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Date:         Fri, 17 Apr 1992 08:19:45 EDT
From:         Phillip J VanFossen <pvanfoss@MAGNUS.ACS.OHIO-STATE.EDU>
Subject:      Re: Jay's quote...
Comments: To: POLITICS@ucf1vm.cc.ucf.edu
              Steven Sultan" at Apr 14, 92 4:07 pm

>
> Blacks and whites with the same educational level acheive roughly the same
> levels and make about the same amount of money.  Education is one important
> form of enpowerment.


While this seems to be the ultimate forsenic point w.r.t. discrimination in the
workplace, this statement  is, in fact, untrue.  James Heilbrun (_Urban
Economics and Pu
blic Policy_, 1987) has done some semi-partial regression work on unemployment
and wage-rate ratios for blacks and whites.  When educational level is held con
stant, Heilbrun reports that unemployment for white males is approximately (usi
ng Cenusu Burueau data for 1979 and 1982) 9.5%, for black males the figure
rises to 23.5%.

Holding educational level constant, Heilbrun also found that the white
male-black male wage ratio was .77 (for all occupation levels), this figure up
from .75 in 1979.  The picture is a bit brighter for black females who make
approximately .91 of their white counter-parts.  The point being, obviously
that while education is an important form of empowerment, something else must
be at work here.

Economists have often tried to, as Jay is doing, explain away discrimination by
invoking some other explanation: education, experience, the less subtle "produ
ctivity" issues, etc.  Indeed, economists must scramble to explain away discrim
ination because of the violation of Basic economic principles its existence
implies.
Namely, that in a free labor market, firms will hire the lowest wage labor
(black/female, etc) until that labor's price (wage) is equal to the higher
priced wage labor (white males).  Obviously, this is not the case, as Heilbrun
and others have noted.  What is the cost bourne by our economy of these faulty
economic decisions?  I do not have data for this, but suffice to say, all
fiscal conservatives should be concerned about how it that this "entitlement
program" for one segment of the labor market impacts upon us all in the
aggregate.


 the current give-away welfare system, in place for 40 years, has not done
> anything to change the number of blacks who are educated.  In fact those
> numbers are getting worse.>
> "Entitlement does not lead to Empowerment."   Jay Steven Sultan

Offhandedly, this may be true.  Indeed, the number of blacks at universities
across the country (both as students and faculty) has fallen in the 1980's.
However, implying that a correlation (entitlement programs, fall in education)
is causality is misleading and spurious.  Something I've noticed quite a bit on
this list.  I resent the implication, for example, that the poor whites (who
outnumber blacks significantly on AFDC rolls across the nation) need not worry
about education, or that the "give-away" system doesn't taint their 'moral
fiber' such that they don't/can't go and find work.  Certainly this smacks of
callous disregard for people of both races who are forced to resort to AFDC for
short periods of time in difficult times (as with 70% of all recipients of
AFDC, most leave after 6 mos.)

Thus I am concerned as to the logic of the qoute (or perhaps, less than
ironically given the tax fiasco, the illogic of it) w. r. t. its purpose.
Ah well, I guess this is what Jefferson had in mind when he opined, "Error of
opinion may be tolerated where reason is left free to combat it."

Mir,
PVF
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