Detroit Divided

3. The Evolution of Detroit's Labor Market Since 1940

3 The Evolution of Detroit's Labor Market Since 1940 IN I940, the Ford Motor Company employed 85,000 workers at its Detroit-area factories, 21 percent of them African Americans. More than half of all employed black men in metropolitan Detroit at that time drew their paychecks from Ford (Maloney and Whatley 1995,470). Ford, however, was the exception. The Hudson Motor Car Company, with a payroll of 12,200, had just 225 black workers (Thomas 1992, 157). African Americans accounted for 9 percent of the city's population, but just 1 percent of the labor force of 30,300 employed by the municipal government (Sugrue 1996, 110). Jim Crow practices accounted for the unusual representation of blacks on some payrolls but their absence from others. Black men held jobs at Ford not because they lived close to Ford plants or because their skills were especially suited to Ford's needs but because they were permitted to work there. Indeed, according to Thomas Maloney and Warren Whatley (1995), virtually the only Detroit African American men who earned enough to support their families at the start of World War II were those who worked at Ford plants. (For more about which firms did or did not hire blacks, see Weaver 1946, chap. 5; Bailer 1943.) There were many favorable changes in Detroit's labor market in the subsequent three decades. Thanks to federal pressures, the insistence of the UAW, a World War II labor shortage, and a sustained push for opportunities by black leaders, jobs opened up during the 1940s. By the 1950s, employed adult black men in the metropolis who worked in the previous year reported median earnings of $19,095, or 81 percent as much as the $23,115 reported by white men. (Amounts are shown in 1997 dollars and refer to men age twenty-five to sixty-four.) The racial gap in earnings was smaller than in most other metropolitan areas, since there were few cities in which black men got so many good blue-collar jobs. After the early 1970s, developments in Detroit's labor market were more often negative than positive, especially for less-educated workers. Indeed, the most popular explanation for the emergence of the black 53 DETROIT DIVIDED urban underclass, that of William Wilson (1987 and 1996), suggests that the decreasing demand for the labor of African American men, especially blacks who lacked college training, meant that black men could no longer count on stable blue-collar jobs in the factories of Chicago, Detroit, and Cleveland. Technological changes, the globalization of markets and production, and the push for greater labor productivity left many less-educated workers with dim labor market prospects (Kasarda 1985, 1993, and 1995). Nonetheless, an African American economic elite has emerged in Detroit the last forty years. By 1990, about 12 percent of blacks were in households whose incomes exceeded five times the poverty line (see figure 2.5). Only 1 percent was that affluent forty years earlier. But poverty among blacks was just about as prevalent in 1990 as in 1950. On all economic measures, the gap between the typical white man and the typical black man was just as large-sometimes larger-in the 1990s as in the 1950s. In 1990, employed black men in metropolitan Detroit reported median annual earnings of $32,250, or just 71 percent of the white median of $45,150. And there was an important shift reflecting the changing labor market. Only 4 percent of adult black men reported not having worked at all in 1949, but for 1989, that figure was 28 percent . Among white men, the change was more modest: from 6 to 9 percent . Key aspects of labor market trends, along with their implications for racial differences, are described in this chapter. • Job growth in the metropolis • Changes over time in the goods and services produced by Detroit's employers • Where jobs are located • Occupational changes • Employment trends by race and gender • Occupational achievement by race and gender • Earnings trends by race and gender Employment Growth: Did Jobs Disappear? Detroit, to many, symbolizes a declining Rust Belt, implying a disappearance of jobs and declining employment opportunities for all who live there. Presumably, young people frequently move away from Rust 54 THE EVOLUTION OF DETROIT'S LABOR MARKET SINCE 1940 TABLE 3.1 Number of Persons Holding Tabs in Metropolitan Detroit, 1940 to 1998 Change over the Decade Percentage...