The Story of Negro Gains; H. Hazlitt

What we find, in fact, is that the Negroes as a whole have not only made great absolute economic gains in this period, but gains at least fully proportional to those made by the white population. The median income of Negro families in 1949 (calculated in 1969 prices) was $2,538. In 1959 this had risen to $3,661, and in 1969 to $6,191. Thus the median income had risen 44 per cent in the ten years from 1949 to 1959, Henry Hazli tt is well known to FREEMAN readers as author, columnist, editor, lecturer, and practitioner of freedom. This article will appear as a chapter in a forthcoming book, The Conquest of Poverty, to be published by Arlington House. 694 and 144 per cent in the twenty years to 1969. This was a real gain in "constant" dollars and therefore owed nothing to the steep rise in prices during the period. The percentage of Negro families with incomes under $3,000 (also calculated in constant 1969 dollars) fell from 58.1 per cent in 1949 to 41.9 per cent in 1959 and to 20.4 per cent in 1969.

Th us the Negroes not only shared proportionately with the whites in the economic improve ment of the twenty-year period, but somewhat better than propor tionately. Compared with the 144 per cent increase in Negro family "real" incomes between 1949 and 1969, white family real incomes in the same period increased only 97 per cent. 1 1 Source: Department of Commerce, Bureau of the Census; Economic Report of the President, February 1971, Table C-20, p. 220.

1971 THE STORY OF NEGRO GAINS 695 Interpreting the Statistics I have presented the figures in this way in order to emphasize the real economic progress made by the blacks in this twenty-year per iod. But these figures standing by themselves could give a misleading inlpression. They fail to call at tention to the big gap still remain ing between the incomes of white and black families. In 1949, when the median income of Negro fam ilies was $2,538 (in 1969 prices) the median income of white fami lies was $4,973. In 1969, when the median income of black families had risen to $6,191, that of white families had risen to $9,794. Thus the median income of black fami lies, which averaged only 51 per cent of that of white families in 1949, had advanced to no more than 63 per cent in 1969. This, of course, is still far from satisfactory; but the comparison should not lead us to depreciate the extent of the blacks' real gains.

Some writers talk as if the only gain worth talking about that the blacks have made is this gain in comparison with increased white incomes. But this is a captious and confused way of looking at the matter, and leads to some paradoxical results. Suppose in this twenty-year period the gains of Negro families had been the same as they were in absolute terms, but that the real incomes of white families had shown no im provement whatever. Then though only 20.4 per cent of Negro fam ilies would haye had incomes un der $3,000 in 1969, 23.4 per cent of white families would still have had such low incomes, as they did in 1949. And though the median income of Negro families would have been $6,191 in 1969, the median income of white families (in 1969 prices) would have been only $4,973, as it was in 1949. In both respects the Negro families, though with no better incomes in absolute terms than they actually had in 1969, would have been better off than the white families.

Could this be seriously regarded as a more desirable all-around sit uation? In still other ways the Negro has made great progress in the last ten or twenty years. A leading example is in the field of educa tion. In 1957, the median years of school completed by nonwhite men (who were eighteen years of age and over, and who were in the labor force) stood at 8.0 years; for white men the corresponding figure was 11.5 years, a gap of 3.5 years. By 1967, however, the median yea.rs of schooling for nonwhite men increased to 10.2 years, and for white men the figure had increased to 12.3 years, reducing the difference to 2.1 years.

696 THE FREEMAN November Differences Within Groups One trouble with all the com parisons I have made so far is that, because they arbitrarily group all whites together on the one hand, and all blacks together on the other (for the sa.ke of making over-all comparisons) , they may help to encourage the naive tendency of many people to think of the black community as a homo geneous, undifferentiated group all in the same circumstances and with the same outlook. But as Negro leaders have reminded us, for example: "Young Negroes are at least as hostile toward their elders as white New Leftists are toward their liberal parents."2 In addition Negroes are separated by great gaps in experience - North ern from Southern, urban from rural - and great differences in income. In 1967, for example, the relative spread in incomes among the nonwhite population was even greater than among the whites. The lowest fifth of white families received 5.8 per cent of the total income of such families, the high est fifth received 40.7 per cent, and the top 5 per cent of families 14.9 per cent. But among non white families, the lowest fifth received only 4.4 per cent of the total income of such families, the highest fifth 44.7 per cent, and the 2 Bayard Rustin in Harper's Magazine, January, 1970.

top 5 per cent received 17.5 per cent. These differences are empha sized further when we compare selected groups of black families, from different regions, with the corresponding white groups. In 1969, for the nation as a whole, black families earned 61 per cent as much as their white counter parts (compared with 54 per cent in 1960). But in the North and West, black families over-all earned 75 per cent as much as white families. More striking, Northern black families with the husband and wife under a.ge 35 both present, averaged an $8,900 annual income in 1969, or 91 per cent of the average of their white counterparts, compared with only a 62 per cent average in 1960. Still more striking, Northern black families with the husband and wife under age 24 averaged 107 per cent of the income of their white counterparts. (The Census Bureau thinks this is probably the result of a sampling error. But that the income of such black families is at least equal to that of their white counterparts is sug gested by the result of a similar sampling in 1968 ; this showed such black family incomes averag ing 99 per cent of corresponding white incomes.) It is significant that where we find the Negroes making the least 1971 THE STORY OF NEGRO .GAINS 697 / progress co:mparatively is in the area.s where the free market is not allowed to operate. This is par ticularly striking in labor union membership. In the unionized trades the unwritten rule seems to be that the higher the pay, the harder it is for blacks to get in.

They make up 11 per cent of the labor force. But at latest count, in such high-paying trades as plumb ers, sheet-metal workers, electrical workers, and elevator construc tors, less than 1 per cent of the workers are black. 3 Minimum Wage Laws and Other Interventions Cause Unemployment In one important respect, the posi tion of the Negroes has retro gressed. An increasing gap has developed between the respecti ye rates of unemployment of whites and blacks. In June of 1971, the over-all rate of unemployment among whites was 5.2 per/cent, among Negroes 9.4 per cent. A difference of this sort has long existed. For example, even in the relatively good employment years 1950 to 1954 inclusive, when the white unemployment rate averaged 3.7 per cent, the rate for Negroes averaged 6.8 per cent. Part of this difference probably reflected dis crimination by employers, and part of it the exclusion of Negroes from unions. In those five years 3 Author's source: Time, April 6, 1970.

unemployment among teenagers (16 to 19) was also higher, as it is now, than in the working force as a whole. But the gap in this respect between white and black teenagers was comparatively small. Unemployment among white teen agers in 1950 to 1954 averaged 10.3 per cent, and among black teenagers 11.1 per cent. Since that time the situation has been steadily deteriorating. In June of 1971 the unemployment rate among white teenagers was 13.5 per cent, while among black teenagers it reached the appalling level of 33.8 per cent. By far the main cause of this has been the Federal minimum wage law. Minimum wage legisla tion has been on the books since 1938, but in March 1956 the min imum rate was jacked up from 75 cents to $1 an hour, and it has since been raised by successive jumps to $1.60 an hour in Febru ary 1968. But the law cannot make a worker worth a given amount by making it illegal for anyone to offer him less. It can merely make it unprofitahle for employers to hire workers of low skills, and therefore forces such workers into unemployment. One of the greatest helps we could give the Negro today would be to repeal the statu tory minimum wage.

What our politicians still do not realize is that the greatest coun698 THE FREEMAN November teracting force to racial discrim ina tion is the free market. As the economist W. H. Hutt has put it, "The market is color-blind." If an employer can make a greater profit by employing a Negro than a white man at a given job, he is likely to do it. Even the militant Negro Marcus Garvey recognized this, though in a somewhat cynical manner: "It seems strange and a para dox, but the only convenient friend the Negro worker or laborer has in America at the present time is the white capitalist. The capitalist being selfish - seeking only the largest profit out of labor - is willing and glad to use Negro labor wherever possible on a scale reasonably below the standard union wage ... but if the Negro unionizes himself to the level of the white worker, the choice and preference of employment is given to the white worker. 4 In a free market, however, Ne gro employment does not neces sarily depend on acceptance of a lower wage rate. If a Negro - say an outstanding professional base ball player or musician - is clear ly superior to the best white com petitor, he is likely to be employed in preference, at an even higher rate, because the employer expects to make a greater profit on him.

4 Quoted by Bayard Rustin, Harper's Magazine, January 1970. Not a Separate "Black Economy" but Full Admission to the Market The chief hope for the economic progress of the Negroes lies not in some dream-world effort to form a separate "black economy," but in their becoming and being accepted as a more fully inte grated part of a great expanding capitalist economy. In spite of the discrimination that still exists, the economic position of the Negro in the United States is not only in comparably higher than in Haiti or in any of the all-black coun tries of Africa, but higher than most whites even in the industri alized countries of Europe. For what the best available sta tistical. comparisons are worth, here they are: As compared with a median annual income of $2,138 for Negro unrelated individuals in 1968, the per capital gross na tional product for that year was $91 in Haiti, $238 in Ghana, $298 in Zambia, and $304 in the Ivory Coast. In Chad, the Congo, Mali, Niger, and Nigeria, it ranged from a low of $63 to a high of $88.5 Turning to European compari sons: In the early 1960's, when it was calculated that some 44 per cent of America's nonwhite popu lation was below the so-called pov erty line of $3,000 a year, it de veloped that some 75 per cent of 5 Source: Statistical Abstract, 1970, p.

810.

1971 THE STORY OF NEGRO GAINS 699 Britain's entire, predominantly white, population was also below that line. 6 The $2,138 median in come for American unrelated Ne groes in 1968 compares· with a per capita gross national product for that year of $1,544 in Austria, $2,154 in Belgium, $2,206 in West Germany, $1,418 in Italy, and 6 Author's source: M. Stanton Evans in National Review Bulletin, February 3, 1970. $1,861 in the United Kingdom. What chiefly counts is the pro ductivity of the whole economy; what counts is the maximization of the incentives to that produc tivity. And those incentives are maximized when opportunities are maximized - when we neither fa vor nor discriminate against any man because of his color, but treat everyone according to his merits as an individual. ~ IDEAS ON L$ LIBERTY They Constantly Clamor THERE ARE PERSONS who constantly clamor. They complain of oppression, speculation, and pernicious influence of accumulated wealth. They cry out loudly against all banks and corporations and all means by which small capitalists become united in order to produce important and beneficial results. They carryon mad hostility against all established institutions. They would choke the fountain of industry and dry all streams. In a country of unbounded liberty, they clamor against oppression. In a country of perfect equality, they would move heaven and earth against privilege and monopoly. In a country where property is more evenly divided than anywhere else, they rend the air shouting agrarian doctrines. In a country where wages of labor are high beyond parallel, they would teach the laborer that he is but an oppressed slave.

DANIEL WEBSTER, in the Senate in 1833 A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN Dividing the Wealth ECONOMICS, as a science, is sup posed to be "value free." But, after one has pursued the subject through all its ramifications, it turns out that if men are permitted to make their own voluntary decisions about production, with the state relegated to the role of policing contractsa.nd maintaining an hon est currency, the creation of wealth, of value itself, rises to a higher pitch and more people get more goods, services, and oppor tunities. So, paradoxically, a "value free" subject leads one into an in evitable discussion of values. A free economic system is worth pearls and rubies when compared to any of the many permutations of socialism that more and more afflict our globe. Howard E. Kershner, who helped found the Christian Freedom Foundation and is editor of its journal, Christian Economics, tumbled long ago to the fact that, as Edmund Opitz puts it, religion 700 and the free economic system of cap italism are natural allies, not ene mies. Christian voluntarism goes hand in hand with economic volun tarism; their values support and en hance each other. One can only be Christian if one is voluntarily choosing between good and evil.