Did Racially Motivated Labor Policy Reverse Equality Gains for Everyone?

Erin Wolcott

No 90, Opportunity and Inclusive Growth Institute Working Papers from Federal Reserve Bank of Minneapolis

Abstract: Labor protection policies in the 1950s and 1960s helped many low- and middle-wage white workers in the United States achieve the American Dream. This coincided with historically low levels of inequality across income deciles. After the Civil Rights Act of 1964, policies that had previously helped build the white middle class reversed, especially in states with a larger Black population. Calibrating a labor search model to match minimum wages, unemployment benefits, and bargaining power before and after the Civil Rights Act, I find declining labor protections explain half of the rise in 90/10 wage inequality since the 1960s.

Keywords: Minimum wage; Labor protections; Unemployment insurance; Wage inequality; Unions; Segregation; Worker bargaining power (search for similar items in EconPapers)
JEL-codes: E24 J30 J64 J78 (search for similar items in EconPapers)
Date: 2024-05-16
New Economics Papers: this item is included in nep-dem, nep-dge and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmoi:98574

DOI: 10.21034/iwp.90

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