Another Face of Inequality: Racial and Ethnic Exclusion in the Welfare State

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1 JILL QUADAGNO Another Face of Inequality: Racial and Ethnic Exclusion in the Welfare State Although there are several studies that document the racial biases in the American welfare state, these issues have received less attention in comparative social policy research (Lieberman 1998; Quadagno 1994; 2000). To some extent this is an artifact of history, since European welfare states developed prior to the postwar flows of racially and ethnically diverse immigrant groups whose presence has created social tensions. Before the war, most migrants were from neighboring countries. Those who settled permanently into the host nations experienced thorough assimilation. Postwar immigrant streams, by contrast, consisted of former colonials and large numbers of manual workers from Third World nations (Ireland 1995). Specific immigrant groups were concentrated in different countries: Algerians in France, Turks in Germany, and West Indians and South Asians in Britain (Gordon 1995). When economic conditions deteriorated after 1974, many "guest" workers stayed, creating resident ethnic communities. Those who originated in nations belonging to the European Community gained political and social rights; the others were excluded as host nations concentrated on maintaining thenown welfare states for their own nationals (Garth 1986). The attention on ethnoracial immigrant groups should not obscure the fact that there are also indigenous groups who, in many nations, were denied the rights of citizenship, including the right to Social Politics Summer 2000 O 2000 Oxford University Press

2 230 Quadagno vote and the right to own property. Among them are African Americans and Native Americans in the United States, the Maori in New Zealand, the Inuit in Canada and Denmark, the Aborigines in Australia, and the Flemish and Walloons in Belgium. For the most part the incomplete incorporation of racial and ethnic minorities into the polity has been ignored by welfare state theorists. Although many acknowledge that race or ethnicity are dimensions of the stratification process, they rarely develop this insight theoretically. For example, Esping-Anderson's (1999, 42) concept of "intergenerational risk transmission" explicitly recognizes that the life chances of some racial groups are restricted and that these disadvantages are transmitted across generations. Inherited disadvantages produce inequality in social capital. The minimalist solution is to expand the opportunity to obtain human capital through education. A more comprehensive approach is to enact policies that provide "any resource which can be considered vital for life chances... the entire complex of social resources necessary to function optimally" (Esping-Anderson 1999, 43). Yet Esping-Anderson never explains what form these policies should take or how social resources can compensate those who have been relegated to an inferior position because of their race. Feminist theorists sometimes mention race in their discussions of inequality, but they fail to specify how the processes that create racial or ethnic inequality might differ from those that create gender inequality (O'Connor, Orloff, and Shaver 1999; Orloff 1993). In his paper in this volume, Korpi (see pp ) also alludes to race briefly, but always subsumes it into class. Yet the theoretical principles that Korpi derives from gender and class models do provide a useful framework for evaluating ways to understand patterned forms of racial and ethnic inequality across nations. In particular, Korpi identifies three interrelated dimensions of inequality that can be applied in theorizing racial/ethnic inequality. These dimensions include inequality in material conditions of living, inequality in agency, and inequality in policy institutions. Acker's (see pp ) analysis of workplace organizations provides the basis for explaining how ethnoracial inequality differs from class and gender inequality. In Acker's view, although "class, gender and race are complexly related aspects of the same ongoing practical activities," each has a different basis. Class inequality emerges from the wage relation, gender inequality stems primarily from the segregation of women into certain lower positions in the workplace, but racial inequality results from exclusion. In the next section I attempt to describe the forms racial/ethnic inequality take in different nations and in different historical contexts. I also explore the ways in which the welfare state intervenes in

3 Another Face of Inequality 231 patterns of distributive processes organized around race or ethnicity. I base my discussion on Korpi's dimensions of inequality, but add to this Acker's concept of exclusion as the mechanism that maintains racial/ethnic inequality. Dimensions of Inequality Inequality in Material Conditions Korpi defines inequality in material standards of living in terms of such direct measures as income, wealth, and poverty, as well as by more indirect indicators including health, escapable morbidity, and premature mortality. The issue, then, is whether racial and ethnic minorities fare more poorly in these indicators than the majority group within a given country. Since race consciousness is embedded in data gathering procedures in the United States, data on race and ethnic origin are readily available for many of these indicators. Poverty rates in the United States are higher among African Americans and Hispanics than they are for whites. African Americans also have poorer health than whites, particularly among the middle aged and old. Black men and women in their fifties are significantly more likely than whites of the same age to report being in "fair" or "poor" health (Bound, Schoenbaum, and Waidmann 1996). Blacks also experience higher morbidity and mortality than whites (Shea, Miles, and Hayward 1996). As a general rule, European immigrants have higher rates of poverty than the majority group (Gordon 1995). This is also the case in Canada where poverty rates among immigrants from Latin America and West Asia stand at 41% and 39.4% among immigrants of Arab origin. Among Canadian Aboriginals, too, the poverty rate is 39.4% (Kazemipur and Halli 1997). The causes of higher poverty rates among immigrants are complex. Immigrants may face exclusion and marginalization in the host nation because of racial/ethnic hostility. A Eurobarometer opinion survey conducted in 1989 asked if people believed there were "too many residents of another race" in their country. Thirty-seven percent of Germans, 44% of British, and 43% of French said "yes" (Gordon 1995, 535). Immigrants also often face language barriers, have incompatible educational credentials and nontransferable job skills, and lack job hunting networks (Halli and Kazemipur 1999). Finally, immigrants may bring their poverty with them from their country of origin. Thus it is difficult to determine in a systematic way if a "racialization" of poverty is occurring through processes of exclusion or if these groups will experience social mobility and thorough assimilation by the second or third generation (Halli and Kazemipur 1999).

4 232 Quadagno Inequality in Agency The second component of inequality in Korpi's model is agency inequality. It includes three components: political representation, access to tertiary education, and labor force participation. Agency inequality in political representation may occur at several levels. At the most basic level is the denial of citizenship to members of a racial/ ethnic group. This represents the purest form of Acker's concept of exclusion. It is important to recognize that controlling membership in the polity has always been a way of protecting national identity. Determining who has legitimate claims to membership is not derived from "static ethnodemographic" categories but from a dynamic political process. This process can become a mechanism of racial exclusion if host nations establish categories of "privileged" foreigners (Brubaker 1996, 60). In some cases immigrants from ex-colonial territories have been granted citizenship privileges, guaranteeing them rights of residency, political participation, and social benefits (Ireland 1995). By contrast, groups that were admitted on limited work permits often have had none of these rights (Gordon 1995). In Germany, Austria, and Switzerland, for example, guest workers initially had no citizenship rights, although some of these restrictions were loosened in the 1980s. Racial minorities who are natives seem even more likely than immigrants to be victims of exclusionary practices. In the United States, African Americans in the South were denied the right to vote until passage of the Voting Rights Act of In Denmark, Inuits lacked voting rights until The Maori could not vote in New Zealand until 1962 (Janowski 1998). In class-based theories of the welfare state, democratization proceeds in stages, as workers struggle to gain first civil, then political, and finally social rights. The pursuit of rights flows from the power invested in workers as a numerical majority (Esping-Anderson 1990; Hicks 1999; Myles 1988). Racial or ethnic minorities, by definition, can never muster a political majority. Rather their votes can only be used at the margins of politics, to swing an election outcome (Quadagno 2000). Although it is possible for racial/ethnic minorities to win representation, they are frequently underrepresented in political institutions. The lack of political representation is another form of agency inequality measured by numbers of elected officials and level of participation in governing bodies. Agency inequality may also occur through the systematic denial of equal educational opportunities to racial minorities. In this case, institution-specific forms of exclusion may be operating. In the United States, racial segregation in education was legal until 1954, when the Supreme Court ruled that "separate but equal" was

5 Another Face of Inequality 233 unconstitutional (Schuman, Steeh, Bobo, and Krysan 1997). Inequality in education may be a secondary consequence of housing segregation if minorities are concentrated in school districts where the quality of schooling is inferior to that of the majority group. In the United States, public education is funded primarily through local property taxes. The separation of metropolitan areas by income has created stark inequalities. In Texas, for example, the wealthier school districts spend three times more than the poorest (Weir 1995). Neighborhoods characterized by dense racial segregation are also those with inferior schools (Massey and Denton 1993). Agency inequality is also produced by unequal access to employment. Acker's paper is organized around the consequences of exclusion from job opportunities. There is considerable evidence that racial/ethnic minorities experience job discrimination in many countries. In The Netherlands, Turks and Moroccans are excluded from high wage jobs because many receive only a primary education (Veenman 1995). In the United States, employers refuse to hire inner city blacks because they hold negative biases against them (Wilson 1996). In Great Britain, young blacks and Asians who are currently entering the labor market are better prepared to compete than their parents' generation. Yet their returns to education are lower than they are for whites because "job opportunities for blacks and Asians have been limited by entrenched inequality and by racial discrimination" (Brown 1995, 590). One study found that one-third of private employers discriminated against Asian and Afro-Caribbean job applicants (Brown 1995). The consequences of job discrimination may be compounded by residential segregation. In France, Algerian immigrants are housed in "reservation areas" and "dump estates" where maintenance is minimal (Body-Gendrot 1995). In other European countries, "many inner city communities and outer-city public housing estates have been cut off from the mainstream labor market institutions and informal job networks, creating the vicious cycle of weak labor force attachment, growing social exclusion and rising tensions" (Lawson and Wilson 1995, 695). Overall, immigrant unemployment rates are double those of natives for all these reasons. Inequality in Policy Institutions The third form of inequality in Korpi's model is inequality in policy institutions. Social programs vary in form and in the rules that govern access to benefits. Benefits may be provided on the basis of need via a means test or benefits may be earned. Benefits may also

234 Quadagno be universal, with eligibility resting on citizenship or long-term residency (Esping-Anderson 1990). There are many forms of racial/ethnic exclusion from the welfare state.

6 234 Quadagno be universal, with eligibility resting on citizenship or long-term residency (Esping-Anderson 1990). There are many forms of racial/ethnic exclusion from the welfare state. Racial or ethnic disparities in benefits may be merely a byproduct of labor market experience or human capital variables. If this is the case, then racial/ethnic minorities may be disproportionately represented in the means-tested programs because of their high rates of poverty. Racial/ethnic minorities may also have lower earnings-related benefits, again reflecting their differential experiences in the labor market. If minorities systematically have lower earnings, fewer years of earnings, or higher rates of disability, then they will receive lower benefits than the majority group. On the other hand, discriminatory features may be built into the eligibility criteria for benefits. Means-tested benefits empower local relief authorities to determine who receives benefits and how much beneficiaries receive. This discretionary power allows the principle of exclusion to operate. In the old age assistance program in the United States, for example, African Americans received lower benefits than whites because they were presumed to have a lower standard of living; many poor blacks were deemed ineligible for any benefits (Quadagno 1988). Racial/ethnic disparities in social insurance benefits may also occur if the eligibility criteria exclude some occupations. For example, the Social Security Act of 1935 excluded agricultural workers and domestic servants. That meant that three-fifths of all black workers in the United States at that time were ineligible for benefits (Quadagno 1988). Also, the spouse benefit in the U.S. Social Security system is biased against black women because they are less likely than white women to be married to high earner males and more likely to be divorced or separated (Harrington Meyer 1996). Finally, minorities may be excluded entirely from social insurance programs based on their citizenship status. Germany has signed bilateral agreements that allow eastern European companies to operate with their own workers. Although these contract laborers reside in Germany, they remain under their home country's social security system (Ireland 1995). On a cultural level, social welfare programs have the capacity to unify or divide. If the majority group perceives minorities as consuming a disproportionate share of earned benefits, racial/ethnic resentment may be activated. Hostility to foreigners in some European countries stems from the belief that they are burdening the unemployment system (Gordon 1995). In Germany, the large population of foreigners has become increasingly ghettoized and dependent on means-tested benefits. Whereas only 5% of the native German popu-

7 Another Face of Inequality 235 lation used public assistance during 1991, 15% of foreigners did so (Lawson and Wilson 1995). Germans have come to view immigrants as the cause of housing shortages and labor market difficulties, leading to racially motivated attacks and the politicization of anti-immigrant sentiment. As Veenman explains about Dutch social policy: Feelings of solidarity are stronger when the assisted group is very similar to the population that is taxed for transfer programs. Consequently, in recent years there has been an attempt to emphasize general policies that affect the entire citizenry and a perceptible reluctance to establish new policies aimed only at ethnic minorities. (1995, 626) Conclusion Just as African Americans have been subject to processes of exclusion in the United States, so the European experience demonstrates that new immigrants can be assigned to economically marginal roles and incomplete citizenship if they are perceived as outsiders and inferior. The postwar flow of ethnically diverse immigrants has challenged traditional concepts of citizenship and social solidarity that have been grounded in similar identity-shaping experiences and social homogeneity (Ireland 1995). The question that remains to be answered is whether racial/ethnic cleavages are hardening. If so, this suggests that ascribed characteristics may be increasingly important in resource allocation. The economic crises of the past decades have made the task of reducing ethnic/racial inequality more difficult, and indeed economic prosperity may be a precondition for solidarity, social integration, and universality. Declining economic growth means less economic surplus to be distributed, lower levels of well-being, and increased risk that families at the lower end of the income distribution will fall into poverty. If countries are to prevent the emergence of a racialized underclass, they must expand their definition of social citizenship to incorporate minority groups. Expanding the three dimensions delineated by Korpi captures the parameters of racial/ethnic inequality. These include the following: the extent to which racial/ethnic groups are equal to the majority group in the material conditions of life; the extent to which racial/ ethnic minorities have equality of agency in political institutions, in educational opportunity, and in the labor market; and the extent to which racial/ethnic minorities have equal access to policy institutions. In each case Acker's concept of exclusion helps to explain how minorities are relegated to inferior positions. The task now is to elab-

236 Quadagno orate the social, economic, and political processes of exclusion within specific countries and identify commonalities across nations.

8 236 Quadagno orate the social, economic, and political processes of exclusion within specific countries and identify commonalities across nations. NOTE I thank John Myles for his helpful comments on a previous draft of the paper. REFERENCES Body-Gendrot, Sophie "Immigration, Marginality, and French Social Policy." Pp in Poverty, Inequality and the Future of Social Policy, eds. Katherine McFate, Roger Lawson, and William Julius Wilson. New York: Russell Sage. Bound, John, Michael Schoenbaum, and Timothy Waidmann "Race Differences in Labor Force Attachment and Disability Status." The Gerontologist 36: Brown, Colin "Poverty, Immigration and Minority Groups: Policies Toward Minorities in Great Britain." Pp in Poverty, Inequality and the Future of Social Policy, eds. Katherine McFate, Roger Lawson, and William Julius Wilson. New York: Russell Sage. Brubaker, Rogers Nationalism Reframed. Cambridge: Cambridge University Press. Esping-Andersen, Gosta The Three Worlds of Welfare Capitalism. Princeton, N.J.: Princeton University Press Social Foundation of Postindustrial Economies. New York: Oxford University Press. Garth, Bryant G "Migrant Workers and the Rights of Mobility in the European Community and the United States." Pp in Integration through Law, eds. Mauro Cappelletti, Monica Secombe, and Joseph Weiler. New York: Walter degruyter. Gordon, Ian "The Impact of Economic Change on Minorities and Migrants in Western Europe." Pp in Poverty, Inequality and the Future of Social Policy, eds. Katherine McFate, Roger Lawson, and William Julius Wilson. New York: Russell Sage. Halli, S., and A. Kazemipur "A Study of Poverty of Immigrants in Canada." Paper presented at the Metropolis Conference, Vancouver, Canada, 15 January Harrington Meyer, Madonna "Making Claims as Workers or Wives: The Distribution of Social Security Benefits." American Sociological Review 61: Flicks, Alexander Social Democracy and Welfare Capitalism. Ithaca, N.Y.: Cornell University Press. Ireland, Patrick R "Migration, Free Movement and Immigrant Integration in the EU: A Bifurcated Policy Response." Pp in European Social Policy, eds. Stephan Liebfried and Paul Pierson. Washington, D.C.: Brookings Institution.

Another Face of Inequality 237 Janowski, Thomas. 1998. Citizenship and Civil Society. Cambridge: Cambridge University Press. Kazemipur, A., and S. S. Halli. 1997.

9 Another Face of Inequality 237 Janowski, Thomas Citizenship and Civil Society. Cambridge: Cambridge University Press. Kazemipur, A., and S. S. Halli "Plight of Immigrants: The Spatial Concentration of Poverty." Canadian Journal of Regional Science XX: Lawson, Roger, and William J. Wilson "Poverty. Social Rights and the Quality of Citizenship." Pp in Poverty, Inequality and the Future of Social Policy, eds. Katherine McFate, Roger Lawson, and William Julius Wilson. New York: Russell Sage. Lieberman, Robert C Shifting the Color Line: Race and the American Welfare State. Cambridge, Mass.: Harvard University Press. Massey, Doug, and Nancy Denton American Apartheid. Cambridge, Mass.: Harvard University Press. Myles, John Old Age in the Welfare State. Lawrence: University Press of Kansas. O'Connor, Julia S., Ann Shola Orloff, and Sheila Shaver States, Labor Markets and Families. Cambridge: Cambridge University Press. Orloff, Ann "Gender and the Social Rights of Citizenship: The Comparative Analysis of State Policies and Gender Relations." American Sociological Review 58: Quadagno, Jill The Transformation of Old Age Security. Chicago: University of Chicago Press The Color of Welfare. New York: Oxford University Press "Promoting Civil Rights through the Welfare State: How Medicare Integrated Southern Hospitals." Social Problems 47: Schuman, Howard, Charlotte Steeh, Lawrence Bobo, and Maria Krysan Racial Attitudes in America. Cambridge, Mass.: Harvard University Press. Shea, Dennis, Toni Miles, and Mark Hayward "The Health/Wealth Connection: Racial Differences." The Gerontologist 36: Veenman, Justus "Ethnic Minorities in the Netherlands." Pp in Poverty, Inequality and the Future of Social Policy, eds. Katherine McFate, Roger Lawson, and William Julius Wilson. New York: Russell Sage. Weir, Margaret "Poverty, Social Rights and the Politics of Place in the United States." Pp in European Social Policy, eds. Stephan Liebfried and Paul Pierson. Washington, D.C.: Brookings Institution. Wilson, William J When Work Disappears. Chicago: University of Chicago Press.

RACIAL-ETHNIC DIVERSITY AND SOCIOECONOMIC PROSPERITY IN U.S. COUNTIES

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