Earnings, Productivity, and Changes in Employment Discrimination during the 1960's: Additional Evidence
A recent article in this Review by Joan Haworth, James Gwartney, and Charles Haworth (hereafter H-G-H) presented some significant findings on the source and structure of improvements in the relative economic status of nonwhite males during the 1960's. Specifically, H-G-H concluded that approximately one-half of the increase in the nonwhite/white earnings ratio (NWER) during the 1960's was simply . . attributable to the exiting of older nonwhite workers with low relative earnings combined with the entry of younger, better-prepared nonwhites who have high relative earnings' (p. 167). The balance of the gain in relative nonwhite earnings was the result of a decline in employment discrimination against nonwhites and improvements in the relative productivity of nonwhites. If correct, these findings have several important implications for the prospect of black and white earnings equality. First, they suggest that the effects of past discriminatory practices in both employment and the acquisition of human capital continue to reduce the earnings power of older black males still in the labor force. These past practices are an important source of current differences in the average earnings of blacks and whites in aggregate. Hence, they constrain the success of policies to achieve racial earnings equality. This brief note presents some additional evidence consistent with the H-G-H conclusions. We are mainly concerned with their data in Table 3 (p. 164) on changes in the NWER within age cohorts between 1959 and 1969. The H-G-H hypothetical identical productivity' ' NWER measures the nonwhite-white earnings gap caused by factors other than measured productivity variables, such as racial differences in occupational structure which are unrelated to productivity differences. Since the relative occupational distributions indirectly revealed by these hypothetical NWER underlie some of the major H-G-H conclusions, a more direct examination of changes in the occupational distribution of blacks and whites during the 1960's may prove a useful check on their findings. A group's index of occupational status can be calculated by weighting the proportion of the group employed in an occupation by the mean earnings for the occupation and summing across major occupational categories.' The higher (lower) a group's index, the greater the proportion of the group in higher (lower) paying occupations. Therefore, the ratio of nonwhite to white occupational status (NWOS) will measure solely racial differences in the distribution of workers among occupations. The higher (lower) the NWOS, the more (less) favorable the occupational structure of blacks relative to whites, ceteris paribus. Estimates of the male NWOS for age cohorts in 1959 and 1969 are presented in Table 1, along with the corresponding NWER.2 In aggregate, the NWOS increased by 10.2 percent during the
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