black male heads were union workers in 1975, but that figure declined to 32% in 1984 and 22% in 2004. For all heads, the percent union workers declined from 20% in 1975 to 16% in 1984, 20 falling to 11% in 2004. Clearly, unionization rates were declining in general, but the effects on black male heads of households was most dramatic, first, because they were over-represented among union workers (at twice the percentage for all heads) and, second, because the effect of union membership was among the most substantial, significant, and enduring for black male heads, 1975-2004. Thus the shift to the service economy and the decline of union jobs seem to be critical factors in explaining increasing equality of opportunity and increasing earnings inequality. This is not to say that federal, State, and even local policy does not matter. Instead, we should conclude that racial inequality is reproduced through patronage and family relations from which blacks have been historically excluded and through class relations, which have historically included black men and women in unpaid and underpaid employment. We invite others to join us in specifying when and where the processes and mechanisms that engender inequality have converged or diverged in various ways, historically and through the life course. Perhaps other panels (e.g., 2000—just before the election of G. W. Bush) and other datasets might be used, together with various temporal (e.g., GDP growth statistics) and life course (e.g., year of marriage or childbirth) indicators to specify the complex interweaving of short-term and longterm economic, political, and social patterns that engender or exacerbate, or in some cases diminish inequality in one form or another. 21 Notes 1. The "worker" variable is a dummy, coded "1" when professional, managerial, supervisorial, self-employment, and union membership are all coded "0". This represents the lowest class and occupational status. 2. Since we don't have a supervisor category, this is considerable over-estimation of proletarianization, especially for white male household heads, at least 20% of whom are probably supervisors (based figures for 1976 and 1985 panels). 22 References Beck, E. M., Patrick Horan and Charles M. Tolbert. 1978. "Stratification in a Dual Economy: A Sectoral Model of Earnings Determination." American Sociological Review 43:704-720. Cancio, A. Silvia, T. David Evans, and David J. Maume, Jr. 1996. "Reconsidering the Declining Significance of Race: Racial Differences in Early Career Wages." American Sociological Review 61 (4):541-556. Duncan, Otis Dudley. 1969. "Inheritance of Poverty or Inheritance of Race? Pp. 85-110, in Daniel P. Moynihan, ed., On Understanding Poverty: Perspectives from the Social Sciences (NY: Basic Books). Featherman, David and Robert Hauser. 1978. Opportunity and Change (NY: Academic Press). Gallaway, Lowell E. 1966. 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Pp. 161-176 in Maria Kousis and Charles Tilly (eds.), Economic and Political Contention in Comparative Perspective (Boulder, CO: Paradigm Publishers). Hogan, Richard and Carolyn C. Perrucci. 1998. "Producing and Reproducing Class and Status Differences: Racial and Gender Gaps in Employment and Retirement Income." Social Problems 45:528-549. Hogan, Richard and Carolyn C. Perrucci. 2007. "Gender, Race, and Income Gaps." Pp. 224-231 in Robert Perrucci and Carolyn C. Perrucci (eds.), The Transformation of Work in the New Economy: Sociological Readings (Los Angeles: Roxbury Publishing). Hout, Michael. 1984. "Occupational Mobility of Black Men: 1962 to 1973." American Sociological Review 49:308-322). Kalleberg, Arne L. and Mark E. Van Buren. 1996. "Is Bigger Better? Explaining the Relationship between Organization Size and Job Rewards." American Sociological Review 61:47-66. Kerbo, Harold R. 2009. Social Stratification and Inequality, Seventh Edition (Boston: McGrawHill). Oliver, Melvin L. and Thomas M. Shapiro. 1997. Black Wealth/White Wealth: A New Perspective on Racial Inequality (NY: Routledge). Perrucci, Robert and Carolyn C. Perrucci. 2009. America at Risk: The Crisis of Hope, Trust, and Caring. (Lanham, MD: Rowman & Littlefield). 24 Robinson, Robert V. and Jonathan Kelley. 1979. "Class as Conceived by Marx and Dahrendorf: Effects of Income Inequality and Politics in the United States and Great Britain." American Sociological Review 44:38-58. Sowell, Thomas. 1981. Ethnic America: A History. NY: Basic Books. Stoltzenberg, Ross M. 1975a. "Education, Occupation, and Wage Differences between White and Black Men." American Journal of Sociology 81 (2):299-323. Stolzenberg, Ross M. 1975b. "Occupations, Labor Markets and the Process of Wage Attainment." American Sociological Review 40 (5):645-665. Tarrow, Sidney. 1998. Power in Movement: Social Movements and Contentious Politics, Second Edition (NY: Cambridge University Press). Tilly, Charles. 1978. From Mobilization to Revolution (Reading, MA: Addison-Wesley). Tilly, Charles. 1998. Durable Inequality (Berkeley, CA: University of California Press) Tomaskovic-Devey, Donald, Catherine Zimmer, Kevin Stainback, Corre Robinson, Tiffany Taylor, and Tricia McTague. 2006. "Documenting Desegregation: Segregation in American Workplaces by Race, Ethnicity, and Sex, 1966-2003. American Sociological Review 71 (4):565-588. Wilson, William Julius. 1978. The Declining Significance of Race: Blacks and Changing American Institutions. (Chicago: University of Chicago Press). Wright, Erik Olin. 1997. Class Counts: Comparative Studies in Class Analysis (Cambridge: Cambridge University Press). Wright, Erik Olin and Luca Perrone. 1977. "Marxist Class Categories and Income Inequality." American Sociological Review 42:32-55. 25 Table 1 Weighted Mean (and Standard Deviation) Annual Earnings for White and Black Male and Female Household Heads in 1975, 1985, and 2004, with Percent of White Male Earnings for White Females, Black Males, and Black Females 1975 mean s.d. 1984 N % white male 2004 Mean s.d. N $29,490 (752.86) 2374 White Males $14,394 (242.96) 2125 White Females $7,780 (275.58) 350 54% $16,915 (610.74) 338 (375.46) 896 68% $20,865 (774.46) $5,950 (317.12) 345 41% $11,613 $12,780 (197.12) 3716 $26,274 % white male mean s.d. N % white male $64,297 (2242.25) 2442 57% $34,989 (1341.17) 477 54% 880 71% $40,214 (1955.74) 786 63% (544.73) 374 39% $29,670 (1368.42) 584 46% (582.41) 3966 $55,005 (1581.74) 4289 Black Males $9,744 Black Females Total source: Panel Study of Income Dynamics 1976, 1985, and 2005 panels (annual income reported for previous year) 26 Table 2 Weighted Means and Standard Deviations of Independent Variables for All Heads and for White and Black, Male and Female Heads in Panel Study of Income Dynamics 1976 Households All Effect White Male Married Age Educ Exper Hours Weeks Core Mgr Prof Supervisor Proprtr Emplyr Union Worker NE MW South West Number of Cases Means .899 .815 .707 39.70 4.89 18.51 43.95 45.72 .608 .117 .175 .192 .049 .023 .204 .343 .224 .308 .295 .169 S.E. .005 .008 .009 .265 .036 .259 .201 .157 .009 .006 .007 .008 .005 .003 .008 .009 .009 .009 .009 .008 3716 White Males Means S.E. .877 39.65 5.00 19.64 45.43 46.36 .591 .138 .179 .225 .065 .030 .208 .283 .237 .320 .273 .164 .008 .295 .043 .300 .227 .161 .012 .008 .009 .010 .006 .004 .010 .010 .010 .011 .010 009 White Females Means S.E. .018 41.08 4.98 14.14 38.99 43.63 .686 .059 .224 .093 .003 .006 .106 .540 .211 .300 .242 .246 2125 .007 .849 .093 .643 .539 .541 .025 .013 .023 .017 .003 .005 .018 .028 .023 .026 .023 .024 350 27 Black Males Means S.E. Black Females Means S.E. .727 38.24 3.82 18.27 42.09 44.75 .613 .048 .059 .117 .009 .031 .855 .116 .882 .589 .609 .031 .015 .016 .023 .003 .022 37.30 4.27 13.74 37.49 42.99 .621 .048 .106 .072 .019 1.10 .126 1.00 .742 1.03 .046 .024 .029 .032 .033 .031 .023 .031 .033 .016 .130 .642 .219 .202 .466 .113 .029 .046 .042 .036 .047 .032 . 404 .418 .121 .242 .562 .072 896 345 Table 3 Weighted Means and Standard Deviations of Independent Variables for All Heads and for White and Black, Male and Female Heads in Panel Study of Income Dynamics 1985 Households All Effect White Male Married Age Educ Exper Hours Weeks Core Mgr Prof Supervisor Proprtr Emplyr Union Worker NE MW South West Number of Cases Means .899 .803 .672 40.55 5.22 19.48 43.71 46.70 .711 .126 .210 .202 .045 .040 .160 .320 .221 .278 .316 .181 S.E. .005 .009 .010 .244 .035 .244 .212 .125 .009 .007 .008 .008 .004 .004 .007 .009 .009 .009 .009 .008 3966 White Males Means S.E. .840 40.54 5.29 20.54 45.06 47.01 .718 .143 .214 .227 .056 .050 .162 .266 .226 .291 .293 .185 .009 .276 .041 .283 .239 .135 .010 .008 .009 .010 .005 .005 .009 .010 .010 .010 .010 .009 White Females Means S.E. .013 41.29 5.28 15.05 39.70 45.68 .701 .100 .257 .158 .011 .010 .083 .454 .229 .286 .261 .225 2374 .006 .740 .091 .530 .608 .410 .026 .017 .025 .021 .006 .006 .016 .028 .025 .026 .025 .023 338 28 Black Males Means S.E. .759 39.53 4.62 19.57 41.91 46.37 .678 .044 .104 .105 .018 .009 . 322 .452 .160 .182 .566 .084 .028 .776 .105 .795 .574 .480 .031 .012 .022 .020 .005 .005 .034 .032 .030 .028 .034 .016 880 Black Females Means S.E. .011 39.43 4.44 17.17 37.01 45.31 .666 .036 .125 .062 .004 .006 1.03 .153 1.26 .664 .571 .044 .013 .034 .020 .003 .182 .609 .177 .165 .579 .079 .037 .046 .044 .033 .048 .024 374 Table 4 Weighted Means and Standard Deviations of Independent Variables for All Heads and for White and Black, Male and Female Heads in Panel Study of Income Dynamics 2005 Households All Effect White Male Married Age Educ Hours Weeks Core Mgr Prof Large Proprtr Emplyr Union Worker NE MW South West Number of Cases Means .869 .749 .544 44.12 4.34 43.24 47.87 .734 .150 .205 .550 .079 .040 .110 .438 .186 .272 .325 .201 S.E. .006 .009 .010 .246 .032 .231 .112 .009 .007 .008 .010 .005 .004 .006 .010 .008 .008 .009 .008 4289 White Males Means S.E. .746 44.25 4.48 44.75 48.03 .745 .164 .212 .516 .092 .050 .106 .402 .191 .283 .290 .219 White Females Means S.E. .011 .281 .039 .275 .133 .010 .008 .009 .011 .007 .005 .007 .011 .009 .010 .010 .009 .001 44.97 4.24 39.09 47.23 .702 .154 .210 .579 .052 .013 .074 .504 .174 .302 .296 .214 2442 .001 .696 .078 .571 .295 .024 .018 .021 .025 .012 .005 .014 .026 .020 .024 .023 .022 477 29 Black Males Means S.E. .489 41.05 3.79 43.74 48.45 .744 .049 .130 .700 .047 .035 . 216 .532 .202 .146 .586 .058 .034 .731 .087 .805 .324 .026 .011 024 .029 .012 .018 .031 .034 .033 .021 .034 .013 786 Black Females Means S.E. .021 43.54 3.76 38.68 47.38 .707 .099 .184 .674 .057 .008 .141 .530 .160 .200 .520 .116 .008 .959 .096 .650 .423 .035 .024 .030 .036 .018 .005 .030 .039 .032 .028 .039 .030 584 Table 5 Ordinary Least Squares Regression Model (Unstandardized Coefficients and Standard Errors Reported) Predicting 1975 Annual Income for All Heads (Weighted) and for White and Black, Male and Female Heads (Unweighted) in Panel Study of Income Dynamics 1976 Households Effect White Male Married Age Educ Exper Hours Weeks Core Mgr Prof Super Proprtr Emplyr Union NE MW West Constant All Coef. .107*** .182*** .173*** -.009*** .087*** .016*** .011*** .031*** .216*** .307*** .294*** .204*** .047 .642*** .365*** .089** .014 .040 6.21*** S.E. .028 .043 .037 .002 .008 .002 .002 .002 .023 .039 .032 .031 .068 .101 .024 .029 .026 .032 .118 F=142.12*** R2=.545 N=3716 * p<.05 **p<.01 White Males Coef. S.E. .162*** -.003 .089*** .012** .006*** .029*** .163*** .282*** .269*** .214*** .038 .587*** .365*** .095** .058* .085** 6.66*** .037 .004 .008 .004 .001 .001 .023 .039 .036 .030 .047 .069 .030 .031 .027 .032 .119 F=99.42*** R2=.430 N=2125 White Females Coef. S.E. -.119 -.009*** .042* .012*** .029*** .039*** .412*** .105 .283** .117 .663 .927* .198* .159 -.049 .017 5.43*** .192 .003 .021 .003 .003 .003 .063 .129 .082 .105 .500 .360 .094 .081 .072 .074 .207 F=38.33*** R2=.648 N=350 ***p<.001 30 Black Males Coef. S.E. Black Females Coef. S.E. .121** -.000 .090*** .009* .007*** .037*** .194*** .226* .151 .168** .155 .040 .004 .012 .004 .002 .002 .034 .095 .089 .063 .117 -.098 -.002 .094*** .008* .021*** . 032*** .392*** .346* .303** .402** .256 .003 .020 .004 .003 .002 .052 .160 .100 .130 .366*** .102 .097* .018 6.10*** .037 .064 .047 .065 .155 .221** .251** .128* -.134 5.53*** .067 .082 .065 .083 .206 F=57.52*** R2=.495 N=896 F=37.88*** R2=.616 N=345 Table 6 Ordinary Least Squares Regression Model (Unstandardized Coefficients and Standard Errors Reported) Predicting 1984 Annual Income for All Heads (Weighted) and for White and Black, Male and Female Heads (Unweighted) in Panel Study of Income Dynamics 1985 Households All Effect White Male Married Age Educ Exper Hours Weeks Core Mgr Prof Super Proprtr Emplyr Union NE MW West Constant Coef. .108** .182*** .121** -.011** .107*** .016*** .017*** .028*** .339*** .280*** .283*** .227*** -.081 .402*** .434*** .084* -.043 .036 6.58*** S.E. .033 .047 .038 .004 .009 .004 .002 .003 .029 .038 .036 .028 .076 .089 .030 .034 .029 .033 .197 White Males Coef. S.E. .109** -.006 .113*** .014*** .014*** .029*** .268*** .227*** .244*** .238*** -.065 .309*** .428*** .084* -.016 .020 6.88*** F=94.48*** R2=.485 N=3966 * p<.05 **p<.01 .036 .004 .009 .004 .001 .002 .027 .042 .036 .033 .053 .060 .036 .033 .030 .034 .140 F=92.95*** R2=.387 N=2374 White Females Coef. S.E. -.108 -.016*** .052* .022*** .025*** .033*** .509*** .280** .346*** .156 -.745** .633* .334** .133 -.061 .182* 6.44*** .239 .003 .024 .004 .003 .004 .069 .107 .086 .089 .271 .313 .115 .084 .078 .082 .273 F=30.21*** R2=.601 N=338 ***p<.001 31 Black Males Coef. S.E. .091* -.000 .108*** .009* .014*** .030*** .271*** .260** .283*** .212** -.167 .578** .467*** -.003 -.064 -.098 6.65*** .043 .004 .013 .004 .002 .002 .038 .093 .073 .064 .108 .217 .043 .070 .054 .066 .186 F=42.91*** R2=.443 N=880 Black Females Coef. S.E. .022 .001 .093*** -.005 .037*** . 033*** .347*** .267* .299** .173 -.483 .253 .004 .023 .004 .004 .003 .063 .132 .111 .110 .401 .559*** -.239 .025 -.018 5.41*** .089 .124 .079 .107 .256 F=29.81*** R2=.555 N=374 Table 7 Ordinary Least Squares Regression Model (Unstandardized Coefficients and Standard Errors Reported) Predicting 2004 Annual Income for All Heads (Weighted) and for White and Black, Male and Female Heads (Unweighted) in Panel Study of Income Dynamics 2005 Households All Effect White Male Married Age Educ Hours Weeks Core Mgr Prof Large Proprtr Emplyr Union NE MW West Constant Coef. .143*** .123** .201*** .003* .099*** .024*** .028*** .258*** .363*** .201*** .212*** .072 .548*** .289*** .129** -.031 .001 6.80*** S.E. .034 .042 .039 .012 .013 .002 .003 .030 .040 .044 .028 .070 .121 .033 .038 .030 .041 .190 F=96.20*** R2=.430 N=4289 * p<.05 **p<.01 White Males Coef. S.E. .183*** .004** .104*** .021*** .031*** .205*** .340*** .180*** .201*** .011 .484*** .283*** .150*** -.001 .028 7.06*** .035 .001 .010 .001 .002 .032 .043 .042 .030 .053 .067 .048 .041 .035 .038 .144 White Females Coef. S.E. .227 .006** .068*** .028*** .029*** .343*** .393*** .250** .097 .275* .591** .061 .076 -.098 .081 6.75*** F=83.63*** R2=.341 N=2442 .537 .002 .019 .002 .004 .059 .074 .076 .053 .121 .220 .102 .075 .062 .070 .224 F=33.28*** R2=.520 N=477 ***p<.001 32 Black Males Coef. S.E. .174*** .007** .115*** .014*** .029*** .173*** .286** .258*** .161*** -.183* .305* .355*** .015 .006 .085 7.20*** .042 .002 .017 .002 .003 .043 .089 .068 .043 .086 .130 .052 .073 .054 .077 .185 F=35.99*** R2=.412 N=786 Black Females Coef. S.E. -.152 .006* .139*** .028*** .034*** .223*** .374*** .163* .061 -.515*** -.637* .103 .258** .052 .166 6.31*** .180 .002 .022 .003 .003 .060 .096 .078 .058 .125 .280 .088 .093 .064 .106 .203 F=37.22*** R2=.496 N=584