*Sharing the Prize*

by on February 12, 2013 at 7:17 am in Books, History, Law | Permalink

That is the new and much awaited book by Gavin Wright, with the subtitle The Economics of the Civil Rights Revolution in the American South.  Here is one small bit, reflecting some of the book’s main themes:

By the 1930s, labor markets in the South had come to display a distinct “racial wage gap,” supported by systems of vertical workplace segregation.  Not only were job categories classified by race, but black wage rates typically peaked about where white pay grades began.  These structures persisted through World War II and the 1950s, showing few signs of softening even in the presence of rapid urbanization and industrial employment growth.

Here are some related powerpoints by Wright (pdf).  Here is the book’s home page.

Bill February 12, 2013 at 9:34 am

Does the current illegal immigration labor market reveal a similar “wage gap’? I assume it does but am interested to know.

If immigration reform involves a path to citizenship dependent upon continued employment up to the time of citizenship, with no or little time for job search if the immigrant is laid off, will this create a wage gap in that the immigrant will have to take the first, though not best, offer? (Much like vagrancy laws in the South were used in the past). Does it shift bargaining power between the employer and employee, even for those who are not immigrants?

Do we have similar wage gaps for green card entrants who must maintain active employment or sponsorship to maintain residency?

C February 12, 2013 at 2:50 pm
maharbbal February 13, 2013 at 11:55 am

I was very bothered by the conclusion offered by Gavin Wright at the end of his presentation (and I assume his book). In effect, the historical argument is that segregation had a nefarious effect not only on the economic position of the Afro-American population in the South but also on the region as a whole due to limited labour supply and limited consumption. The quantitative evidence leaves no place to doubt: the end of segregation had a positive impact on the Southern economy in general and even on most of the sectors and individuals who feared it the most (notably retail and the textile manufacturing industry).

The conclusion that Gavin Wright derives from this (compelling) exposé is that federal intervention in the economy is not necessarily detrimental. It can be “market-enhancing” and, one is led to assume, should be supported on economic grounds.

It took me a while to spot the issue with this reasoning but I believe it lies in a subtle drift of the argument behind the 1950s Civil Right legislation. As far as I know and as far as the presentation goes (may not apply to the book) the aim of the federal government was social, political, moral even, but not economic. Eisenhower and Johnson did not sign in the Civil Right project to help develop the South. It so happens that the consequence of this legislative evolution were positive but this was not the aim of the US government.

In fact, it is quite amusing to realize that one of the few national policies to have a positive effect on the development of a region was not destined to do so. This stands in sharp contrast with the utter failure of other grand development policies by governments around the world, from Italy’s Mezzogiorno to the US’s own Rust Belt.

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