Walter Williams’s fans are in for a treat — and people who are not Walter Williams’s fans are in for a shock — when they read his latest book, Race and Economics.
It is a demolition derby on paper, as Professor Williams destroys one after another of the popular fallacies about the role of race in the American economy.
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I can still vividly recall the response to one of Walter’s earliest writings, back in the 1970s, when he and I were working on the same research project in Washington. Walter wrote a brief article that destroyed the central theme of one of the fashionable books of the time, The Poor Pay More.
It was true, he agreed, that prices were higher in low-income minority neighborhoods. But he rejected the book’s claim that this was due to “exploitation,” “racism,” and the like.
Having written a doctoral dissertation on this subject, Walter then proceeded to show why there were higher costs of doing business in many low-income neighborhoods, and that these costs were simply passed on to the consumers there.
What I remember especially vividly is that, in reply, someone called Walter “a white racist.” Not many people had seen Walter at that time. But it was also a sad sign of how name-calling had replaced thought when it came to race.
The same issue is explored in chapter six of Race and Economics. The clinching argument is that, despite higher markups in prices in low-income neighborhoods, there is a lower than average rate of return for businesses there — one of the reasons why businesses tend to avoid such neighborhoods.
My own favorite chapter in Race and Economics is the third, which I think is the most revealing chapter in the book.
It begins, “Some might find it puzzling that during times of gross racial discrimination, black unemployment was lower and blacks were more active in the labor force than they are today.” Moreover, the duration of unemployment among blacks was shorter than among whites between 1890 and 1900, whereas unemployment has become both higher and longer-lasting among blacks than among whites in more recent times.
None of this is explainable by what most people believe or say in the media or in academia. But it is perfectly consistent with the economics of the marketplace and the consequences of political interventions in the marketplace.
Race and Economics explains how such interventions impact blacks and other minorities, whether in housing markets, the railroad industry, or the licensing of taxicabs — and irrespective of the intentions behind the government’s actions.
Minimum-wage laws are classic examples. The last year in which the black unemployment rate was lower than the white unemployment rate was 1930. That was also the last year in which there was no federal minimum-wage law.
The Davis-Bacon Act of 1931 was in part a result of a series of incidents in which non-union black construction workers enabled various contractors from the South to underbid northern contractors who used white, unionized construction labor.
The Davis-Bacon Act required that “prevailing wages” be paid on government construction projects — “prevailing wages” almost always meant in practice union wages. Since blacks were kept out of construction unions then and for decades thereafter, many black construction workers lost their jobs.
Minimum wages were required more broadly under the National Industrial Recovery Act of 1933 and under the Fair Labor Standards Act of 1938, with negative consequences for black employment across a much wider range of industries.
In recent times, we have gotten so used to young blacks having sky-high unemployment rates that it will be a shock to many readers of Walter Williams’s Race and Economics to discover that the unemployment rate of young blacks was once only a fraction of what it has been in recent decades. And, in earlier times, it was not very different from the unemployment rate of young whites.
The factors that cause the most noise in the media are not the ones that have the most impact on minorities. This book will be eye-opening for those who want their eyes opened. But those with the liberal vision of the world are unlikely to read it at all.
Definitely a book I plan to pick up and read starting today. Walter E. Williams and Thomas Sowell are some of the few men who looks at the state of black community and tell it like it is, not only from an economic perspective but from a historical one as well.
So your point is that a black man might be more likely than a white man to accept a $3.00-an-hour job, so before minimum wage laws were passed they had lower unemployment? I'd buy that. Accepting near-slave wages is likely to reduce unemployment. But I'm curious to hear how this is a *good* thing, or how this reflects on black unemployment today.
If anything, it suggests that the only way for blacks to achieve the unemployment levels of whites they have to do the same job for less money. Minimum wage jobs don't generally require much skill so I doubt eduction is much of a factor. If anything your comments reinforce the suspicion of racism on black unemployment levels.
Not really tflavin. I suggest you re-read the great Thomas Sowell's words and think about it a little bit more. The answers are obvious unless you a predisposed to your own set of prejudices and stereotypes.
tflavin: his point is, since you so obviously missed it, is that liberal policies have contorted the free market, and thus increased the unemployment levels of minorities. As far as 'slave wages' you get paid what you are worth, and if you can find a better job at more pay, then get it.
Like it or not, thanks to the failed educational policies of the democrats minorities tend to have less education as a whole, than whites. Of course we all know the dirty little secret of why these kind of policies were implemented, to keep people uneducated, and dependent upon the government, thus making them reliable democrat voters. Yes these policies are rooted in a liberal parternalistic racism that says people of color can't make it without a liberal 'bwana' to take care of them.
tflavin: Racism is a constant, but economic self-interest almost always trumps racism. The point is that when there was no minimum wage, blacks had a better chance at competing with whites for jobs. When a minimum wage is introduced, and an employer is only willing to pay this set wage, the market forces are eliminated which makes black employees cost effective. May as well hire the white guy if the price is the same.
"May as well hire the white guy if the price is the same." -- Jonah's Software Development Guy
Okay, that's just blatantly racist. I'm really not the type to call racism for every little thing, but there is really no other way to view that.
joe_1234: I *did* get that point, which is why I plainly reiterated it in my comment. I went on to explain why that fact is problematic in itself because it suggests that blacks have to accept less than whites for the same low-skill jobs. These are not accounting positions; you don't need a degree to wash dishes. I realize that white are considered more valuable in the free market. I'm saying that this fact itself suggests institutional racism. See Jonah's comment above for a perfect example of the racial attitudes I'm attempting to highlights.
AndyD: That's really not an argument I can respond to. I read his article and made comments. Please respond to my comments if you have something to say.
tflavin: I don't think it means that blacks have to accept lower wages for the same jobs. It means that as a group, they have less education and skills. You can argue that is a result of racism, but I think a better explanation is the failed educational policies, and the entire failed 'war on poverty' which had a disproportionate impact upon the black family.
When the minimum wage goes up, people eliminate lower positions because those positions don't generate enough income to cover the higher wage. They are replaced with automation for example. it also means that people on the bottom stay on the bottom because they cannot get an entry level job to acquire more skills so they can move up the ladder. Again I think this is a designed policy of liberalsim to keep people reliable democrat voters.
tflavin: I'm not advocating racist hiring practices, I'm simply outlining the thought methodology of racist employers. My point is that racism is far more likely to enter the equation when cost factors are eliminated.
So, yeah, I guess there is another way to view that!
MarkW: No, not identical. If whites were slightly or even moderately less likely to be unemployed I might concede the point; however, unemployment levels for undereducated, underskilled blacks is approaching twice those of undereducated unskilled whites. Considering the jobs under discussion do not require much education or skill it becomes difficult to explain such a significant disparity, particularly in light of the fact that the disparity continues to exist even when controlled for education.
These figures are from 2010 as a whole:
Whites with less than a high school diploma:13.9%
Blacks with less than a high school diploma: 22.5%
Racism exists...I think we can all admit that. I'm really not the type to think racism is the only reason the black community struggles. I do believe there are also issues within the community that holds them back. However, to suggest race is not a factor in any way is disingenuous. We all know racist people, some of whom are in a position to hire and fire. The claim that this has zero impact is a little absurd.
The only question is: What can we do about it? I agree that we can't legislate racism away...it's an unfortunate part of life.
As I have noted in other comments, if you go to the poor part of town, you will find that the little stores, which primarily sell liquor, cigarettes, and lotto tickets, are almost entirely owned and staffed by immigrants. Doesn't matter if the poor part of town is black or not. Immigrants are willing to accept lower standards of living (yet higher than where they came from), in line with the lower rates of return at such businesses in that part of town.
Selling liquor in the ghetto: Guess it's a job Americans won't do. I wonder what would have happened if the country had maintained its Ike-era historical low immigration? Presumably there would have been fewer such ghetto stores, due to the lower availability of owner-staff; even higher prices, due to reduced competition, and (gasp) fewer folks in the ghetto drinking, smoking and playing lotto.
Racism (or at least, prejudice) will never go away because ultimately no one can succeed on their own. They need a support system, e.g. a family, a tribe, a club, a network of friends. People thus tend to try to help those who belong to their support group, to help the group succeed and expecting that maybe someday they'll get back some benefit.
People tend to consider their neighbors part of their support group, and people who live in the same neighborhood tend to share economic relative parity, meaning the poor live in the same part of town. They don't meet a lot of hiring/firing authorities except for ten minutes in an interview. Sometimes they blow that by not understanding the importance of dressing appropriately for the interview. You don't have long to make an impression, after all.
I don't think there is widespread racism. I don't know anyone who is blatantly a racist. I think there are lots of people ready to blame failures on bigotry toward some group they belong to -- blacks, women, older people, younger people. And there are others who make a living off encouraging such people to believe they can't get ahead because of evil people who discriminate against them.
tflavin: May as well hire the white guy if the price is the same." -- Jonah's Software Development Guy
You say racism is the only way to look at the above statement, but apparently you can't read. He already stated it quite accurately: Economic self-interest trumps racism.
In other words, the employer will hire the white guy because--statistically speaking--the white guy will be better qualified--in come cases perhaps only on paper, but that's still enough. That's the bitter truth, hard as it is to accept.
If the black worker accepted a slightly lower wage he might just win the bid. Then he demonstrates his proficiency and good job performance and gets a raise. What the heck is wrong with that?
Now, take a look at the NBA. What kind of economic force is at work in that workplace? Please address all that nasty racism, OK?.
potted owl: So your argument is that it's not racism because white people are actually better.
As I've already said, the disparity is staggering *even after* you control for education.
Can you provide any support for your claim that white high school dropouts are more skilled than (or somehow more preferable to) comparable black high school dropouts? If education is controlled for what "statistically speaking" on "on paper" differences are you referring to?
And bear in mind, these "differences" have to explain a discrepancy that is quickly approaching 100%, meaning blacks (black makes in particular) are almost twice as likely to be unemployed. Whatever evidence you bring to this discussion has to be pretty substantial to explain away such a disparity.
tflavin,
You have to show that white high school dropouts are getting more jobs than black ones. It is entirely possible that because the graduation rate is higher among whites, so is employment. Furthermore, you have to demonstrate that the two populations are equally industrious in looking for employment. You haven't controlled for any variables; you are just assuming that the populations are identical and thus racism is in effect.
"Furthermore, you have to demonstrate that the two populations are equally industrious in looking for employment. "
To be described as "unemployed" you must, by definition, be actively seeking work. That term does not apply to underemployed, or those who had have not recently applied for a job:
I have yet to hear a single explanation that can describe a 100% differential after controlling for education. Everything I've read here in defense of the disparity has suggested that whites are somehow just better: better at looking for work, better at interviewing, better dressers, etc. Given the numbers they'd have to be a *lot* better at those things. So if that's the case, fine. Let's see some support.
tflavin: your own link shows that asians have a lower unemployment rate than whites for those who graduated high school, or did not graduate high school. do you think this is attributed to racism?
So obviously there are factors other than racism, such as cultural factors.
tflavin: Like most liberals, you have no concept of what it takes to be successful in the job market.
While the jobs in question may not take much in the way of skills, the biggest skill is rarely if ever learned on the job. It's your attitude. The idea that you should show up on time everyday and do what the boss tells you, is an alien concept for way too many people in today's ghettos. I've dealt with many employment agencies and they all agree with that.
I believe one has to consider the entire timeline being discussed in order to properly assess the situation. If there had been no minimum wage laws over the last 80 years, then more blacks would have been employed over those 80 years, albeit at arguabley lower wages. But they would have been working and proving and improving themselves and thus their community.
It would seem that after 80 years of consistent work habits coupled with changing societal views and legal frameworks pertaining to race would have allowed the black community to better establish itself for future generations. Thus, todays landscape would be very different.
Instead, the government has seen fit to try and engineer equality instead of allowing black people prove themselves (which they absolutely would have done) and earn a deep, true equality that would be respected by all. Instead, the government has disincentivized the black community (in general) and created an environment where their successes are viewed suspiciously due to preferential treatment....NOT racism.
