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How Social Exclusion Wrecks the Labor Market for Everyone

Amy Traub

People of color suffer direct and damaging impacts from laws, policies, and practices that exclude them from full and equal participation in the labor market and the workplace. So far in this blog series, I’ve looked at two damaging effects of workplace social exclusion: the persistently higher unemployment rates faced by African American and Latino workers and the unequal pay and benefits offered to black women. It’s clear that people of color suffer the greatest harm from racist social exclusion, yet white workers also experience negative effects.

As Connie Razza points out in her  framing paper on social exclusion: “the racist appeals at the root of social exclusion redirect blame not only for the era’s racial disparities, but also for economic inequality overall. In the end, many of the policies that are sold through racist appeals to white people hurt working and poor people of all races, and benefit the already powerful and wealthy few.”

Working Americans as a whole lose when powerful people – such as large, low-wage employers and the politicians and apologists  protecting their interests – deploy the idea that workers of color are less deserving of good jobs in order to undermine policy that would benefit working people of all races. One example is raising wages for people working at the lowest ranks of the labor market.

The reality is that while a larger proportion of black and Latino workers are paid the minimum wage, the majority of workers making the minimum are white. Similarly, if Congress raised the federal minimum wage to $15 an hour, the majority (53.5 percent) of workers who would be benefit would be white. Employers would be compelled to raise wages for an estimated 22 million white workers. Yet businesses focused on maximizing their own profits at the expense of their workforce have consistently benefitted from racist rationales to undermine efforts to raise the minimum wage.

In fact, some of the earliest opposition to the federal minimum wage stemmed from white supremacist fearmongering about its threat racial hierarchy. Testifying in 1937 against the federal Fair Labor Standards Act that implemented the first federal minimum wage, Representative J. Mark Wilcox of Florida insisted, “There has always been a difference in the wage scale of white and colored labor… You cannot put the Negro and the white man on the same basis and get away with it.” Wilcox linked the establishment of a federal minimum wage to efforts to combat lynching, regarding both as violations of “states’ rights” that would upset the existing racial order. Guaranteeing equal minimum pay to black workers was dangerous because it would imply that their labors had equal value and dignity. Yet had these racist fears prevailed and thwarted the Fair Labor Standards Act, neither white workers nor workers of color would have enjoyed the benefits of a higher wage floor.   

Even as a federal minimum wage was enacted, lawmakers excluded occupations that predominantly employed African-American workers, including agricultural workers, domestic workers, and home care workers who care for the ill, the elderly, and people with disabilities. In the 80 years since the passage of the Fair Labor Standards Act, people working in these industries –still primarily people of color – have only gradually won the right to be included in minimum wage and other core workplace protections.

Today racial anxiety continues to undermine white support for a minimum wage increase that would benefit millions of white workers. As my Sean McElwee found in his analysis of a 2016 survey, white people who were more “racially conservative” (for example, agreeing that “racial problems in the U.S. are rare, isolated situations”) were less supportive of policies to raise the minimum wage, even after controlling for political party and a host of other factors such as family income, gender, ideology, decreasing household income and recent job loss. McElwee made that case that the minimum wage was one of many examples of how racial animosity can reduce support for progressive economic policies. The exclusionary idea that people of color do not deserve good jobs can effectively block policies that would benefit all working people. 

In my final post on social exclusion, I will illustrate the way that workers’ freedom to join together in unions can be a powerful force for social inclusion in the workplace, advancing both racial and economic equity by enabling working people of all races to get a fair share of the wealth they create.  This is exactly why greedy corporate interests have consistently manipulated racism to turn working people against each other, pushing down wages, undermining solidarity, and weakening the freedom to stand together in unions. One recent example is the push by corporate lobbyists to enact federal and state-level policies deceptively named “Right to Work” laws. These laws, like the one voters in Missouri rejected on August 7th, undermine workers’ ability to form strong unions by draining collective resources. In a recent brief about “Right to Work” I explored the policy’s racist origins:

The Depression years of the 1930s saw a dramatic upsurge in union organizing, formalized by the passage of the National Labor Relations Act in 1935. Threatened by workers’ mobilizations, an oil industry lobbyist named Vance Muse promoted the term “right to work” in 1936 to describe restrictions on union activity. An associate of the Ku Klux Klan, Muse saw unionization not only as a threat to employers’ high rate of profitability but also to the white supremacist order of the Jim Crow South. As labor organizers sought to bring working people together across racial lines, Muse warned that without “right to work” legislation to impede union organizing, “white women and white men will be forced into organizations with black African apes whom they will have to call ‘brother’ or lose their jobs.” Preying on the ugliest racial enmity, Muse’s organization advanced “right to work” aggressively in the segregated South, with Arkansas, Florida, Georgia, North Carolina, Tennessee and Virginia among the first states to adopt the anti-worker laws.

With their ability to form strong unions hobbled, it’s not surprising that working people in states with “Right to Work” laws are paid lower wages and fewer benefits, on average, than comparable workers in other states. Research from Valerie Wilson and Julia Wolfe at the Economic Policy Institute finds that  white workers make 15.1 percent less per hour in states with “right to work” laws compared to white workers in states with fewer restrictions on the freedom to form strong unions. In other words, succumbing to the racism peddled by Muse and his ilk directly suppressed the pay of white workers (in some cases, for generations). While the authors note that anti-union laws are not solely responsible for these wage differences, they are a clear factor pulling down workers’ pay.

The examples of minimum wage fights and the struggle over “Right to Work” yield the same conclusion: social exclusion of people of color in the workplace ultimately benefits wealthy and powerful corporate employers, to the detriment of black, brown, and white workers alike.