As the United States grapples with conversations around race and COVID-19, Gbenga Ajilore, a senior economist at the Center for American Progress, joins GJIA to discuss how these issues manifest in the U.S. labor market. In this interview, he explains structural racism in employment and opportunities to address it, the pandemic’s effect on minorities, and other international labor systems’ responses to the crisis.
GJIA: Let’s start off with the big picture. Where does structural racism occur in the context of employment and the labor market, and how does this affect minorities?
GA: It would help to start off with the definition of structural racism, which I think of as structures put in place that create unequal outcomes for different groups. In the case of racism, it is by race, but it can be by gender, disability status, LGBTQ status, etc. In the labor market, a firm that needs to hire someone can release a job announcement, list requirements, receive applications, conduct interviews, and make a job offer. These are all places where structural racism can occur.
For one, a firm does not have to put out an announcement; they can rely on their networks, like the people they went to college with. If you are not part of these networks, you are not able to get a job. If they release an announcement, they can put in requirements like having a Bachelor of Arts or three years of experience. That can also create structural racism: who goes to college and to which college? A lot of times experience comes from internships, many of which are unpaid. Who is able to take on unpaid internships? Academic research shows that if you have a black-sounding name, you are less likely to get a callback given the same resume. During the interview process, people ask questions to determine your fit and cultural competency. There are certain things that, if you are in a certain part of society, you would get. So you may answer questions “wrong,” and someone may interpret that the interview is not going well. Once you get a job offer, what are you being offered? Do you negotiate for a higher salary? People say there is a gender gap because women do not ask for much or people of color do not negotiate well. Studies show that women may be selective about when they negotiate for higher pay, since it might affect how they are perceived in the workplace. All these factors can affect people’s ability to obtain jobs and the right level of earnings.
How do incarceration records in particular influence employment outcomes, and how can employment reports incorporate this structural factor?
People look at incarceration records and think, “this tells me all I need to know about you.” So the question is, why is someone incarcerated? You think about how structural racism and policing are connected, like who gets policed, how they get policed, and what is considered a felony versus a misdemeanor. There are examples of people who have gone to jail because they had a speeding ticket. What happens if they cannot pay the speeding ticket? Then they have fines, and that is punishable by jail time. This builds up, and now they have a record because they have been through the criminal justice system, just because they did not have the money to pay off a speeding ticket. You think about media portrayals of people in jail like thugs, criminals, and violent offenders. But a majority of the people who have been through the criminal justice system are not in for actual violent crimes. Even further, what is determined to be violent? Is it actually engaging in violent behavior? No. An individual may be convicted of a felony for violent crime without actually engaging in any violence.
Employment statistics include a measurement called non-institutionalized labor force, so people who are part of an institution are not counted in it. But we can actually include statistics on who is part of institutions in the labor force, which would show even greater differences in labor force outcomes, but we do not do that.
You point out that during recessions, racial groups that face discrimination are usually the first to become unemployed. How has this pattern changed or persisted during the coronavirus pandemic?
One thing I look at is the ratio between the Black unemployment rate and the white unemployment rate, which has always been about double. While the overall unemployment rate did not skyrocket until April, there were hints of higher unemployment in March where the African American unemployment rate jumped at a higher rate than for whites. In April, [the ratio] narrowed to about 1.2, and the reason why is that there were jobs that were considered “essential” in grocery stores, public transit, and so on. Some of these are low-earning occupations that are held primarily by people of color, like Black men and women. Because they were essential workers, they kept their jobs. So while their unemployment rate jumped up, it did not jump up like it would in previous recessions. But in May and June, there were net job gains, and the ratio started to increase from 1.2 to 1.35 (in May) to 1.5 (in June), so we see that gap open up again.
In an NPR interview, you discussed how African American women in the health sector gained jobs in July. This seems to be an encouraging sign for the African American women population, but do you see this trend growing in the future?
No. The jobs report conducts a survey for both employers and households in the reference week of that month. So the numbers we received from last month predate the recent spikes that we have seen in coronavirus cases over the last two weeks. When there are spikes, it decreases economic activity. Any gains that we had have probably gone away already, and we are going to see that in the next jobs report.
What it speaks to is that if we want to tackle systemic racism, sexism, and structural barriers, we need intentional policies. We cannot let the labor market [operate] on its own and say “the market will work things out:” there are structural barriers in place which create these unequal outcomes.
To address structural inequality in employment, you cite a Center for American Progress report saying that equity initiatives in the workforce, including job training programs that connect participants to high-quality jobs, can be effective. What’s missing from current job training programs that prevent minorities from obtaining better jobs?
The biggest thing missing from these job training programs is any sort of evaluation or accountability measures. Current job training programs just give you skills and think you will do well; you then have to go out on your own and find a job. A job training program that incorporates equity initiatives would have participants complete the training, but it is not considered complete until employment is obtained. There is a disconnect between current programs and actual employment outcomes. If this job training program works, did everyone get a job? Are those jobs actually careers with benefits and good earnings that create a path for higher earnings and for more stability? Current job training programs do not do that.
Can you talk about why the employment to population ratio (EPOP) is an important economic indicator, and to what extent has Chinese imports and automation affected it?
The EPOP tells you the share of the population that has a job, which takes incarceration rates into account. I noticed in this pandemic that the EPOP ratio for the African American population is below fifty percent, which means that less than half of the African American population has a job. That is shocking, and it should be higher. When the economy is good, [this ratio] is usually up to seventy percent.
Chinese imports and automation are very complex topics. They are factors, but not the only ones. One of the problems I have with discussions about these topics is that they get painted in xenophobia and concerns that “robots are going to take our jobs,” while shifting the focus away from systemic racism and sexism. Technological advancement can be a good thing. For instance, how many people grew up with a milkman? There used to be jobs to deliver milk, but the invention of the refrigerator killed that industry. Do we want to go back to a time where people deliver milk so we can keep those jobs? No, refrigerators and technology are great. What we have to look at when technology advances is: “what are the new jobs?” Gig work like Uber and Lyft did not really exist fifteen years ago to the extent that they do now. If you told someone fifteen years ago that you were going to use your phone to call some random person to give you a ride, people would say, “that is crazy.” But we all use it now, and that is normal. However, these are not quality jobs. Instead of saying that we need to get rid of these companies, we should create a framework that provides a minimum level of standards like worker protection, benefits, and earnings. These protections are a way of removing structural barriers to allow people to have economic and social mobility.
Do you see the United States fitting into a larger international trend of employment inequity or is it more of an anomaly?
I think the United States is more of an anomaly. I know there are stronger labor and worker protections in a number of countries, especially in the European Union, and the pandemic has shown that. For instance, Denmark, Australia, and Germany were able to lock down their economies. To make sure that the people kept their jobs, they have wage subsidies programs that provide sixty percent of the unearned wages so firms do not have to lay people off. Firms could furlough workers for two months, but they will still be able to maintain the payroll. Once it is over, people are able to get back to their jobs. It is nice not just because it keeps people paid, but it also keeps people attached to the labor market and, more specifically, to their firms. What is happening now in the United States and what is going to continue to happen is that some of these temporary job losses are going to become permanent. When people go back to the labor market, they have to find a new job. On the other hand, employers have to find new workers. All the on-the-job training that occurred before the pandemic has to be done again, as opposed to other countries where people go back to the job they had. They avoid the learning curve, become more productive and efficient, and companies can keep running as smoothly as possible.
Do you think the United States could implement a worker protection system like the one that the European Union has?
One of the problems in the United States is the mentality that profit-driven corporations reign supreme, and worker protections and labor market standards will lower profit because more needs to be paid in terms of worker benefits. But such a mentality makes the economy less resilient to external shocks, like the one that we are experiencing. We have had this mentality for hundreds of years, and it is influenced by the media and how we lionize the “titans” of industry. It is hard to push past that mentality to show why worker protection is important. If we are going to implement a system like the one that the European Union has, it is going to be because of how tough this pandemic has been. We have to make the argument that putting these protections builds a resilient economy so that when we are hit with a recession or a pandemic, we are able to weather it and come back out stronger, but we are not going to be able to do that now.
Anything else you would like to share?
What we are going through is, first and foremost, a public health crisis. Until we tackle it, nothing else matters. That is something that seems to be getting lost, especially over the last two months, in these discussions about the economy. Let’s fix the public health crisis and then worry about the economy. If we forget about the public health crisis, the economy will never recover because people are dying. People are talking about how unemployment insurance is making people not want to work. No, COVID-19 is making people not want to work because they do not want to die. We cannot just wait for a vaccine because that is not going to work. It has not worked for the three million infected people, and it has not worked for the 130,000 people who have died. There are things we can do to minimize this, and that is the key.
This transcript has been lightly edited for clarity and length.
. . . Dr. Olugbenga Ajilore is a senior economist at the Center for American Progress and a Visiting Fellow at the Urban Institute. His expertise includes regional economic development, macroeconomic policy, and issues in diversity and inclusion. Having served as president of the National Economic Association, Dr. Ajilore has been invited to testify in front of Congress. He has been featured in The New York Times and The Washington Post and has published in numerous journals such as the Atlantic Economic Journal.
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