The Declining Importance of Race and Gender in the Labor Market: The Role of Employment Discrimination Policies

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    The Declining Importance of Race and Gender in the Labor Market: The Role of Employment Discrimination Policies
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Title VII of the 1964 Civil Rights Act sought to promote equality of opportunity by making employment discrimination illegal. Over the five decades since passage of the act, federal policy has directed considerable resources to its implementation. Yet wage differentials still prevail among racial and ethnic groups and between women and men. Advocacy groups and the media frequently point to these statistical wage gaps as evidence of discrimination and the need for new and more stringent legislation.

However, as economists June and Dave O’Neill argue in The Declining Importance of Race and Gender in the Labor Market (AEI Press), conventional wisdom regarding the scope of employment discrimination is badly misguided. Through empirical analysis, the authors find that the wage gaps invoked to support new antidiscrimination policies can be largely attributed to differences in work-related skillsnot labor-market discrimination. Moreover, analysis of historical data reveals that race- and gender-based wage differentials have declined over the years, mainly due to the individual initiatives of women and minorities that increased their productivity and narrowed skill gaps. Notably, the black-white wage gap declined as much between 1940 and 1960a period with almost no federal antidiscrimination policiesas it did between 1960 and 1980, an era marked by the passage of the Civil Rights Act and the expansion of federal policies.

The O’Neills also examine the two federal agencies tasked with enforcing antidiscrimination policy, raising questions about the effectiveness of their policies, particularly those that equate lack of proportional representation of minorities and women in an employer’s work force with discrimination. The authors highlight the irony of these agencies: the implementation of racial and gender preferences in hiring and promotion were specifically prohibited by Title VII. A review of civil rights litigation suggests that the courts have followed a similar line of thought, although a few recent cases suggest some rethinking of these issues.

The Declining Importance of Race and Gender in the Labor Market provides historical background and solid empirical analysis of a highly important and emotionally charged issue. It should play an important role in deliberation over the future direction of civil rights policy.

Advance Praise:

"June and Dave O'Neill have written an important book on the history of racial and gender differences in jobs and pay, the legal efforts to reduce these gaps, and why the labor market gaps due to discrimination have greatly declined over time. Their conclusions about the ineffectiveness of various federal laws to reduce discrimination and on the decline in labor market discrimination will be controversial, but the authors back up their claims with detailed and thorough analysis. Required reading for anyone who wants to learn much more about the reasons behind the remaining earnings and employment gaps between men and women, and between African American and Hispanic men compared to white men."

--Gary S. Becker, University Professor of Economics and Sociology, University of Chicago; Recipient of the Nobel Prize in Economics, 1992

"June and Dave O'Neill have written the modern Bible on the role of race and gender in labor markets. Their historical narrative and their statistical evidence gives strong support to the conclusion that the greatest surge for the advancement of African-Africans and women in the labor markets occurred before the onset of the Civil Rights laws. The one finding, meticulously documented, calls into question the continued usefulness of an elaborate civil rights enforcement program that may well be highly counterproductive as this nation seeks to revive its lagging labor markets."

--Richard Epstein, Laurence A. Tisch Professor of Law, New York University

"Occasionally a book instantly alters the terms of debate. The Declining Importance of Race and Gender in the Labor Market should become one of them. Comprehensive, meticulously empirical and dispassionate, it brings together in one place all the many pieces of the puzzle. It will inevitably attract controversy because the issues themselves are so fraught with emotion. But when the reality that the O'Neills document -- a great American success story -- is eventually accepted (as it must be), we will be freed to concentrate on the real sources of the remaining disparities in the labor market. Ultimately, I hope this wonderful book helps us return to our ancient national aspiration: that we Americans are to treat all of our fellow citizens as individuals, not members of groups."

--Charles Murray,  W.H. Brady Scholar at AEI

June O'Neill is the Wollman Distinguished Professor of Economics at Baruch College, City University of New York (CUNY), and a professor at the CUNY Graduate Center. O'Neill is also an adjunct scholar at AEI.

Dave O'Neill is an adjunct professor at Baruch College, City University of New York, and is a research fellow of the Institute for the Study of Labor.

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