January 15, 2007
Racism and Wages Posted by Fredric Smoler at 07:55 AM EST In his lead essay on this website (“What Did Martin Luther King Really Believe?”), Josh Zeitz writes that Martin Luther King “leaned on the writings of W. E. B. Du Bois, who famously observed that poor and working-class whites gained nothing from Jim Crow but the psychological ‘wages of whiteness.’ In return for the psychological boost that ‘whiteness’ gave them, poor whites—millions of them, from slavery times through the modern age—surrendered political and economic power to their elite counterparts. . . . Jim Crow divided white and black labor against each other, stunting the growth of unions, labor parties, and liberal political coalitions. Jim Crow thus drove down wages across the board and secured a political system (chiefly in the American South) where taxes were regressive, public services were minimal, and political participation was sharply limited. Remember that on the eve of World War II, poll taxes in eight Southern states disenfranchised as many as 64 percent of white citizens and virtually all eligible black voters. It’s hard to say what most working-class whites got from Jim Crow other than the satisfaction that they weren’t black.” I am pretty confident that Josh knows more about this than I do, but given that caveat, I have some questions. First, all things being equal, wouldn’t white workers’ wages rise as a consequence of racial discrimination in the labor market? If the potential pool of applicants for a set of jobs is limited by racist exclusion of black workers, the law of supply and demand ought to drive up white wages. Did white workers really receive only psychic income from their racial privilege, but no real income? Even in the absence of unions, a tighter labor market usually benefits workers. So if racial discrimination didn’t have this effect in the Jim Crow South, why didn’t it? I can imagine many factors depressing white wages—legal impediments to labor unions, etc.—but I don’t understand why racial privileges for white workers didn’t push a bit in the opposite direction. My possibly unreliable memory of the early economic literature on racial discrimination makes me think that racism did drive up labor costs for some employers. In theory, as I understand it, some but not all employers would benefit from restricting black workers’ access to higher-paid sectors of the labor market; if so, depressing black wages by limiting the possibility of wage competition benefited employers who used that cheaper black labor, but what was in it for a mill or mine owner, rather than for someone hiring people to chop cotton? Suppose the opposite was true, that rather than keeping all wages low, white wages were to some degree driven up by racist exclusion of black competitors, in absolute as well as in relative terms. If that happened, to any degree, we’d want to understand why white employers pursued a policy contrary to their own economic interests. One possible explanation would be fear of white working-class retaliation; another might be employers’ sincere racist solidarity with white workers. A comparison would be with Australia until the 1970s, when the exclusion of immigrants on racial grounds was a demand of the unionized working class, which feared wage competition, whereas more immigration was favored by many employers, because it would lower wage costs. The white Australia policy was nevertheless supported, if weakly, by other employers, on the grounds of racial solidarity. Another comparison would be the effect of the American Medical Association on physicians’ incomes. When the AMA attained the power to license medical schools, it restricted the output of physicians, and drove up incomes, a process that was reversed only when the Federal government began increasing the number of physicians by expanding output. The first medical schools to be closed down after the AMA gained control of the licensing of medical schools were the ones training black physicians, and women. In the long run, racial and sexual prejudice are very bad economic practice, but I am not sure that in every case they are bad economic strategy in the near term for the direct beneficiaries. One other point: When Josh writes that “it is hard to say what most working-class whites got from Jim Crow other than the satisfaction that they weren’t black,” he seems to be implying that white workers made a foolish as well as a vicious bargain, and were in some sense deceived about the economic consequences of the old racial hierarchy. On that theory, people naturally prefer higher absolute incomes and equality of racial status to higher relative incomes and higher relative status. I think that most Americans nowadays do feel that way, at least about the wages of whiteness, but there is a lot of historical and contemporary evidence suggesting that people can value relative status very highly indeed and commit appalling cruelties to maintain those status differences. In the days of Jim Crow, America looked peculiar (in comparison to other industrialized societies) because of the aberrant feature of de jure racism, which underpinned one such status hierarchy. Nowadays America looks peculiar because of the breadth and depth of our social egalitarianism, i.e., the relative decline of status hierarchies privileging men, whites, the former patricians, the educated, or anybody. While there is a rise in income inequality in America, I do not think we are yet seeing any corresponding and proportionate rise in status inequality. We are rather seeing its accelerating disappearance. Martin Luther King’s is the most famous name associated with the successful political struggle to destroy one very toxic form of American status hierarchy, the hierarchy of race. He used to be famous for being martyred. Increasingly he is famous for having won. Editor’s note: This blog item was submitted at 4 p.m., Sunday, January 14, and its posting was delayed because of technical difficulties at the site. Those difficulties have now been resolved.
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