Affirmative Action: Overcoming Disparities Yields Economic Benefits

Affirmative Action: Overcoming Disparities Yields Economic Benefits

By Amy Wood

Vol. 20, No. 1, 1998 pp. 12-15

Opponents like to argue that affirmative action divides; the reality is that the failure to overcome persistent inequality divides Americans. Affirmative action is necessary to ensure equal opportunity and racial, gender, and ethnic diversity in our country’s workplaces and schools, not only to compensate for past discrimination, but to remedy the economic inequalities that persist today, largely because of past injustices. Racial and gender disparities in income levels, material wealth, and professional and educational opportunities continue despite progress. Evidence shows that where affirmative action has been applied, it has been beneficial.

Before looking at the benefits of affirmative action, it is useful to see the income and educational disparities between white males and the groups targeted by affirmative action.

Income Levels

Recent figures on income levels illustrate persistent inequalities between employed white Americans and employed people of color.

1995 Per Capita Income Levels

White: $18,304
Black: $10,982 60%
Hispanic: $9,300 50%

Source: U.S. Census Bureau, June, 1997

  • College-educated black men make 73 percent of what college-educated white men make.
  • College-educated black women make 98 percent of what college-educated white women make.
  • The median year round income for full time male workers in 1995 was $31,496. Female workers average $22,497

1996 Household Income Levels

White Families: $44,756
Black Families: $26,522 59%
White families w/2 married wage-earners $58,995
Balck families w/2 married wage-earners $50,806 86%

Source: U.S. Census Bureau, June, 1997

In her 1997 book, In Defense of Affirmative Action, Barbara Bergmann has calculated the wage gaps between minorities and whites so as to take account of income disparities that may exist because of differences in education levels, experience, and geography. She uses figures from the U.S Census Bureau, as well as National Longitudinal Survey of Youth (for workers between 26-33; this survey also measures cognitive ability) to come up with a “residual gap” of the amount of wages lost due to discriminatory factors.

Income Gap Based on Census Data (ages 18-65) Income Gap Based on NLSY Data (ages 26-33)
Black Men $4,145 $1,522
Black Women $7,294 $3,393
White Women $6,903 $3,539

Source: Bergmann, In Defense of Affirmative Action

Professional Disparities

Women and people of color comprise 57 percent of workers; this figure will rise to 62 percent by the year 2005. Yet, women and minorities are under-represented in managerial, professional, and administrative jobs. White

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men are over-represented in these higher-paying and higher-status jobs.

  • 97 percent of senior managers of Fortune 1000 industrial and Fortune 500 companies are white; 95 percent to 97 percent are men.

The Department of Labor’s 1995 Glass Ceiling Report also found that “equal educational attainment does not level the playing field for Black men and women . . . . White men are over-represented in top positions regardless of educational level . . . . White men have 68 percent more of the executive, administrative, and managerial positions than should be expected at this educational level – all things being equal.”

Percentage of Women and Minorities in Professions

Women African American Latino
Doctors 26.4% 4.5% 5.1%
Lawyers 29.5% 3.5% 2.8%
Professors 43.5% 6.5% 4.1%
Architects 16.7% 2.7% 4.3%
Scientists 29.3% 3.3% 1.9%
Engineers 8.5% 4.2% 3.8%
% of pop. 51.3% 12.1% 9.0%

Source: U.S. Department of Labor, 1996

Educational Disparities

In proportion to their representation in the population, people of color are underrepresented in higher education as well. As the decline in enrollment in Texas and University of California law schools post-Hopwood, and post-Proposition 209, respectively, demonstrate, affirmative action is responsible for the levels even being what they are.

Education attainment levels in U.S.

4 years of high school or more 4 years of college or more
White 83% 24%
Black 73.8% 13.2%
Hispanic 53.4% 9.3%

Source: U.S. Census Bureau, June 1997

  • African Americans make up 9.9% of enrollment in all two-year or four-year undergraduate institutions – out of a total of 12 million students.
  • 39,754 Doctoral Degrees were awarded in 1993: African Americans received 1,106 (2.8%); Latinos received 834 (2.1%).
  • 6,496 Doctoral Degrees in the physical sciences were awarded in 1993. Forty-one went to African Americans (0.6%) and 89 to Latinos (2.1%)

Persistent Racism

Because so much dialogue concerning affirmative action focuses on the need to rectify past discrimination, we often forget that discrimination is not entirely a thing of the past. Opponents of affirmative action argue that affirmative action has done its work, or that the present generation should not have to pay for the sins of the past. We need to remind folks that racism persists – and several academic studies exist that demonstrate the advantages white men still enjoy when applying for jobs or college admittance.

For example, a report entitled Affirmative Action Review: A Report to the President found that when pairs of equally qualified black and white testers applied for the same job, the white tester was either hired or advanced further in the hiring process while the black tester was turned away.

An audit by the General Accounting Office (GAO) found discrimination against Hispanic job seekers as well. Hispanic testers received 25 percent fewer job interviews and 34 percent fewer job offers than other testers.

Hiring Increases in Monitored Workplaces

It is clear from the anecdotal and empirical evidence that gross gender, racial, and ethnic inequities still persist. In order to more effectively argue for affirmative action, its proponents need to show that affirmative action has indeed worked to ameliorate these injustices.

In Not All Black and White, Christopher Edley notes that in compiling the Affirmative Action Report to the President, he and his colleagues were surprised to find that little work had been done to prove statistically the effectiveness of affirmative action. Most studies that exist compare private sector firms who are not obligated by federally-mandated affirmative action programs, and public-contracting firms that are under Executive Order 11246. These reports show that affirmative action has made a difference in minority employment levels.

Since affirmative action has been in place, federal contractors and agencies now hire many more minorities and women. Federal Contractors that underwent a Office of Federal Contract Compliance Program (OFCCP) review in the 1970’s subsequently hired more women and minorities at a quicker rate than contractors that did not undergo review, suggesting that government enforcement or checks on affirmative action does play a signi-

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ficant role in minority and female advancement . In other words, if the government did not intervene, we can assume that these minorities and women would not have been hired.

Opponents of affirmative action argue that contracting firms suffer lower productivity and efficiency due to OFCCP regulations. However, one study actually reveals that affirmative action has had no such effect on contracting firms.

Because OFCCP enforcement of affirmative action was significantly reduced in the 1980s, it is suggested that the OFCCP did not have as great an impact on minority-hiring in contracting firms.

The Los Angeles Times, reporting the results of their 1995 study of affirmative action, similarly asserted that “blacks . . . . have made disproportionate gains in public and private-sector jobs subject to affirmative action monitoring by the federal government.” Latino and Asian employment rates, on the other hand, are the same in both the overall work force and in government regulated jobs.

Detractors argue that the increases in minority and female employment are due to changes in social attitudes and conditions prompted by the Civil Rights Movement and the Women’s Movement rather than the “artificial” controls exerted by the government. They use this argument to claim that the anti-discrimination laws enacted in the wake of these movements makes affirmative action unnecessary.

Edley concedes that it is increasingly difficult to distinguish between progress due to anti-discrimination laws which apply to all employers and affirmative action programs that apply to federal contractors. The line between anti-discrimination policies and affirmative action policies, he recognizes, is slippery. But, he believes, as do most Civil Rights liberals, that the two policies are deeply wedded together. We can not truly enforce and achieve non-discrimination without some form of affirmative action.

Who Has Benefited?

Studies also show that since the implementation of affirmative action, the number of minorities and women represented in higher education and in skilled or administrative jobs has increased significantly. Subsequently, income gaps between minorities and whites, and between men and women have been reduced. These studies are used as verification that affirmative action has indeed worked.

These figures on income levels are provided by Bergmann:

  • In 1967, black men’s wages were 69 percent of white men’s. In 1976, they had risen to 79 percent of white men. Since then they have fallen, due in part to economic recession.

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  • Income levels for white women did not start to rise until the 1980s. In 1967, white women’s wages were 61 percent of white men’s. In 1995, they had reached 73 percent of white men’s.
  • According to the 1995 Los Angeles Times study, white women and black women have made the most gains. Affirmative action programs seemed to have the most impact on white women, whose representation in professional and administrative jobs nearly tripled between 1960 and 1990. Black women have also progressed at higher rates than black men.

    The Glass Ceiling Report supports these findings, especially in the success rates of white women compared to minority men and women. White women made most of their gains in the 1980s.

    Economic Costs and Benefits

    Opponents of affirmative action, including John Barry of the Florida Civil Rights Initiative, have stressed the economic costs of affirmative action, since, they contend, instituting these programs costs millions of dollars.

    But, according to the presidential Affirmative Action Review, “only 40 cents of every $1,000 in Federal educational assistance funding is devoted to” minority-targeted affirmative action programming. On the other side, proponents of affirmative action argue that affirmative action has economic benefits. It reduces poverty by eliminating racial discrimination in employment and education, thereby allowing African-American victims of poverty to advance. In other words, it contributes to the development of a black middle class. Minority set-asides in federal contracting, it is argued, promote minority entrepreneurship and contribute to the economic development of minority communities. Moreover, ensuring fair representation of minorities and women in the workplace will enhance business by widening the labor pool, and by making companies and firms more representative of their communities and, therefore, more effective.

    The Glass Ceiling Report, although it looks mostly at private corporations and does not directly address affirmative action, does provide some harder evidence to substantiate these arguments. The Commission stressed that increasing diversity in the workplace was “good for business,” because it not only widens the “pool of talent” businesses could draw from, but also because businesses realize they need to reflect the diversity of the marketplace and their customers. It reports that “a 1993 study of Standard and Poor 500 companies shows that firms that succeed in shattering their own glass ceilings racked up stock market records that were nearly two-and- a-half times better than otherwise comparable companies.”

    The Report also points out that minorities in the U.S., that is, Asians, Hispanics, and African Americans, represent more than $500 billion a year in consumer spending.

    Another aspect to the effect of minority and female advancement in the workplace is turnover rates. Because of the “Glass Ceiling” effect, between 1980 and 1987, turnover rates for women in professional jobs doubled that of men. For African Americans in the same period, the turnover rate was two-and-a-half times that of whites. The major reasons cited for the high turnover rate for women were a lack of career growth, progress, or opportunity. Lower turnover rates can mean big savings for companies – one study stated that lower turnover saved a pharmaceutical company $500,000 in one year.

    Affirmative action is a necessary and effective strategy to end racial and gender inequalities in this country. While moral and historical defenses of affirmative action are important, economic reasoning might be the most potent argument to win this battle. Opponents of affirmative action cannot ignore the economic disparities that exist in this country between races-racism and inequality are not specters from our past, but persist in the present day. Affirmative action not only compensates for historical injustice, but also aims to effect racial equity and justice in the present and future.

    Affirmative action is a social good for moral, psychological, and economic reasons.

    Amy Wood is a graduate student in the institute of Liberal Arts at Emory University.