The Real Reason the American Economy Boomed After World War IIBreaking News
tags: racism, economics, discrimination, middle class, prosperity
Mr. Tankersley covers economic policy in the Washington bureau of The Times.
The United States long reserved its most lucrative occupations for an elite class of white men. Those men held power by selling everyone else a myth: The biggest threat to workers like you are workers who do not look like you. Again and again, they told working-class white men that they were losing out on good jobs to women, nonwhite men and immigrants.
It was, and remains, a politically potent lie. It is undercut by the real story of how America engineered its Golden Era of shared prosperity — the great middle-class expansion in the decades after World War II.
The economy thrived after World War II in large part because America made it easier for people who had been previously shut out of economic opportunity — women, minority groups, immigrants — to enter the work force and climb the economic ladder, to make better use of their talents and potential. In 1960, cutting-edge research from economists at the University of Chicago and Stanford University has documented, more than half of Black men in America worked as janitors, freight handlers or something similar. Only 2 percent of women and Black men worked in what economists call “high-skill” jobs that pay high wages, like engineering or law. Ninety-four percent of doctors in the United States were white men.
That disparity was by design. It protected white male elites. Everyone else was barred entry to top professions by overt discrimination, inequality of schooling, social convention and, often, the law itself. They were devalued as humans and as workers. (Slavery was the greatest devaluation, but the gates of opportunity remained closed to most enslaved Americans and their descendants through Emancipation and its aftermath.)
Women and nonwhite men gradually chipped away at those barriers, in fits and starts. They seized opportunities, like a war effort creating a need for workers to replace the men being sent abroad to fight. They protested and bled and died for civil rights. And when they won victories, it wasn’t just for them, or even for people like them. They generated economic gains that helped everyone.
The Chicago and Stanford economists calculated that the simple, radical act of reducing discrimination against those groups was responsible for more than 40 percent of the country’s per-worker economic growth after 1960. It’s the reason the country could sustain rapid growth with low unemployment, yielding rising wages for everyone, including white men without college degrees.
America’s ruling elites did not learn from that success. The aggressive expansion of opportunity that had driven economic gains was choked off by a backlash to social progress in the 1970s and ’80s. The white men who ran the country declared victory over discrimination far too early, consigning the economy to slower growth. Sustained shared prosperity was replaced by widening inequality, lost jobs and decades of disappointing income growth for workers of all races.
In important ways, much of the work of breaking down discrimination stalled soon after the passage of the Civil Rights Act in 1964. “It was fundamentally over by the time of the Reagan presidency,” William A. Darity Jr., a Duke University economist who is one of his profession’s most accomplished researchers on racial discrimination, told me. Over the past several decades, some barriers to advancement for women and nonwhite men have grown back. New ones have grown up beside them.