ascriptive factors valued in labor markets.

Transcription

1 Intergroup Inequality in the Nations of the Commonwealth Parliamentary Association by William Darity Jr., Sanford School of Public Health, Duke University, Durham NC 27708, USA July 22, 2011 Preliminary draft 1. As the tables that were generated by our team at the Research Network on Racial and Ethnic Inequality at Duke University indicate, there is substantial inequality in economic status among the nations comprising the Commonwealth Parliamentary Association (CPA). The first set of tables provide recent estimates (2008 data) of the magnitude of Gross National Income (GNI) per capita across the member nations. The richest nations in the table have per capita income levels 35 to 40 times those of the poorest. A second set of tables provides estimates of recent rates of economic growth in each of the countries. Again there is wide variation, ranging from countries that routinely have maintained near double-digit growth rates as well as two that have experienced negative rates of economic growth in recent years.. The third set of tables reports on per capita GNI adjusted for purchasing power parity. This leads to a dramatic compression in the distribution of cross country incomes because of the substantially lower costs of living in the economically poorer member states. However, this compression of measured per capita income, which still largely preserves a relative economic ranking of the nations consistent with the unadjusted GNI estimates, is not necessarily associated with a narrower variation in the well being of citizens of each country. Per capita income, whether adjusted or unadjusted for purchasing power parity, is now widely recognized as, at best, a clumsy indicator of social welfare (Sen, 1997). 2. To come closer to an assessment of variations in well being across the CPA, we provide a fourth set of tables that report on recent estimates of each nation's score on the UNDP's Human Development Index. The Human Development Index supplements per capita income with components that address educational attainment and health outcomes in a country as important elements of assessing well being. This measure reverses the compression of relative status that occurs when per capita income adjusted for purchasing power parity is considered in isolation. Countries with low levels of unadjusted per capita income tend to lack universal primary and secondary schooling, universal levels of decent sanitation and health services, nor the social infrastructure for support to block extreme deprivation. These conditions that insure a minimum standard of well -being are disappearing from the richer countries under the pressures of the current international financial crisis (and never existed comprehensively in a few of the richest, including my own, the USA). Some of the poorer nations and regions have managed to develop the social infrastructure for the provision of health services that yield positive health outcomes that would not be predicted by mere extrapolation from their average level of income, e.g.

2 Sri Lanka or the state of Kerala in India (see Sen 1997). But success in the provision of a decent health standard for a nation's overall population again may mask health disparities between ethnic and racial groups within the country. For example, racialized stress consequent upon exposure to discrimination increasingly is implicated in elevated levels of hyptertension among stigmatized peoples. (Nazroo 2003). 3. Regardless, ethnoracial tensions that have their foundation in material inequalities between groups tend to be aggravated in a world economy in deep recession. The contraction in employment means a reduction in employment which means, in turn, that dominant social groups intensify exclusionary practices to preserve job turf. In general, there are lower incomes to be shared across social groups. Furthermore, governments in fiscal crisis are confronted with a reduced capacity to provide support for the most deprived members of their populations. A prime example is the intercommunal violence in Indonesia during triggered by the economic collapse precipitated by the Asian currency crisis. To compound matters, extreme intercommunal conflict can inhibit prospects for renewed economic growth, closing a vicious circle. 4. However, none of the data in these tables addresses the distribution of incomes or well-being within each of the CPA nations. Indeed, aggregate data of this type ignores one of the most critical issues that apply with near universality across the CPA -- the existence of dense inequalities in life outcomes for members of ethnically or racially differentiated social groups. Ethnic/racial differentiation may be predicated on phenotype, caste position, religious affiliation, or prior national origin and immigrant status. The implications and impact may play out differently on the basis of an individual's gender. Regardless, the phenomenon of intergroup disparity and social inequity exists virtually everywhere. I submit that this is a social problem that should be at the forefront of the CPA's agenda for action and redress. 5. The Human Development Index is especially amenable to providing insights about variations in well-being across ethnic/racial groups with CPA countries -- if the data actually has been gathered that would facilitate this type of analysis. In many countries data is not collected that acknowledges the presence of ethnic/racial differentiation in the population. In the 1994 edition of the United Nations Development Program's (UNDP) Human Development Report ethnic/racial inequality was described across a very limited set of countries by calculating disaggregrated values of the UNDP's Human Development Index (HDI). Again, cross national comparisons suggest that intergroup differentiation and inequality is evident in countries with scores at all levels of the HDI. 6. In 1992, toward the end of the apartheid era, South Africa's overall HDI score was.65 out of a potential maximum value of one. However, the score estimated separately for white South Africans was.88, a score that would have placed white South Africa 24th out of approximately 180 countries worldwide (at the same leve as Spain). In contrast, blacks in South Africa had an HDI score of only.46, placing them 123rd out of 180 countries, ranking slightly above the Congo.

3 Today post-apartheid South Africa has maintained one of the highest unemployment rates in the world, consistently hovering in the vicinity of 25 percent on the basis of a narrower definition that only counts among the unemployed those actively seeking work (Sapa 2010). But exposure to unemployment is not evenly distributed across South Africa's ethnoracial groups. The black majority experiences unemployment rates close to 30 percent while the white minority experiences unemployment rates close to 4 percent. Despite substantial differences in educational attainment, still greatly favoring whites in South Africa, these huge gaps in unemployment as well as earnings cannot be explained without giving adequate account to the persistence of discrimination in South Africa's labor markets (Sherer 2000). 7. For Nigeria the Human Development Report in 1994 did not provide direct information on HDI scores by ethnic group since data was not available on that basis in any national survey. Instead cores were provided for each of the 19 Nigerian states. A geographic disaggregation of this type afforded indirect information about intergroup inequality in Nigeria because each of the states have a high degree of ethnic homogeneity. Therefore, it is striking that while Nigeria's overall HDI was a very low.348 in 1992, ranking the country 139th in the world, the state of Bendel (prior to its division into the Delta and Edo states) had a score of.67, higher than Sri Lanka or Cuba, while the state of Borno had an HDI of only.16, beneath any country in the world. A recent study of returns to education in Nigeria conducted by Ruth Uwaifo Oyelere (2010) indicates that these ethnic-cum-spatial disparities persist to the present. 8. Canada's HDI in 1992 of.93 was the highest in the world. Nevertheless, even there the evidence of pronounced intergroup disparity. Again it was not possible to construct separate HDIs for Canada's ethnic/racial groups with the available data, separate studies "show[ed] that the 'aboriginals' (the Indians, the Inuit, and the Metis, constituting 2.3% of the population) [had] a life expectancy 5.6 years lower than the rest of the population, and their real income [was] one-third less (UNDP 1994 p.100)." Indigenous people were far more likely to be subjected to violence, experience depression, and undergo unemployment. Their unemployment rate of 20 percent was twice the national average in Canada at the time (UNDP 1994 pp.25-6, 32). Canada has designated "visible minorities" as an official category in national discourse in crafting a self-described multicultural society. In a major study of earnings differences across Canada's ethnic groups, the late Morton Stelcner (2003) demonstrated that among the "visible minorities" black Canadians most consistently suffered large discriminatory penalties in wages. 9. There is also strong evidence of discrimination in the UK labor market directed against non-white ethnic minorities, particularly persons of West Indian and Asian ancestry. Both audit studies -- including the first correspondence tests performed anywhere in the world -- and statistical studies consistently demonstrate wage and employment penalties for the UK's darker citizens (McIntosh and Smith 1974, Chiswick

4 1980, Stewart 1983, Dex 1986, Riach and Rich ), Blackaby et al. 2002, Algan et al. 2010). Indeed, in the statistical studies that have been performed, regardless of the period of the study or the immigrant generation of the subjects of the study, controlling for educational attainment widens the gap in earnings between the non white ethnic minorities and the white majority. In a study that is now almost 20 years old Shirley Dex's (1986) focused her study on black and white youths who were at the lowest end of the educational attainment spectrum, school leavers. In this population the white school leavers had far greater odds of obtaining employment than white school leavers. Disturbingly, a similar finding is apparent in a recent study by Algan et al. (2010). 10. Even in a small, majority black country with no modern history of apartheid or legal segregation, a recent study in Bermuda indicates that more than 30 percent of the earnings gap between black and white men is best explained by discrimination against black male workers (Mincy et al. 2011). Bermuda has one of the highest per capita incomes in the world because of its significant and highly successful offshore banking sector. However, the largesse from that sector is far from equitably distributed across Bermuda's population. 11. A statistical study of India's economy finds that half of the intercaste wage gap is due to discriminatory treatment against the Dalits and tribals, attributable in large measure to unequal access to comparable employment (Madheswaran and Attewell 2010). A correspondence test conducted as a field experiment by Thorat and Attewell (2010) finds substantial evidence of exclusion of Dalits from employment in urban India, putting the lie to the notion that casteism is a phenomenon that increasingly is confined to the more intimate communities of rural India. Indeed, the same study demonstrates the existence of even higher levels of discrimination directed against Muslims. Furthermore, Deshpande's and Newman's (2010) study of university students finds that a prejudicial climate envelops Dalit students while they are at university and continues to disadvantage them when they seek employment after completing their degrees. 12. The Caribbean has a long history of privileging persons who phenotypically are more likely to be identified as white (Williams 1942). Olsen and Coppin (2001) analyzed data from Trinidad and Tobago's 1993 Continuous Sample Survey (CSS) and found that this was still the case at the time of their study. About 40 percent of the respondents in the 1993 CSS were persons reporting African ancestry, about 40 percent reported East Indian ancestry, and the remaining 20 percent were classified by the researchers in an Other Ethnicities category (these included persons reporting British, Chinese, Syrian, Lebanese, and mixed race ancestry). Olsen and Coppin found that African and Indian ancestry males averaged 75 cents and 64 cents respectively per every dollar earned by men of Other Ethnicities, while African ancestry and East Indian ancestry women averaged 77 cents and 70 cents respectively per every dollar earned by women of Other Ethnicities. A substantial portion of the gap could not be explained by human capital or other non-ascriptive factors valued in labor markets; hence Olsen and Coppin found prima facie evidence of discrimination in employment in Trinidad and Tobago in It is noteworthy that there were substantial intergender disparities that also could not be explained by gender differences in human capital or other non-

5 ascriptive factors valued in labor markets. 13. Patrick Mason (2011) utilizing data from Jamaica's 2001 Population and Housing Census found that women earned 17 percent less than men with the same number of years of education and work experience. He also found that there were enormous racial premiums for non-blacks. Specifically Chinese workers received 29 percent higher earnings than black workers with comparable education and experience, while whites received a 42 percent wage premium and mixed race persons received an 8 percent premium. These privileged earnings positions can be labeled examples of racial nepotism, the other side of the coin of racial discrimination. 14. Ethnoracial distinctions and disparities have been implicated in rising intercommunal conflict, potentially leading to slower economic growth and a decline in the quality of governance (Sriskandarajah 2005, Chen 2010). In the extreme, when interethnic hostilities devolve into civil war and genocidal violence, they can produce not only horrific murders but negative rates of economic growth, e.g. Rwanda and Burundi circa The French-English ethnic divide in Canada has threatened on a number of occasions to lead to partition of that country. Greater India, of course, was partitioned into India and Pakistan at the time of independence from the UK -- a partition prompted by growing Muslim-Hindu antagonisms and the failure of the new Indian Constitution to provide adequate protections for the Muslim minority's political participation in the post- Independence republic. Negotiated redistributions may deflect the most horrific outcomes. An example is the introduction of the New Economic Policy in Malaysia in the aftermath of the communal riots in 1969, a policy that included an affirmative action program on behalf of the native Malays. But those measures themselves may become the source of heightened interethnic tensions (Sriskandarajah 2005 p.70). 15. In a world economy with increasing human mobility and high speed communication, migration patterns may lead communities of persons from a shared country of origin to reproduce the patterns of intergroup inequality that prevailed in their home country in the receiving country. Davila, Mora, and Stockly (2011) label this phenomenon "imported stratification". They introduced this concept to characterize Latino immigrants to the United States carrying their marked preference for whiteness in the process of migration there. But the concept can apply quite appropriately to the presence of significant levels of anti-dalit caste discrimination within the East Indian community in the UK. Not only must the discriminatory practices of the receiving country itself be an object of attention, but also the discriminatory practices of immigrant communities retained from their countries of origin. 16. Existing remedies for intergroup disparity include not only affirmative action in employment but also diversity promotion, representational quotas in national or state legislatures for historically excluded groups. educational reforms, and racially or ethnically targeted wealth redistribution measures. The CPA should examine which types of policies are the most effective in addressing intergroup disparity without

6 provoking dangerous levels of intergroup animosity. Are there new forms of affirmative action that may be more successful? Are there policies that are not group specific that can benefit disproportionately the group in the disadvantaged position like, for example, an employment guarantee for all citizens? To what extent do policies need to be tailored to the specific historical conditions of a particular region or country? To what extent can the members of the CPA usefully adopt policies that are collaborative across a region or multiple countries? 17. Addressing intergroup disparities requires information. The countries in the CPA should commit to collecting the data that will facilitate the development of informed and wise policy. Data should be gathered not only about self-reported race, ethnicity, caste or religious affiliation, but the interviewer should report on the same dimension of the individual's characteristics as well as the individual's phenotype (especially skin shade). The latter will provide information on how the individual is socially classified or perceived by others, which is a more salient indicator of their treatment than their personal self-classification. 18. A final cautionary note: While it is useful to gather information on individuals' perceptions of whether they have been exposed to discrimination, self-reports of discrimination are subject to respondent self-censorship, cognitive dissonance or sheer error. Coleman et al. (2008) compared independently derived estimates of the degree of wage discrimination against individual self-reports of wage discrimination in a US data set and found that blacks substantially underreported their exposure to wage discrimination while whites substantially overreported their exposure. Therefore, it is vital to generate data that enables analysts to detect the presence of discrimination independent of the individual's perception. References Algan, Yann; Christian Dustmann, Albrecht Glitz, and Allan Manning (2010) The Economic Situation of First and Second-Generation Immigrants in France, Germany, and the United Kingodom" The Economic Journal 120:542 pp.f4-f30. Blackaby, D.H.; D.G. Leslie, P.D. Murphy, and N.C. O'Leary (2002) "White/Ethnic Minority Earnings and Employment Differentials in Britain: Evidence from the LFS" Oxford Economic Papers 54:2 pp Burton, Jonathan, Alita Nandi, and Lucina Platt Measuring Ethnicity: Challenges and Opportunities for Survey Research Ethnic and Racial Studies 33: pp Chiswick, Barry (1980) "The Earnings of White and Coloured Male Immigrants in Britain" Economica 47:185 pp Coleman, Major G., W.A. Darity Jr., and Rhonda V. Sharpe (2008) Are Reports of Discrimination Valid?: Considering the Moral Hazard Effect American Journal of Economics and

7 Sociology 67:2 pp Darity, W.A., Jr. (2010) Racism and Colorism in Post Racial Societies in Laurence Bond, Frances McGinnity, and Helen Russell (eds.) Making Equality Count: Irish and International Research Measuring Equality and Discrimination Dublin: Liffey Press pp Davila, Alberto; Marie Mora, and Sue Stockly (2011) "Does Mestizaje Matter in the US? Economic Stratification of Mexican Immigrants?" American Economic Review 101:3 pp , Deshpande, Ashwini and Katherine Newman (2010) Where the Path Leads: the Role of Caste in Post-University Employment Expectations in Sukhadeo Thorat and Katherine S. Newman (eds.) Blocked by Caste: Economic Discriminiation in Modern India New Delhi: Oxford University Press pp Dex, Shirley (1986) "Earnings Differentials of Second Generation West Indian and White School Leavers in Britain" Manchester School No.2 pp Hoff, Karla and Priyanka Pandey (2006) Discrimination, Social Identity and Durable Identities American Economic Review 96:2 pp Madheswaran, S. and Paul Attewell (2010) Wage and Job Discrimination in the Indian Urban Labour Market in Sukhadeo Thorat and Katherine S. Newman (eds.) Blocked by Caste: Economic Discriminiation in Modern India New Delhi: Oxford University Press pp Mason, Patrick L. (2011) "Earnings Inequality in the Jamaican Labor Market: Race, Ethnicity, and Education", unpublished manuscript, Department of Economics, Florida State University. McIntosh, Neil J. and David J. Smith (1974) The Extent of Racial Discrimination 40, Broadsheet No.547 London: PEP. Mincy, Ronald, Monique Jethwani-Keyser, and Eva C. Haldane with Hillard Pouncy (2011) Race: Now You See It, Now You Don t Columbia University Policy Brief 1:4. Nazroo, J.Y. (2003) The Structuring of Ethnic Inequalities in Health: Economic Position, Racial Discrimination, and Racism American Journal of Public Health 93: Olsen, R.N. and Addington Coppin (2001) "The Determinants of Gender Differences in Income in Trinidad and Tobago" Journal of Development Studies 37:5 pp Riach, Peter and Judith Rich ( ) "Measuring Discrimination By Direct Experimental Methods: Seeking Gunsmoke" Journal of PostKeynesian Economics 14:2

8 pp Sapa (2010) SA s Overriding Problem Is Unemployment Times Live July 19. Sen, Amartya K. (1997) "From Income Inequality to Economic Inequality" Soutnern Economic Journal 69: Sherer, George (2000) Intergroup Economic Inequality in South Africa: The Post- Apartheid Era American Economic Review 90:2 pp Skriskandarajah, Dhananjayan (2005) Development, Inequality and Ethnic Accomodation: Clues from Malaysia, Mauritius and Trinidad and Tobago Oxford Development Studies 33:1 pp Stelcner, Morton (2003) "Earnings Differentials Among Ethnic Groups in Canada: A Review of the Research" in William Darity Jr. and Ashwini Deshpande (eds.) Boundaries of Clan and Color: Transnational Comparisons of Inter-group Disparity London: Routledge pp Stewart, Mark B. (1983) "Racial Discrimination and Occupational Attainment in Britain" The Economic Journal 93:371 pp Thorat, Sukhadeo and Paul Attewell (2010) The Legacy of Social Exclusion: A Correspondence Study of Job Discrimination in India s Urban Labour Market in Sukhadeo Thorat and Katherine S. Newman (eds.) Blocked by Caste: Economic Discriminiation in Modern India New Delhi: Oxford University Press pp UNDP (United Nations Development Program) Human Development Report 1994, New York: Oxford University Press. Uwaifo Oyelere, Ruth "Africa's Education Enigma? The Nigerian Story" Journal of Development Economics 91:1 pp Williams, Eric (1942) The Negro in the Caribbean Washington DC: The Associates in Negro Folk Education.

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