How the Disappearance of Unionized Jobs Obliterated an Emergent Black Middle Class

William Lazonick (), Philip Moss and Joshua Weitz
Additional contact information
William Lazonick: Academic-Industry Research Network
Philip Moss: Academic-Industry Research Network
Joshua Weitz: Academic-Industry Research Network

No inetwp125, Working Papers Series from Institute for New Economic Thinking

Abstract: In this introduction to our project, `Fifty Years After: Black Employment in the United States Under the Equal Employment Opportunity Commission,' we outline the socioeconomic forces behind the promising rise and disastrous fall of an African American blue-collar middle class. During the 1960s and 1970s, blacks with no more than high-school educations gained significant access to well-paid unionized employment opportunities, epitomized by semi-skilled operative jobs in the automobile industry, to which they previously had limited access. Anti-discrimination laws under Title VII of the 1964 Civil Rights Act with oversight by the Equal Employment Opportunity Commission supported this upward mobility for blacks in the context of a growing demand for blue-collar labor. From the late 1970s, however, the impact of global competition and the offshoring of manufacturing combined with the financialization of the corporation to decimate these stable and well-paid blue-collar jobs. Under the seniority provisions of the now beleaguered industrial unions, blacks tended to be last hired and first fired. As U.S.-based blue-collar jobs were permanently lost, U.S. business corporations and government agencies failed to make sufficient investments in the education and skills of the U.S. labor force to usher in a new era of upward socioeconomic mobility. This organizational failure left blacks most vulnerable to downward mobility. Instead of retaining corporate profits and reinvesting in the productive capabilities of employees, major business corporations became increasingly focused on downsizing their labor forces and distributing profits to shareholders in the form of cash dividends and stock buybacks. Legitimizing massive distributions to shareholders was the flawed and pernicious ideology that a company should be run to maximize shareholder value. As the U.S. economy transitioned from the Old Economy business model, characterized by a career with one company, to the New Economy business model, characterized by interfirm labor mobility, advanced education and social networks became increasingly important for building careers in well-paid white-collar occupations. Along with non-white Hispanics, blacks found themselves at a distinct disadvantage relative to whites and Asians in accessing these New Economy middle-class employment also extend to devastating loss of well-paid and stable employment for whites who lacked the

Keywords: African American; employment relations; equal employment opportunity; unions; blue-collar; socioeconomic mobility; corporate governance; shareholder value; retain-and reinvest; downsize-and-distribute; discrimination; economic inequality (search for similar items in EconPapers)
JEL-codes: D2 D3 G3 J0 L2 L6 N8 O3 P1 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2020-06-15
New Economics Papers: this item is included in nep-his and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:inetwp125

DOI: 10.36687/inetwp125

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