Facts of life in US labour market
Photo: Gordon Parks
Dottie Thomas lives in Boston, Massachusetts. In her thirties, Dottie, who is black, supports her five children with welfare payments. She has worked at several low-wage retail and service jobs in the past but has found the low wages, poor benefits and job insecurity too frustrating. She has applied for the federal government’s public service job program but there have been no openings. She has looked for work in the private sector but has not been able to find another job.
Dottie is one of hundreds of thousands of Americans who make up what is called ‘the secondary labour market’, that group of unskilled, largely minority, workers who are the preserve of casual labour in the US. Sometimes surviving on government welfare or unemployment payments, sometimes working at low-skill, dead-end jobs, these people are caught in a revolving door’ with little opportunity for advancement. Their position is marginal. Whether working in a small, non-union factory or in an unskilled service job, these workers always face the immediate possibility of replacement, and loss of job. Then they may be forced to live on welfare until they can find work. Unskilled and poorly educated, the members of the secondary labour market climb a different employment ladder than do most workers in the American labour force. They are the reserve army of the unemployed, underemployed and working poor.
This army, which has an extremely high representation of blacks and other minorities, is large and is growing. In 1954 black youth employment was at 17 per cent, only a little higher than the white youth unemployment rate of 13 per cent. But while white youth unemployment has maintained its 1954 level, unemployment among black and minority youth has soared to 36 per cent.
Moreover, although white workers have recovered from the effects of the 1975 recession, black workers have not. Between 1975 and 1977, white unemployment declined by 16 per cent. In those same two years, unemployment among black workers rose two per cent. The strongest recovery among blacks was made by adult male workers, but even they showed significantly slower recovery than did adult white men.
As white women and teens become more active in the labour market, the result is a deepening employment crisis in the black community. The number of jobs available increases every month; but the new opportunities are not benefitting the unemployed minorities. And the only conclusion to draw is, as Robert Hill notes in his article, ‘The Illusion of Black Progress’, that the presistently high level of unemployment among blacks is primarily due to the unavailability of jobs to blacks rather than their unsuitability for those jobs. The problem is a combination of racial discrimination, depressed economy and ineffective targetting of jobs to the black community.
The federal government has tried to address this problem of structural unemployment through the Comprehensive Employment and Training Act (CETA), which has provided up to 725,000 public service jobs in the past. Federal youth programs under CETA have accounted for most of the 56,000 person increase among employed black teens in the past year; but at the same time, at least 400,000 minority teenagers remain unemployed. 725,000 jobs are better than none, but CETA as it is funded, can never be a comprehensive program, In Detroit, Michigan, for example, there are over 113,000 adults who are considered economically disadvantaged and therefore eligible for a public service job under CETA. But CETA money in Detroit funds only 3,500 jobs, enough to employ fewer than four per cent of the city’s need.
Congress decided last year to shift the focus away from government jobs and toward the private sector. Arguing that four out of every five new jobs are created in the private sector, Congress established new guidelines and programs (including tax credits to private-sector employers who hire the economically disadvantaged) that are meant to involve business and industry in creating new jobs, training the unskilled hardcore unemployed and attacking the problem of structural unemployment.
The secondary labour market however, cannot simply be legislated out of existence. It is certainly difficult to convince the people who have been through ‘the revolving door’ that the private sector will begin to provide new jobs, let alone jobs with good wages, benefits and job security. And the existence of a reserve of unskilled labour serves an important function in the economy, keeping wages down for other workers and providing some employers with the labour flexibility they need to expand capacity when necessary.