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Technologically-Driven Unemployment in Black America

Adam Rust's picture

Posted May 11, 2011

In the last half-century in the US, the rise and fall of African-American households have been acutely impacted by the interaction between technology and geography. Going back to WWII, many Southern African-Americans worked in conditions that were only a few steps above the post-reconstruction era. The fist of Jim Crow remained firm. Sharecropping, where the landowner took 40 cents of revenue and even more after collecting on store credit, impoverished these families.

An economy suffers from structural unemployment when there is a mismatch between the available jobs and the supply

of workers with the skills suitable to fill those positions. Technological change contributes to structural unemployment. As jobs get more complicated, employers either seek out workers with more skills, or they look for solutions through more mechanization.

Technology helped to drive part of the change that broke Jim Crow. The arrival of the mechanical cotton picker in the 1940s (not the cotton gin) meant that one machine could do the work formerly done by 20 workers. The sudden dearth of work led to the Great Migration. Waves of African-American workers and their families moved from the South to the industrialized cities in the North, seeking opportunities to work in factories.  This is the way that economists say things are supposed to work - a new efficiency (mechanization) creates growth, which then offers new opportunity.

Industrialization changed that experience from in the 60s. With a gradual re-orientation of the landscape around the convenience of freeways, new factories were located not in the inner city, but instead on the outskirts. Speaking generally, the suburbs had easier transportation, more raw land, and competitive taxation. It is easier to load a truck in Olathe than in the Paseo (Kansas City), in Des Plaines rather than in the Loop (Chicago), or anywhere else. Thus, in the early 50s, the Big Three automakers built 25 new plants in the Detroit suburbs. Ford drew down production at its River Rouge Plant at the same time, even though it had plenty of space for expansion.

The loss of jobs in the inner city inspired William Julius Wilson's dystopian notion of chronic unemployment in minority neighborhoods. ( see "When Work Disappears: The World of the New Urban Poor").

The knockout blow to the African-American middle class in my community (Durham, North Carolina) was the urban renewal movement of the early 1970s. The NC Department of Transportation built a new regional highway through the leading African-American neighborhood ("Hayti") and never looked back. Forty years later, we are still trying to find a way to patch the scar left on the immediate area.

This is a story told over and over again. The loss of that wealth creates a perpetual cycle of impoverishment.

Oddly, the ultimate destination for the children of these workers was government. By the 1970s, more than half of all college-educated African-Americans worked in the public sector. This is one more thing that makes this recession particularly hard upon Black America. Even as more jobs are being created, government employment is actually dropping.

David Brooks says that structural unemployment explains all kinds of other social problems in today's newspaper. In particular, he says that men without college degrees are being phased out of the workforce. This means that fewer of them will ever be able to support families. But it would be a mistake to say that it only men that affected by structural unemployment. Black men have it the worst of all. Today, while the national unemployment rate is about 9 percent, it is 16 percent for African-Americans and 17 percent for African-American men.

It is also a generational problem. The unemployment rate gets higher as workers get younger. Almost everyone over 65 that wants a job can get one. Unemployment was just 6.5 percent in that group according to a May BLS report. For workers aged 25-34, the rate is approximately 10 percent. That is a problem that will have a lasting imprint. When people have gaps on their resumes, their skills deteriorate and employers begin to take a new level of skepticism at their resume.

The upshot is there will be long-term challenges to getting people working even when our country pulls out of this recession, and the tough times will be borne most painfully by black America. But there is hope. If the economy ceases to produce as many jobs for workers without college degrees, then it begs the question of how to retrain people.