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Chapter 2 Losing Ground: The Erosion of the Relative Earnings of African American Women During the 1980s John Bound and Laura Dresser A reasonablY large literature examines the erosion of the relative wages of African American men and the increasing relative wages of white women during the 1980s, but the position of African American women in the labor market has received less attention. The historical importance of the contributions of African American women to family income and the increasing proportion of African American families that are headed by single women are just two reasons to develop a more detailed understanding of the relative position of African American women and the reason for its erosion (Simms and Malveaux 1986). In this chapter we document the distinctive experiences of African American women in the labor market, paying attention not only to race and gender but also to the important differences among African American women's experiences based on education and geography. We also look at key contributors to the increasing disparity in the wages of African American women and their white counterparts. Following earlier work by Bound and Freeman (1992), which examined relative wage erosion of African American men, we examine trends in the wages of younger African American women relative to younger white women. The news for African American women, once heralded as an equal opportunity success story for their near wage parity with white women, is not good. After advancing to a fairly small wage disadvantage (4 percent) relative to young white women in the mid-1970s, the wage disadvantage for African American women more than tripled over the next fifteen years. By 1991, African American women's wages lagged 14 percent behind white women's wages. Documenting that trend is one thing; understanding why relative wages fell so significantly is quite another. Separate trends for African American women in distinct education and geographic groups suggest that no single factor will explain the decline. Changes in work experience, education, occupational and industrial structure, the minimum wage, and I 61 LATINAS AND AFRICAN AMERICAN WOMEN AT WORK unions all have important effects on wages. In this chapter we document their effect on the decline in the relative wages of African American women. Significantly, in this investigation we focus on young workers in an attempt to bring to light the forces that shape the U.S. workforce in the late 1990s. One reason that we look to the experience of young workers is that the experience of young African American women is likely to be a harbinger of future economic achievements of all African American women. In part, this is because seniority and experience do not guard the position of younger women, as they do for more experienced workers. The effects of economic change will be seen first among the youngest workers. Moreover, considering only young workers helps to minimize the influence of cohort effects in results. For example, relative to white working women, cohorts of African American women who entered the labor market during the 1960s and 1970s had substantially higher wages than did African American women who entered the labor market in the 1940s and 1950s. As the later cohorts have replaced earlier ones in the workforce, the earnings differential has tended to fall even when progress has ceased among new entrants. The emerging reality is more clearly demonstrated among young workers. Our analysis places the labor market developments for African American women within the context of current labor market change. In the 1970s and 1980s, the labor market position of white women improved considerably in terms of both labor force participation and real wages. Women's increasing workforce attachment and shifts in the composition of the demand for different kinds of skill both contributed to a dramatic narrowing of the earnings differential between men and women during the 1980s (O'Neill and Polachek 1993; Wellington 1993; Blau and Kahn 1992; Katz and Murphy 1992). Additionally, the value of education and cognitive skills rose dramatically in the 1980s (Bound and Johnson 1991; Katz and Murphy 1992; Murnane, Willett, and Levy 1995). As for the historical context, from 1940 to 1975 the economic performance of African American women advanced substantially (Cunningham and Zalokar 1992). In 1940, more than three-fourths of African American women were employed as either farm or domestic laborers (King 1992). From 1939 to 1969, the earnings of African American women high school graduates tripled, while the earnings of similar white women doubled (Badgett and Williams 1994). In...


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