Boundaries of Clan and Color
Economic disparity between ethnic and racial groups is a ubiquitous and pervasive phenomenon internationally. Gaps between groups encompass employment, wage, occupational status and wealth differentials. Virtually every nation includes a group whose material well-being is sharply depressed in comparison with another, socially dominant, group. This collection is a cross-national, comparative investigation of the patterns and dynamics of inter-group economic inequality. A wide range of respected experts discuss issues such as: ●
● ●
an array of groups from the Burakumin in Japan to the scheduled castes and tribes in India policy attempts to remedy inter-group inequality race and labor market outcomes in Brazil.
Under the editorship of William Darity, Jr. and Ashwini Deshpande this collection forms an important book that will be of interest to students and academics involved in racial studies, the economics of discrimination and labor economics as well as being very useful to policy makers the world over. William Darity, Jr. is Cary C. Boshamer Professor of Economics and Director of the Institute of African American Research at the University of North Carolina at Chapel Hill as well as Research Professor of Public Policy Studies at Duke University. Ashwini Deshpande is Assistant Professor of Economics at the Delhi School of Economics, University of Delhi.
Advances in Social Economics Edited by John B. Davis Marquette University
This series presents new advances and developments in social economics thinking on a variety of subjects that concern the link between social values and economics. Need, justice and equity, gender, cooperation, work poverty, the environment, class, institutions, public policy and methodology are some of the most important themes. Among the orientations of the authors are social economist, institutionalist, humanist, solidarist, cooperatist, radical and Marxist, feminist, post-Keynesian, behaviouralist, and environmentalist. The series offers new contributions from today’s most foremost thinkers on the social character of the economy. Published in conjunction with the Association of Social Economics. Books published in the series include: Social Economics Premises, findings and policies Edited by Edward J. O’Boyle The Environmental Consequences of Growth Steady-state economics as an alternative to ecological decline Douglas Booth The Human Firm A socio-economic analysis of its behaviour and potential in a new economic age John Tomer Economics for the Common Good Two centuries of economic thought in the humanist tradition Mark A. Lutz Working Time International trends, theory and policy perspectives Edited by Lonnie Golden and Deborah M. Figart The Social Economics of Health Care John Davis Reclaiming Evolution A Marxist institutionalist dialogue on social change William M. Dugger and Howard J. Sherman The Theory of the Individual in Economics Identity and value John Davis Boundaries of Clan and Color Transnational comparisons of inter-group disparity Edited by William Darity, Jr. and Ashwini Deshpande
Boundaries of Clan and Color Transnational comparisons of inter-group disparity
Edited by William Darity, Jr. and Ashwini Deshpande
To William A. Darity, Sr. and Evangeline Royal Darity, my parents, who consistently worked to widen the boundaries facing my sister and myself William Darity, Jr.
Dedicated to the memory of my grandparents, Dr Purushottam Narahar and Ashatai Deshpande, who questioned boundaries and rejected them Ashwini Deshpande
First published 2003 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group
This edition published in the Taylor and Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” © 2003 editorial matter and selection William Darity, Jr. and Ashwini Deshpande; individual chapters, the contributors All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Boundaries of Clan and Color : transnational comparisons of inter-group disparity / [edited by] William Darity, Jr. & Ashwini Deshpande. p. cm. – (Advances in social economics) Includes bibliographical references and index. 1. Income distribution–Case studies. 2. Equality–Economic aspects–Case studies. 3. Ethnic groups–Economic conditions–Case studies. 4. Race–Economic aspects–Case studies. I. Darity, William A., 1953– II. Deshpande, Ashwini, 1965– III. Series. HC79 .I5B665 2003 331.6–dc21
2002037066
ISBN 0-203-98771-3 Master e-book ISBN
ISBN 0-415-27395-1 (Print Edition)
Contents
List of illustrations Notes on contributors Acknowledgments 1
Boundaries of clan and color: an introduction
vii ix xi 1
ASHWINI DESHPANDE AND WILLIAM DARITY, JR.
2
Race, gender and regional labor market inequalities in Brazil
14
PEGGY A. LOVELL
3
Earnings differentials among ethnic groups in Canada: a review of the research
27
MORTON A. STELCNER
4
Understanding recent empirical evidence on race and labor market outcomes in the USA
52
PATRICK L. MASON
5
If not reconciliation, then what? Race and the “stolen generation” in Australia
70
SAMUEL L. MYERS, JR.
6
Multiracialism and meritocracy: Singapore’s approach to race and inequality
93
R. QUINN MOORE
7
Recasting economic inequality ASHWINI DESHPANDE
112
vi
Contents
8
The mobility of Japan’s Burakumin: militant advocacy and government response
130
JACOB MEERMAN
9
Malaysia’s New Economic Policy: has it been a success?
152
FARIDAH JAMALUDIN
Index
175
Illustrations
Figures 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9
Aboriginal and Torres Strait Islander population in Australia, 1971–96 Percentage of Australians unemployed, aged 15 and over, 1971–91 Percentage of Australians not in the labor force, aged 15 and over, 1971–91 Ratio of Aboriginal to total percentage unemployed, 1971–91 Indigenous to non-Indigenous income ratios, 1980 and 1990 Indigenous to non-Indigenous income ratios, Northern Territory, 1991 and 1996 Is acknowledgment of prior wrongs a necessary condition for reconciliation? Is an official apology required for reconciliation? Is compensation for prior wrongs required for reconciliation?
73 74 75 76 76 77 81 82 82
Tables 1.1 2.1 2.2
Ranking of countries by selected indicators, 2000 Regional distribution of the population by race, Brazil, 1890–1991 Selected indicators by color and sex, workers aged 18–64, urban São Paulo and Bahía, 1991 2.3 Occupational distribution by color and sex, workers aged 18–64, urban São Paulo and Bahía, 1991 2.4 Average monthly wage by color and sex, workers aged 18–64, urban São Paulo and Bahía, 1991 2.5 Average monthly wage by years of completed schooling, color and sex, workers aged 18–64, urban São Paulo and Bahía, 1991 2.6 Decomposition of average wage differentials by color and sex, workers aged 18–64, urban São Paulo and Bahía, 1980, 1991 3.1A Population by ethnic origins for selected years, Canada, 1871–1951
3 16 18 19 20 21 23 29
viii Illustrations 3. lB Population by ethnic origins for selected years, Canada, 1871–1951 3. 1C Percentage distribution, 1961–91 3.1D Distribution (000), 1961–91 3A.1 Ethnic origins, definitions 4.1 Probability that a worker is offered an above-average wage 4.2 Duncan Index of occupational status for African American men, 1880–1990 6.1 Household monthly income in Singapore dollars and ratio to Chinese monthly income by race, 1980 and 1990 6.2 Household type, household size, and household ownership by race, 1980 and 1990 6.3 Streaming exam pass rates by race, 1987, 1990, and 1993 8.1 Educational achievement, Buraku population and all-Japan, 1976 8.2 Selected survey results, Burakumin compared to total population, 1993 8.3 Highest level of education attained by Dowa-district Burakumin (1993) and total population (1990) 8.4 Highest level of education attained by Dowa-district Burakumin (1993) and all-Japan (1990), by age groups 9.1 Race, poverty, and family income 9.2 Incidence of poverty, 1957–87 9.3 Peninsular Malaysia: poverty levels according to urban–rura1 areas, 1970, 1976, 1984 9.4 Peninsular Malaysia: Gini coefficients, 1970–87 9.5 Ownership of share capital in limited companies, 1970–90 9.6 Peninsular Malaysia: average monthly household income according to ethnic groupings, 1979 and 1984 9.7 Poverty rate as a percentage of total households, 1995 9.8 Annual growth rate of share capital ownership of limited companies, 1990 and 1995 9.9 Racial composition of University students, 1966–7 and 1985 9.10 Malay median income as a percentage of Chinese median income, 1970–84
30 32 33 46 59 63 95 101 103 134 135 135 135 154 157 158 159 160 160 162 163 165 167
Notes on contributors
William Darity, Jr. is the Cary C. Boshamer Professor of Economics at the University of North Carolina at Chapel Hill and Director of the Institute of African American Research. His research interests include racial and ethnic economic inequality, North–South models of trade and growth, interpreting Keynes, the economics of the Atlantic slave trade and the social–psychological effects of exposure to unemployment. He has published over 125 articles in professional journals and authored or edited seven books. His most recent book, coauthored with Samuel Myers, Jr. is Persistent Disparity: Racial Economic Inequality in the United States Since 1945 (1998). His avocations include playing blues harmonica, reading science fiction, and coaching youth sports in Durham, NC. Ashwini Deshpande is Assistant Professor of Economics at the Delhi School of Economics, University of Delhi. Her research interests include international debt and capital flows, economics of discrimination and inequality and inter-group disparity, with special reference to caste and gender. She has published articles in several leading professional journals. Faridah Jamaludin earned her undergraduate degree from the University of Edinburgh in 1999 and subsequently did postgraduate study at the University of London. During the 1997–8 academic year she was an exchange student at the University of North Carolina at Chapel Hill where she first became engaged in comparative research on inter-group disparity across countries, which led, in turn, to her detailed investigation of racial–ethnic economic differences in her native Malaysia. Peggy A. Lovell is an Associate Professor of Sociology and Latin American Studies at the University of Pittsburgh. She has conducted fieldwork in Mexico and Brazil and previously taught at the Centro de Desenvolvimento e Planejamento Regional, Federal University of Minas Gerais, Belo Horizonte, Brazil. She has published widely on issues of race and gender inequality in the Brazilian labor market. Her current research includes a comparative study of women in Brazil and the USA and a longitudinal study of social change and inequality in Brazil. Patrick L. Mason is Associate Professor of Economics at Florida State University. His areas of interest include racial inequality, educational attainment, income distribution, unemployment, economics of identity, family environment and socio-economic well-being and transitions in family structure and public policy. He has published a large number of professional
x Notes on contributors journal articles, book chapters in edited volumes and professional studies. He is currently working on a manuscript entitled Reproducing Inequality: Family, Education, and Persistent Racial Discrimination. Other books include African Americans, Labor, and Society: Organizing for a New Agenda and Race, Markets, and Social Outcomes (co-edited with Rhonda Williams). Jacob Meerman has had a career in development with the World Bank, USAID and the Harvard Institute for International Development. He has done extensive work in rural development of Africa and evaluation of Bank programs in agricultural structural adjustment. His earlier experience includes work in Latin America and Southeast Asia. He has been Adjunct Professor and Visiting Scholar at Johns Hopkins University, School of Advanced International Studies. His current research is on the economic mobility of four low-status minorities. He is the author of Public Expenditures in Malaysia: Who Benefits and Why (Oxford University Press, 1979), Reforming Agriculture, the World Bank Goes to Market (World Bank, 1996); and one of the authors of the “Berg Report” on Accelerated Development in Africa (World Bank, 1981). R. Quinn Moore is a doctoral candidate in the Department of Economics at the University of Michigan. His research on race and inequality in Singapore was conducted at the National University of Singapore with a Fulbright Graduate Research Grant. Samuel L. Myers, Jr. is the Roy Wilkins Professor of Human Relations and Social Justice and Director of the Roy Wilkins Center of Human Relations and Social Justice at the Hubert H. Humphrey Institute of Public Affairs, University of Minnesota. Myers has pioneered the use of applied econometric techniques to examine racial disparities in crime, credit markets, education, mortgage lending, and employment. A graduate of Morgan State University, he received his PhD in economics from the Massachusetts Institute of Technology. He is the past president of the Association for Public Policy Analysis and Management (APPAM). Myers has published seven books and more than 100 articles in peer review journals, essays and book chapters. Morton A. Stelcner (1943–2000) was a Full Professor of Economics at Concordia University, Montreal, Quebec. He earned his PhD in economics from the Maxwell School, Syracuse University. His research interests included: labor supply of married women, gender earnings differences, and earnings disparities among Canadian ethnic/linguistic groups. His professional career included long-term appointments with the World Bank and consultancy positions with the Canadian International Development Agency. His research has also addressed labor market issues in Brazil, Chile, the Côte d’Ivoire, Cyprus, Peru, and Turkey. His publications include articles in reputed journals in economics and sociology, as well chapters in books and reports.
Acknowledgments
We are grateful to John Davis, Editor, Review of Social Economy, for inviting us to edit the special issue on cross-national comparisons of inter-group disparity. The idea for this volume emerged out of that issue and would not have seen the light of day without his encouragement. Between the appearance of the 2000 special issue and this volume, we lost a dear colleague and one of the contributors to this volume, Morton Stelcner. We will miss his humor and his unflagging commitment to intellectual honesty and social justice. William Darity, Jr. would like to thank Kirsten, Aden, and William, his immediate family, who constantly prod and challenge him to think rigorously about the impact of constructions of race and ethnicity on their daily lives. He also would like to thank his secretary, Sarah Mason, who has worked with him in friendship for twenty years, and who has always had the courage to bypass the conventional boundaries established in the American South. Ashwini Deshpande would like to thank her father, G. P. Deshpande, for comments on the “race versus caste” debate and her family for putting up with erratic work schedules. An earlier version of Chapter 3 was presented at the Allied Social Science Association meetings in New York in January 1999. The author is grateful to Amanda Benchimol, Matthew Glick, Gwenn Hughes, Natasha Joyal, and Alica Robb for their constructive criticisms and suggestions. Every effort has been made to trace copyright holders for permission to reproduce these chapters. Any omissions brought to our attention will be remedied in future editions. William Darity, Jr. Ashwini Deshpande
1
Boundaries of clan and color An introduction Ashwini Deshpande and William Darity, Jr.
Inter-group economic inequality This volume has evolved out of a special issue of the Review of Social Economy that we edited in 2000.1 Our interest in understanding patterns of ethnic economic inequality across countries prompted us to look for comparative studies and it turns out there is a small but growing body of work (see Nesiah 1997; Darity 1998; Darity and Deshpande 2000; Darity and Nembhard 2000). Eight general findings have emerged from these studies (Table 1.1 summarizes some of these points for a selected group of countries with welldocumented inter-group disparity): 1
2
3
Countries with a lower general level of income inequality do not necessarily display lower levels of inter-group inequality. For instance, both Brazil, South Africa and Malaysia with high overall inequality levels on the one hand, and Canada, India, Australia and Israel with low overall inequality levels on the other have substantial inter-group inequality. Inter-group disparity is persistent and significant in countries at all levels of development, whether “development” is measured narrowly by per capita income or more broadly by an index of well-being such as the Human Development Index (HDI). Whether they are “high”-HDI countries (0.8 and above) such as Australia, Canada, Croatia, Israel, Japan, New Zealand, Singapore, Trinidad and Tobago, the UK, and the USA, or “medium”-HDI countries (0.5–0.799) such as Belize, India, Lebanon, Malaysia, South Africa, Sri Lanka, and Zimbabwe, or “low”HDI countries (below 0.5) such as Rwanda, Ethiopia, and Eritrea: all have significant inter-group disparities. Greater gender equity is not generally associated with lower levels of inter-group inequality. As Table 1.1 demonstrates, the selected group of countries has very diverse ranks in the Gender-Related Development Index (GDI), going from 5 for Canada to 135 for Rwanda. The Gender Empowerment Measure (GEM) is another measure that captures aspects of empowerment of women. There are gaps in the data series for the GEM, but whatever data are available display the same diversity as the GDI.
2 Ashwini Deshpande and William Darity, Jr. 4
5
6
7
Higher rates of economic growth do not invariably close economic gaps between racial and ethnic groups, nor does lower economic growth inevitably widen the gap. Neither Malaysia, a country that experienced a high average rate of growth between 1975 and 1995, nor South Africa, a country that experienced a negative rate of growth over the same period, demonstrated an inverse movement in the degree of intergroup disparity. Inter-group division at sufficiently high levels of tension to produce civil war conditions or genocidal violence is obviously inimical to economic development, but the mere fact of inter-group economic inequality is not. This is clear from the experience of the high-income, high-HDI countries that have managed to achieve high levels of economic development despite significant inter-group disparity. In all countries where statistical investigations have been undertaken to assess the presence of discrimination in employment markets, substantial evidence of discriminatory losses in earnings and occupational status against a subaltern group is detected. In societies where group distinctions are borne by phenotypical markers, such as color, as in the USA, identifying members of a subaltern group, e.g. the black minority, may be easier than in other countries, such as India, where there are multiple groups subjected to subaltern status. For instance, if religion is used as the group identifier, then there is evidence of discrimination against minority religions such as Islam and Christianity. But if caste is used as a group marker, then the focus shifts to disparity within India’s dominant religious group (Hinduism), and there is evidence of discriminatory losses against lower castes. This complicates the picture, but the overall statement – that subaltern groups face discriminatory losses in labour markets – remains valid. The picture also is beset by complicating subtleties in the USA. By US standards, although phenotype has never been as decisive as genotype (the so-called one-drop rule: “one drop of African blood makes you black”), American racial boundaries, seemingly based upon fixed and absolute criteria in laws governing race, did not prevent many persons of recent African ancestry from passing over to the “white” category if they were sufficiently light-skinned. Some clusters of persons of recent African ancestry simply declared themselves to be native American tribal groups, rather than be classified as black.2 Others whose phenotypical attributes would have allowed them to “go for white” have chosen to be identified as black. Therefore, whereas charting racial identity in the USA may be easier for the detached observer than charting caste identity in India, it is not necessarily easy to do either. And it would probably be impossible for the detached observer in Rwanda or Burundi to determine who is Hutu and who is Tutsi. But black identity is unequivocally associated with lower economic status in the USA, just as low-caste affiliation is unequivocally associated with lower economic status in India. Cross-national evidence does not indicate that employment discrimi-
Introduction
8
3
nation necessarily declines over time, even in strongly market-oriented economies. Labor market studies in Brazil, the USA after 1975, Canada, and even post-apartheid South Africa do not provide evidence of a consistent decline in measured discrimination against subaltern groups. Adoption and implementation of remedies for inter-group disparity, such as affirmative action programs, have not proven sufficient to close the gap anywhere, but there is good evidence to suggest that the gaps would be even wider in the absence of such programs. Consider, for instance, the counter-example of Nepal, which is an official Hindu nation that has no affirmative action for low castes. Here, the low castes and Muslims are seriously under-represented in higher education and the upper end of the employment spectrum. These minority groups do not have a middle class comparable to India that has been created owing to affirmative action policies in education and public employment.
Table 1.1 Ranking of countries by selected indicators, 2000 Country
HDI
GNP per capita
GDI rank
GEM rank
Gini coefficient
Canada Australia United States Japan United Kingdom Israel Croatia Trinidad and Tobago Singapore Malaysia Brazil Sri Lanka South Africa India Belize Lebanon Zimbabwe Rwanda Ethiopia Eritrea
High High High High High High High High High Medium Medium Medium Medium Medium Medium Medium Medium Low Low Low
High High High High High High Middle Middle High Middle Middle Middle Middle Low Middle Middle Low Low Low Low
5 1 6 11 10 22 43 45 24 54 64 70 88 105 58 69 107 135 142 133
7 10 11 32 16 22 33 21 23 43 n.a. 64 n.a. n.a. 45 n.a. n.a. n.a. n.a. n.a.
31.5 35.2 40.8 24.8 36.8 38.1 29 40.3 n.a. 49.2 60.7 34.4 59.3 37.8 n.a. n.a. 50.1 28.9 40 n.a.
Source: Human Development Report, 2002, various pages. Notes High-income = GNP per capita of $9,266 or more in 2000. Middle-income = GNP per capita of $756–9,265 in 2000. Low-income = GNP per capita of $755 or less in 2000. GDI = Gender-Related Development Index: a composite index measuring average achievement in the three basic dimensions captured in the HDI – a long and healthy life, knowledge and a decent standard of living adjusted to account for the inequalities between men and women. GEM = a composite index measuring gender inequality in three basic dimensions of empowerment – Economic participation and decision making, Political participation and Decision making and power over economic resources.
4 Ashwini Deshpande and William Darity, Jr. One phase of the comparative inquiry involves construction of and examination of international cross-section, cross-country macro-level data on a variety of country characteristics and on group economic differences within each country. A second phase of the comparative inquiry involves development of increasingly detailed and accurate accounts of intergroup disparity for each country. We believe that both phases feed into each other to produce a nuanced account of inter group disparity across countries. In the special issue of the Review of Social Economy we addressed the second phase. Through this volume, we hope to further strengthen that quest.
Why clan and color? It would be in order, at this stage, to elaborate a little on the title of this volume, “Boundaries of clan and color.” Group disparities are not based on skin color in all parts of the world. In Western Europe and in the Americas, particularly North America, skin color (and phenotype), or what is popularly known as “race,” forms the basis of group disparities. Even though it is established that there is greater variation in phenotype and appearance within so-called “races” than between them, the concept of race has proved to be a powerful tool that is used to keep the minorities in these societies segregated, discriminated against and oppressed.3 In a country that celebrates its multiculturalism, Canada’s use of the term “visible minorities” makes this distinction explicit. Visible are those whose skin color is not white; the 1986 Employment Equity Act designated the visible minorities and other groups such as women and disabled persons as facing discrimination in the labor market. As Chapter 3 by the late Morton Stelcner in this volume demonstrates, the racial/ethnic differentiation picture in Canada is complex and the single umbrella term of “visible minorities” does not capture the multifaceted nature of discrimination in the labor market. However, the fact remains that skin color or race forms a crucial group marker. Racism or color-based disparity and discrimination in another big country of North America, the USA, is more well-known internationally. Large parts of Europe, notably Western Europe, and South America, exhibit similar color-based disparities, with racism being a major economic and social problem. However, not all ethnic disparities and conflicts are based on skin color. Take, for instance, conflicts that have been particularly bloody and violent such as those in Rwanda, Sri Lanka, Israel or the Ethiopian conflict that led to the formation of Eritrea. In fact, in African countries where a group of European descent is not involved, ethnic conflicts are between groups whose identities are not based on skin color. Indeed, even inside Europe, the Balkan crisis did not originate in race-based conflicts. In both Singapore and Malaysia, the subject matter of Chapters 6 and 9 in this volume, inter-group disparity is based on national origins. Thus, in non-color-based societies, the conflicting groups are not defined on the basis of skin color or race but upon other social categories – religion, nationality or other ethnic groupings. In
Introduction
5
such societies skin color is considered more an individual attribute than a group characteristic. Thus, it is entirely possible that in these societies individual distinctions in skin color are noticed or might be considered an attribute of beauty, but the defining character of social groups is not their common skin color. Of course, in such societies, there are internally understood or recognized markers to distinguish members of racial or ethnic groups. These markers may not always provide correct signals, but they are the operating guidelines in their particular social context. Rwandans and Burundians generally will claim they can tell who is what based on various social markers. In Japan the Burakumin typically were identified by their mode of speaking/dress, since they lived for many years in segregated communities. Jacob Meerman, in Chapter 8 in this volume, suggests that with the dispersal of the Burakumin ghettos Japan may experience a dissolution of the Buraku identity. That may be true, but will it also mean that the inequalities besetting persons of Buraku ancestry, people scarred by Japan’s history of degrading them, will disappear while they still carry the legacy of deprivation? These questions point to the complexity of this issue. India is a compelling country in that the definitions of group identity are multifaceted, as we have already seen. Thus, to talk in terms of a single majority or a dominant group that is in conflict with one or several subaltern groups is not very meaningful in understanding the totality of group divisions in the country. To go back to the two examples that we referred to earlier, within Hinduism caste is an important group identifier (Chapter 7 in this volume is focused on inter-caste disparity). In this context, the subaltern groups would be the low castes. However, as we go to press, India is still emerging from the aftermath of one of the worst instances of communal carnage in its history, where forces claiming to represent the majority religion (Hinduism) went on a rampage against Muslims, a small but significant minority. Here, the majority comprises all Hindus (including low castes) pitted against the subaltern Muslim community. In addition, linguistic groups, regional groups and women all add layers of complexity to the meaning of inter group disparity that makes straightforward generalizations impossible.
Race and caste Another reason makes India of special interest. The caste system has fascinated western scholarship, which has often seen direct parallels between racial divisions in color-segregated societies and caste divisions in India. While several of the manifestations of racism and casteism are identical, especially towards those at the receiving end, we would like to suggest that there are fundamental differences between “race” and caste as social categories.4 We use the word “race” in a qualified sense: modern physical anthropology no longer subscribes to the popular typology of race. However, given the widespread use of the term and the fact that disparities in several societies are
6 Ashwini Deshpande and William Darity, Jr. “race”-based, a volume that discusses both race-based and caste-based disparities ought to devote some space to a discussion of “race and caste.” To begin with, the histories of the two systems differ greatly. Racism is a direct product of slavery under colonialism: the ascriptive differences between the slaves and their masters were extended to defining group characteristics. The negative stereotyping of blacks truly began with capitalism and was consolidated during colonialism. Caste, on the other hand, represents a system of social stratification that pre-dates colonialism by centuries. Therefore, for caste to be color-coded, there would have to be a strong historical basis. The history of present-day India does not in fact offer straightforward answers to why the caste system ought to be color-coded. The racial theory of Indian civilization is a formation of the late nineteenth century, when “in the wake of slave emancipation, white–black relations in the Anglo-Saxon world were being restructured with ideological support from a rush of racial essentialism” (Trautmann 1997: 208). Another reason that the theory is erroneous is that the Indus valley civilization predates the arrival of the Aryan-speaking people, so to argue that the Indian (sic) civilization is the product of the conflict between lighterskinned Aryans and darker-skinned aborigines is misleading. This racial theory was extended to the formulation of the racial theory of caste.5 One important basis of the racial theory of caste is that “Varna” (the ancient Indian caste divisions, see Chapter 7 in this volume for definitions) can be interpreted as skin color. However, there is no evidence to suggest that the “Varnas” are racially different among themselves. Trautmann (1997: 211) analyzes the British colonial quest: In this fantastic back-projection of systems of racial segregation in the American South and in South Africa onto early Indian history, the relations of the British “new invader from Europe” with the peoples of India is prefigured thousands of years before by the invading Aryans. But what the British encountered was not their Aryan bretheren, as Max Mueller wanted to have it, but a “mingled population” toward whom a supposed perduring prejudice of whites against interracial sexual relations (or rather a perduring mixture of repulsion and desire) structured those relations in a certain hypergamous way. B. R. Ambedkar, the most significant Dalit leader of the twentieth century, one of the foremost theorists on the caste question and author of the constitution of independent India, has investigated the origins of the caste system in great detail. His analysis of Vedic texts (Ambedkar 1970) firmly rejects the western racial theory of caste formation.6 He reiterates the point that Aryans were not a race. He points out that the word is pronounced in two different ways (one with a long “a” at the beginning and another with a short “a”) and the two words “Arya” mean several different things in the texts – including “enemy,” “respectable person,” “name for India,” “owner,” “Vaisya,”
Introduction
7
or “citizen” – none of which indicates a race. He finds no mention in the Rig Veda of an Aryan invasion and instead finds evidence of sporadic fighting between Aryas and Dasyus rather than a fully fledged conquest. Religion rather than racial animosity seems often to have been the cause of the conflict. He finds no evidence in support of the assertion that the Dasas (in the racial theory of caste, the presumed dark-skinned aborigines in contrast to the whiteskinned Aryans) were a different race or even of a different skin color. Given the historical complexities of the origins of the caste system, a detailed assessment is outside the scope of this Introduction; a few comments are, however, in order. First, the historical origins of the caste system are fuzzy and it is not conclusively established that a system of social stratification did not exist prior to the Aryan “invasion.” If something akin to the caste system existed among the generally dark-skinned aborigines, then skin color would have not been the basis for the various social distinctions. It also helps to remember that Aryans were truly speaking a linguistic group and not a “race” in the current sense of the term.7 The racial theory of caste proposes that the Brahman might have descended from the Aryan, thus explaining his superiority in the caste hierarchy. However, it is noteworthy that the Brahman was a professional priest without parallel in Aryan tradition elsewhere; in later India, he acquired virtual monopoly of almost all ritual (Kosambi 1985). Given centuries of migration and intermarriage, there is also no evidence of one particular group being established as the descendant of the Aryan-speaking people. The word “arya” or “arya putra” is sometimes found in the literature to refer to the royalty, who are not Brahmans but are typically Kshatriya (though not always; there have been important Sudra kings as well). To make the picture more complicated, Kosambi (1985) traces the pre-Aryan features of Brahmanism and also the non-Aryan descent of several Brahman castes. He suggests that the Brahman priest was an individual supported neither by the state nor the king, often on the tribal fringe. It is with his alliance with the warrior classes that the reorganization of the caste system begins. Kosambi links this to a “higher level of production, regular settlements, the inevitable decay of tribal organization with the rise of a new type of property” (1985: 107). Second, the presumed skin colors of the four varnas that are found in the nineteenth-century discourse are difficult to justify: white for Brahmans, red for Kshatriya, yellow for Vaisyas and black for Sudras. Klass (1980) suggests that varna may not refer to complexion or supposed skin color, but rather to some kind of spiritual coloration or aura (1980: 40). Ambedkar (1970) suggests several meanings of the word varna, one of which is class and finds the latter meaning more compeling than color. It is interesting to note that the Manusmriti, a text dated between the fourth century BC and the second century AD that outlines the basic differences between castes and sets forth a highly detailed caste code, has no reference to skin color as being the basis of the ranking of castes.8 Today there are close to 3,000 jatis (the contemporary caste divisions) in existence, and hence a jati–color link is virtually impossible to establish.
8 Ashwini Deshpande and William Darity, Jr. Third, the geographical variations in skin-shade differences in India seem to dominate the caste differences.9 India is a virtual ethnographic museum, as all the major “racial types,” the “Caucasian type,” the “Negroid type,” the “Mongoloid type,” and so forth can be seen in different regions of the country. As we have stated earlier, these grand racial aggregations are no longer accepted by physical anthropology but they persist in popular imagination and we mention them only to point out the regional diversity in phenotype to be found in India. Klass (1980) also points out how skin color and hair color lightens as one moves from the southeast to the northwest of the country and finds no reason to believe that this would have been otherwise 3,000 years ago. In its attempt to “prove” the racial theory of the Indian civilization, the British administration commissioned investigations into the distinctions in skin shade and phenotypical features (such as length of the nose, cephalic index, etc.). Herbert Hope Risley (1851–1911), a member of the Indian Civil Service who served in India from 1873 to 1910, was instrumental in concretizing the racial theory of caste in the 1901 Census Report (The People of India) and a journal article “The study of ethnology in India” (1891). One of Risley’s best-known statements is “the social position of a caste varies inversely as its nasal index.” Trautmann (1997) after a detailed review of contending theories and evidence, concludes that “both Risley and Max Mueller show a tendency to exaggerate the significance of noses in ancient Indian evidence” (Aryans presumably with long, lepto-rhine noses in conflict with a “black snub nosed – platyrhine – race”). Klass (1980) points to the near impossibility of determining with certainty what the skin color and phenotype a given group might have had 3,000–5,000 years ago. Ghurye (1932) summarizes the conclusions of Risley’s studies and reports that a systematic relationship between jati affiliation, skin color and phenotypical features cannot be drawn. He finds, for instance, that a brahman in Uttar Pradesh has more in common with a “chamar” (a Dalit caste) in Uttar Pradesh than with a Brahman in Kerala. The predominantly western persistence with the racial theory of caste has encouraged some contemporary investigations into the caste–color correlation, but they are not compeling for the simple reason that they focus on a very small sub-set of jatis in North India, leaving out of their investigation the vast majority of darker-skinned populations not only in the north and west but in the south and east of the country.10 Thus, jati is not ascriptive insofar as it is not possible to identify jati by simply looking at the individual. Often, though not always, jati is indicated by the last name (surname) of the person. However, naming conventions differ across the country: for instance, in the four southern states the first name is traditionally written last. Even when jati is indicated by the last name, since jatis are regional categories it is impossible to remember the exact placement of close to 3,000 categories. However, people have a way of ascertaining the jati of an individual if they want to – either directly or by discreet enquiry. But this requires some effort and a corresponding inclination, which is typically not made with respect to each person that one interacts with. Thus, while a racial
Introduction
9
affiliation is based upon physical characteristics, a caste affiliation is not, and hence is not immediately possible to decipher. In conclusion, one can say that skin shade does not form the basis for social stratification in Indian society, whereas caste does. Having said that, it is equally true that as in several other societies, a lighter skin (the word used in India is “fair” rather than “white”) is considered an attribute of beauty that earns a premium in the marriage market, but there is no socially recognized group of fair-skinned individuals in opposition to another group of darkerskinned ones.
Cross-national studies of inter-group disparity However, whether boundaries are of clan or of color, the end result, especially from the point of view of oppressed groups, is similar and equally serious across an otherwise diverse set of countries. That is what unites the chapters in this volume. While highlighting the similarities, the individual country studies present a nuanced understanding of inter-group disparity across countries, since group divisions in each society are rooted in their individual histories that are not uniform across the world. Two chapters deepen our knowledge of the empirical gaps between groups and the extent of estimated employment discrimination in Brazil and in Canada. Peggy Lovell’s Chapter 2 in this volume on Brazil consolidates the puncturing of the still popular myth, the myth of “racial democracy” – that Brazil is a country where inequality is solely a matter of social class and not race. France Twine’s superb ethnographic study, Racism in a Racial Democracy (1998), provides an effective qualitative demolition of the myth, while Lovell’s work provides the detailed quantitative dimension. Lovell demonstrates that sustained and significant disparities persist between Afro-Brazilians (both blacks and browns) and Euro-Brazilians or whites. She also demonstrates that employment discrimination is an important factor depressing the earnings and occupational attainment of both black and brown Brazilians and examines the spatial aspects of disparity and discrimination. In an earlier coauthored study, Morton Stelcner (Stelcner and Kyriazis 1995) examined earnings inequality by race and ethnicity in Canada using the 1981 Canadian census. Chapter 3 in this volume comprehensively reviews the existing literature on intergroup disparity in Canada based upon a variety of surveys, and updates the Stelcner–Kyriazis findings by utilizing the 1991 Census. A striking result is the persistence across both censuses of employment discrimination against blacks in Canada. The 1981 study lacked sufficient observations on Canada’s indigenous peoples to include them in the study; that omission is corrected in the 1991 census. It is notable that the 1994 World Development Report (UNDP 1994: 25–6, 32, 100) reports that the “aboriginal” population of Canada constitutes about 2.3 percent of the total, possesses a life expectancy 5–6 years lower than the rest of Canadians, and has
10 Ashwini Deshpande and William Darity, Jr. a real income one-third less than the rest of Canadians. Moreover, the unemployment rate among Aboriginals is twice as high as the rate for the average Canadian, and they are six times as likely to be murdered and far more likely to suffer from depression. Patrick Mason’s Chapter 4 in this volume, utilizing US data from the Panel Study on Income Dynamics (PSID), directs our attention to one of the central underlying assumptions of racism, the cognitive inferiority of members of a subaltern group. Mason challenges the position that the inter-racial gap in economic inequality in the USA can be explained fully by a black cognitive skills deficit. Mason’s finding that discrimination still plays an important role should not be shocking. Even in South Africa, where racial gaps in schooling are still so great even after the ending of apartheid (black mean years of schooling remain below six) that it would seem that maintenance of “white privilege” would not require exclusionary practices, researchers still find substantial evidence of market-based discriminatory losses in earnings for blacks (Treiman, McKeever and Fodor 1996; Hinks 1999). Two of the three remaining chapters in the volume focus on social policies aimed at addressing intergroup disparity, multiracial meritocracy in Singapore and the reconciliation process in Australia. In his Chapter 6, R. Quinn Moore has coined the phrase “multiracial meritocracy” to describe Singaporean policy-makers’ approach to racial inequality within their borders. The phrase connotes the surprising consonance Singaporean policy establishes between a simultaneous subscription to race consciousness and the meritocratic imperative. Proponents of the meritocratic principle in the USA and India argue that this is inconsistent with being color-conscious or casteconscious. Singaporean policy breaks with that dichotomy. Samuel Myers, Jr. in Chapter 5 examines the reconciliation process in Australia with an eye towards understanding its potential consequences for the stark disparities that exist between the aborigines and the rest of Australia’s population. Myers wonders whether reconciliation processes elsewhere – South Africa is another country that is undergoing such a process – will substantively alter the condition of the subaltern group. He specifically wonders whether that will be the case in Australia. He examines attitudes and beliefs of Australians that might support the status quo or permit conditions to be changed on behalf of Australia’s indigenous citizens. The volume has a chapter on India’s caste system (Chapter 7) by one of the two coeditors of the volume, Ashwini Deshpande. Elsewhere Deshpande (2000, 2001) has documented the magnitude and persistence of intercaste economic disparity in India. Here her task is theoretical. She critically reviews the economics literature that has attempted to explain the continuity and consequences of the caste system. Much of this literature bears a resemblance to the literature that has emerged on the economics of discrimination and raises some of the same questions. Some of this literature is more nuanced in seeking to establish the contours that distinguish the operation of Indian casteism for other systems of social domination based upon group identity.
Introduction
11
Jacob Meerman’s Chapter 8 on Japan illustrates yet another grave intergroup disparity that is not color-based. He analyses the disparity between the Buraku minority and the mainstream Japanese, groups that are genetically and culturally identical. Discrimination against the Burakumin persists in making them low-status and low-income. Meerman comprehensively documents facets of discrimination, disparity and segregation. The uniqueness of his chapter lies in linking this situation with an analysis of the militant advocacy of the Buraku Liberation League (BLL) and the complex interrelationship between the actions of the League and the Japanese government response. He reaches an interesting conclusion that, given the high mobility into and out of the Buraku, the Burakumin might be considered as a segment of a Japanese under-class, rather than successors to an historical out-caste. This raises interesting points of comparison with other countries – the dalits (low castes) in India have not yet reached this stage. Faridah Jamaludin’s Chapter 9 on Malaysia’s New Economic Policy (NEP) focuses attention on a unique form of affirmative action. Introduced in the 1970s, the NEP was designed, in addition to the reduction of poverty, to protect the economic interests of the indigenous Bumiputera community, and to reduce inter-racial inequality. While the disparity between the Chinese and the Malays is well documented and persistent, what is interesting is that a large part of the present-day Chinese and Indian populations are descendants of indentured labour that worked on the rubber plantations in the nineteenth century. The rise of an erstwhile subaltern group has now led to a situation where some form of protection for the indigenous group is essential to keep inter-ethnic disparity in check (a policy for the protection of sons-of-the-soil). As Jamaluddin’s Chapter 9 highlights, the success of this policy is crucially linked to the vagaries of globalization and its impact on the fortunes of the Malaysian economy, an issue about which all countries in the developing world need to be concerned. The eight chapters in this volume collectively expand our knowledge of the international dynamics of inter-group disparity. This is a research program in its relative infancy and these chapters may help it to begin to walk.
Notes 1 Review of Social Economy, 63:3. 2 See Jones (2001). 3 See, for instance, American Association of Physical Anthropologists, “AAPA Statement on Race,” American Journal of Physical Anthropology, 101, 1996, 569–70. 4 See Beteille (1971) for a concise and lucid review of the differences as well as the similarities between the two systems. 5 See Klass (1980) for an excellent critical review of the theories of the origins of the caste system. 6 Ambedkar summarizes the western racial theory of caste in the following way (and then proceeds to demolish it): i The people who created the Vedic literature belonged to the Aryan race.
12 Ashwini Deshpande and William Darity, Jr. ii This Aryan race came from outside India and invaded India. iii The natives of India were known as Dasas and Dasyus who were racially different from the Aryans. iv The Aryans were a white race. The Dasas and Dasyus were a dark race. v The Aryans conquered the Dasas and Dasyus. vi The Dasas and Dasyus after they were conquered and enslaved were called the Shudras. vii The Aryans cherished color prejudice and therefore formed the Chaturvarnya whereby they separated the white race from the black race such as the Dasas and the Dasyus (Ambedkar 1970: 57–8).
7
8 9 10
Ambedkar is scathing in his criticism of those who believe in this theory: “the theory is based on pleasing assumptions and inferences based on such assumptions . . . it is a perversion of scientific investigation. It is not allowed to evolve out of facts. On the contrary, the theory is preconceived and facts are selected to prove it” (1970:73–4). Trautmann argues that the notion of the “Aryan Race” was created by the German Sanskritist Friedrich Max Mueller in the nineteenth century. While he consistently advocated the brotherhood of the Aryan peoples, the kinship between Indians and Europeans, he never visited India. For a critical account of his two race theory of India, see Trautmann (1997), Chapter 6. See “The Laws of Manu,” trans G. Buehler, Sacred Books of the East, 25, ed. M. Mueller (Motilal Banarsidass, Delhi, 1964). See the introduction to NFHS–I (1995) for broad geographical patterns. See Das and Mukherjee (1963); Jawal (1979).
References Ambedkar, B. R. (1970) Who Were the Shudras? How They Came to be the Fourth Varna in the Indo-Aryan Society, Thackers, Bombay. American Association of Physical Anthropologists (1996) “AAPA Statement on Race,” American Journal of Physical Anthropology, 101, 569–70. Beteille, D. (1971) “Race, Caste and Ethnic Identity,” International Social Science Journal, 23: 4, 519–35. Darity, W., Jr (1998) “Intergroup Disparity: Economic Theory and Social Science Evidence,” Southern Economic Journal 64: 4, 805–26. Darity, W., Jr and A. Deshpande (2000) “Tracing the Divide: Intergroup Disparity Across Countries,” Eastern Economic Journal 26: 1, Winter, 75–85. Darity, W., Jr and J. Nembhard (2000) “Racial and Ethnic Economic Inequality: The International Record,” American Economic Review, Papers and Proceedings, 90: 2, 308–11. Das, S. R. and D. P. Mukherjee (1963) “A Spectrophotometric Skin Colour Survey Among Four Indian Castes and Tribes,” Zeitschrift for Morphological Anthropology, 54, 190–200. Deshpande, A. (2000) “Does Caste Still Define Disparity?: A Look at Inequality in Kerala, India,” American Economic Review, Papers and Proceedings, 90: 2, 322–5. Deshpande, A. (2001) “Caste at Birth? Redefining Disparity in India,” Review of Development Economics, 5: 1, 130–44. Ghurye, G. S. (1932) Caste and Race in India, Popular Prakashan, Mumbai (reprint, 2000). Hinks, T. (1999) “Racial Wage Discrimination and the End of Apartheid in South
Introduction
13
Africa: A Multilateral Approach,” Working Paper, Middlesex University School of Business, October. Jawal, I. J. S. (1979) “Skin Colour in North Indian Populations,” Journal of Human Evolution, 8, 362–6. Jones, R. S. (2001) “Black/Indian Relations: An Overview of the Scholarship,” Transforming Anthropology, 10: 1, 2–16. Klass, M. (1980) Caste: The Emergence of the South Asian Social System, Institute for the Study of Human Issues, Philadelphia. Kosambi, D. D. (1985) An Introduction to the Study of Indian History, Popular Prakashan, Bombay. National Health and Family Survey of India (NFHS-I), 1995. Nesiah, D. (1997) Discrimination with Reason? The Policy of Reservations in the United States, India, and Malaysia, Oxford University Press, Delhi. Stelcner, M. and N. Kyriazis (1995) “An Empirical Analysis of Earnings Among Ethnic Groups in Canada,” International Journal of Contemporary Sociology, 32: 1, 41–79. Trautmann, T. R. (1997) Aryans and British India, University of California Press, Berkeley, Los Angeles and London. Treiman, D. J., M. McKeever and E. Fodor (1996) “Racial Differences in Occupational Status and Income in South Africa, 1980 and 1991,” Demography, 33: 1, 111–32. Twine, F. W. (1998) Racism in a Racial Democracy: The Maintenance of White Supremacy in Brazil, Rutgers University Press, Piscataway, NJ. UNDP (1994) Human Development Report, Oxford University Press, New York. UNDP (2002) Human Development Report, Oxford University Press, New York.
2
Race, gender and regional labor market inequalities in Brazil Peggy A. Lovell
Introduction No other country in the Americas has constructed such a persistent ideology of racial equality as Brazil. Often contrasted with the USA, Brazilian postslavery race relations were said to be harmonious, tolerant and devoid of prejudice or discrimination. The image of presumed equality was based primarily on Brazil’s unparalleled level of miscegenation among European, African and indigenous peoples.1 Widespread intermixing of the population gave rise to a unique pattern of social differentiation in which, allegedly, racial appearance (phenotype) rather than origin was key. Owing to the resulting ambiguity of racial identity, many Brazilians denied the existence of race or racism in their country. Race relations in Brazil, as a result, received much attention, especially among North American social scientists. However, recent empirical research has amply documented the persistence of racial prejudice and discrimination. Brazil’s image of racial equality has eroded greatly since the 1980s. Today, vigorous public debate over Brazil’s image of racial equality has displaced the ideology of racial democracy. The overwhelming evidence makes it clear that racial inequality, prejudice and discrimination are Brazil’s social reality. Scholars often have argued that one of the basic determinants of contemporary racial inequality is the geographic polarization of Brazil’s economy and population (Hasenbalg 1979, 1985; Andrews 1992). Of the total population in 1991, 44.5 percent of the 69,651,161 Afro-Brazilians lived in the impoverished and underdeveloped Northeast, while the white population (52 percent) was concentrated in the industrialized Southeast (IBGE 1996). Because of locational disadvantages, Afro-Brazilians are thus said to be handicapped because they are concentrated in regions where there are fewer social and economic opportunities. Unequal regional development and population distribution has characterized Brazilian society since colonial times (Merrick and Graham 1979; Wood and Carvalho 1988). Population and regional imbalances are the legacy of the “boom and bust” cycles of the three colonial export commodities: sugar, gold and coffee. The scarcity of labor to fuel sugar plantations during the sixteenth
Race, gender and regional labor market inequalities in Brazil 15 and seventeenth centuries was the impetus for importing African slaves into the Northeast. In the eighteenth century, with the discovery of gold and the concomitant decline in sugar production, the economic and population center of gravity shifted to central and southern Brazil. This shift left the oncewealthy northeastern plantation economy in ruins and from this point on development favored southern Brazil. It was the southern expansion of coffee exports during late nineteenth and early twentieth centuries that led to the incipient industrialization of São Paulo, built first on slave and later subsidized European immigrant labor.2 The great fortunes accumulated from coffee exports provided the foundation to build São Paulo’s industrial economy and attracted roughly 3.5 million European immigrants. By the 1920s São Paulo became the most advanced region of the country and by the 1940s the state had the largest concentration of manufacturing in all of Latin America (Wood and Carvalho 1988). The predominantly white regions of São Paulo and the Southeast remain the nation’s locus of manufacturing and finance (Kowarick and Campanario 1986). In 1990, the Southeast produced 56.2 percent of Brazil’s total gross domestic product (GDP), as compared to the Northeast’s share of 15.9 percent (Baer 1995: 277). Over time, the consequence of such cumulative effects has been sharp spatial disparities. Continued growth and diversification of the Brazilian economy has lessened but not eliminated the unequal distribution of wealth and population. From the 1950s, industrialization in south central Brazil lured Afro-Brazilian migrants from the Northeast and rural areas to the dynamic urban metropolises, especially São Paulo. The spatial redistribution of the population was accompanied by notable gains in Afro-Brazilian urban employment. Between 1950 and 1980 the proportion of individuals of African descent employed in cities increased from 36 to 62 percent (Oliveira, Porcaro and Araújo Costa 1985). Yet, at the same time, the occupational structure moved toward more skilled jobs. As a result, in 1991, Afro-Brazilians continued to be disproportionately concentrated in agriculture, construction and personal services – particularly domestic employment – the lowest-paid and most onerous jobs (Lovell 1998). Brazil’s four decades of rapid economic expansion and substantial social and demographic change have erased neither unequal population distribution nor unequal regional development. Despite internal migration, the proportion of the pardo (brown) and preto (black) workforce living in the Northeast fell by only 6.2 and 7.9 percent, respectively between 1890 and 1991 (see Table 2.1). The phenomenal growth, which the Brazilian economy experienced between 1956 and 1984 similarly did little to reduce regional disparities in economic development. Today, the Northeast continues to lag far behind the rest of the country in terms of income level, educational achievement and other indicators of living standards. Sharp inequalities thus remain between North and South and between black and white. In this chapter I address the issue of race in Brazil by examining the
16 Peggy A. Lovell Table 2.1 Regional distribution of the population by race, Brazil, 1890–1991 White
Pardo
Preto
1890 Northeast Southeast South Other
32.8 46.5 16.4 4.3
52.1 37.4 4.5 5.9
40.2 51.7 5.0 3.1
1950 Northeast Southeast South Other
23.4 49.8 21.9 4.9
58.3 26.1 2.9 12.6
42.0 46.9 6.4 4.6
1980 Northeast Southeast South Other
14.5 53.2 24.8 7.5
49.6 28.3 5.0 17.1
33.2 51.5 8.5 6.7
1991 Northeast Southeast South Other
15.0 51.9 24.3 8.9
45.9 30.5 4.6 19.01
32.3 49.9 9.3 8.5
Sources: 1890, Directoria Geral de Estatistica (1898: 2–3); 1950, IBGE (1956: 69); 1980, IBGE (1983: 34–5); 1991, IBGE (1996: 178–80).
relationship between uneven regional development and labor market inequalities. My focus is on labor market disparities among white and AfroBrazilian women and men. The central thesis of my study is that both racial and gender discrimination play a significant role in labor market outcomes, yet these outcomes are mediated by the geographic region’s level of development. Using data from the 1991 Demographic Census, I compare labor market indicators in two key regions of the country: the urban areas of the states of São Paulo (in the South) and Bahía (in the North). These two regions are significant because they reflect the sharp racial and developmental contrasts between North and South.
Racial identity and Census categories Demographic censuses and annual household surveys are the only sources of national-level information on the color composition of Brazil’s population. According to estimates, the 1991 Census reported that nearly half of the 147 million population is either pardo or preto. This large proportion of AfroBrazilians (pardos and pretos) results from approximately 3.6 million Africans who were brought to the Portuguese colony during the three and a half centuries of the slave trade (Merrick and Graham 1979). Brazil was the last
Race, gender and regional labor market inequalities in Brazil 17 country in the Americas to end slavery and the Portuguese were the largest importers of slaves, bringing to Brazil 38 percent of the approximate 9.5 million Africans forcibly transported to the Americas. My empirical analysis relies on the 1980 and 1991 demographic censuses. The racial terminology of the Census is a respondent-defined system of skin color and ethnic identity: branco (white), pardo, preto, amarelo (yellow) and indigena (indigenous).3 Because my focus is on Afro-Brazilians and the size of the Asian and indigenous populations is small, I have excluded the amarelo and indigena categories from this analysis.4 The color terminology used by the Brazilian Census leaves no doubt that the categories reflect social definitions of skin color rather than biological definitions of race. There is controversy regarding the validity of the Census Bureau’s color classification scheme (Harris 1970; Harris, Consorte, Land and Byrne 1993). To evaluate the validity of the color categories, several scholars have analyzed the data and have concluded that – while far from perfect – the data are valid enough to yield reliable analyses (Silva 1988, 1996). Nevertheless, doubts remain about the stability of self-reported information over time. To investigate mobility from one racial category to another, Wood (1991) in a study of 1950–80 Census data found that while the boundary between white and Afro-Brazilians was remarkably stable, there was evidence of color reclassification from the preto to the pardo category. His findings provide compeling reasons to collapse preto and pardo into a single Afro-Brazilian category when Census data are used to analyse changes in racial disparities over time. Based on this evidence, I retain the three-color categories for the analysis of single-year data and whenever data are compared at two points in time I combine pardos and pretos into a single Afro-Brazilian category.
Workforce characteristics Associated with the unequal regional distribution of Brazil’s population and economic development are disparities in workers’ labor market characteristics. In Table 2.2, I present summary indicators of the urban São Paulo and Bahía workforce by color and sex. The results show substantial racial and regional disparities among women and men in education and state-sponsored worker benefits. In Brazil, education levels are low. The overwhelming majority of Brazilians never achieve a high-school or college education. Rates of schooling also vary significantly by race. Estimates from the 1991 Census showed that, among all Brazilians, the rate of high-school and college completion was three times higher for whites (16.3 percent for men, 17.3 percent for women) than for pardos (5.9 percent for men and 7.2 percent for women) and pretos (5.3 percent for men and 6.1 percent for women) (IBGE, 1996). In São Paulo and Bahía we find a similar pattern. White women and men completed more schooling than either pardos or pretos. In Bahía, the proportion of white women completing 12 or more years of schooling was
18 Peggy A. Lovell Table 2.2 Selected indicators by color and sex, workers aged 18–64, urban São Paulo and Bahía, 1991 Pardo
White Indicator A São Paulo % completing 12 or more years of schooling Mean hours worked per week % with work card % with Social Security % married B Bahía % completing 12 or more years of schooling Mean hours worked per week % with work card % with Social Security % married
Women
Preto
Women
Men
Men
Women
Men
24.0
17.6
5.8
3.8
6.9
5.0
40.0 69.6
44.3 86.3
41.8 66.1
45.4 87.0
41.5 63.8
44.8 84.7
80.0 45.3
90.3 66.2
71.2 41.3
88.5 65.7
70.9 35.6
87.4 63.1
23.7
20.9
7.5
5.0
5.1
3.3
37.7 67.4
43.3 76.9
40.3 58.9
44.8 76.4
41.5 52.5
45.0 77.6
75.2 47.2
80.3 64.4
63.7 39.9
77.1 62.9
57.6 32.5
78.4 63.0
Source: 1991 Brazilian Demographic Census Public Use Sample.
nearly five times greater than the proportion of Afro-Brazilian women. Regional and pardo/preto differentials, on the other hand, followed no consistent pattern. White women and pretos in São Paulo had higher levels of schooling than their counterparts in Bahía whereas white men and pardo workers in Bahía were more likely to have graduated from high school or college than their counterparts in São Paulo. Gender disparities were evident in both regions and across all color categories. Compared to men, a greater proportion of working women had completed high-school or some post-graduate education. These results may suggest that, in order to be competitive in the labor market, women must have higher levels of education than men. Higher educational qualifications may be particularly important for Afro-Brazilian women’s access to jobs. Despite evidence of women’s advantage in education, women in all color groups were less likely than men to have either “work cards” (possession of which guarantees the worker legal rights through labor legislation) or to be covered by social security (which provides both health and pension benefits). Regional differences in legal benefits also existed. Workers in São Paulo were more likely to be covered by federal legislation than were Bahían workers. The findings in Table 2.2 also challenge the allegation that women earn lower
Race, gender and regional labor market inequalities in Brazil 19 salaries than men because they work less than full-time. With the exception of white women in Bahía, all women worked 40 hours per week or more. Finally, Table 2.2 presents worker participation by marital status. The results show that working women were much less likely than working men to be married. Marriage rates were highest among white workers and lowest among pretos.
Jobs and earnings Table 2.3 tabulates occupational distribution by color and sex. From these data I calculated indices of dissimilarity between each racial and gender group. 5 In 1991 the overall index of dissimilarity between women and men was 40.8 in São Paulo and 47.7 in Bahía. When the indices of dissimilarity by sex are disaggregated by color, we find that white women experienced the lowest occupational inequality (38.6 in São Paulo and 37.5 in Bahía) and preta women Table 2.3 Occupational distribution by color and sex, workers aged 18–64, urban São Paulo and Bahía, 1991 Total Occupation
M
A São Paulo Administration 10.6 Professional 11.6 Clerical 20.5 Industrial 37.9 Transportation/Comm. 9.5 Service 7.8 Domestic 2.1 Total (%) 100 Index of Dissimilarity by Sex Index of Dissimilarity by Color B Bahía Administration 7.2 Professional 12.3 Clerical 20.7 Industrial 36.1 Transportation/Comm. 10.7 Service 10.8 Domestic 2.1 Total (%) 100 Index of Dissimilarity by Sex Index of Dissimilarity by Color
Pardo
White F
M
5.1 12.5 19.8 13.8 30.7 22.1 11.8 33.9 0.3 9.0 8.0 7.0 24.3 1.8 100 100 40.8
3.6 13.8 28.9 21.9 25.1 25.0 4.1 21.7 0.3 9.3 9.2 7.3 28.8 1.1 100 100 47.7
Preto
F
M
F
M
F
6.1 23.2 34.7 10.8 0.3 6.5 18.3 100
5.9 5.8 16.6 48.0 10.9 10.0 2.8 100
2.8 9.4 22.3 15.5 0.4 12.0 37.7 100
5.2 7.4 16.4 48.2 10.6 9.7 2.6 100
2.0 12.2 16.0 12.4 0.2 11.7 45.5 100
38.6
6.2 41.3 31.0 2.6 0.2 5.6 13.1 100
46.2
49.8
20.1
29.6
19.4
34.0
5.9 10.1 20.7 38.4 11.5 11.2 2.2 100
3.0 26.4 25.0 4.5 0.3 10.1 30.7 100
3.2 8.3 13.9 47.8 9.4 14.0 3.4 100
1.5 17.8 14.7 4.5 0.2 11.8 49.4 100
37.5
49.1 23.4
Source: 1991 Brazilian Demographic Census Public Use Sample.
24.1
56.4 35.3
44.5
20 Peggy A. Lovell suffered the highest disparities (49.8 in São Paulo and 56.4 in Bahía. The regional comparison shows that gender inequality was greater in Bahía than in São Paulo for Afro-Brazilians. Two areas of the labor market accounted for most of this gender disparity: the industrial sector where men were concentrated and the domestic sector where women were heavily represented. Indices of racial inequality also were higher in Bahía than in São Paulo. In both states, racial dissimilarities were greater for Afro-Brazilian women than men. Preta women clearly suffered extreme disadvantages in the Brazilian labor market, experiencing the greatest gender and racial inequality. Much of this disadvantage was due to preta women’s over-representation in domestic work. By 1991, half of all employed black women worked as domestics. Generally, pretos were more disadvantaged in the workforce than pardos. Human capital theorists argue that such gender and race gaps in education and occupation lead to overall male–female and black–white earnings differences. As a result of the persistence of unequal opportunities by race and gender shown in Brazil, we can expect overall differences in wages. If most pardos and pretos have lower levels of schooling and are in low-paying occupations, then it is not surprising that they experience lower overall wages. Given Brazil’s marked regional inequalities in levels of economic and social development, we also can expect lower wages in the Northeast. Table 2.4 presents overall estimates of average monthly wages for 1991 urban São Paulo and Bahían workers between the ages of 18 and 64. As expected, the findings show that wages were higher in São Paulo than in Bahía. In each region, however, racial and gender gaps in earnings existed. AfroBrazilians and women, for example, received roughly 60 percent of the respective wages of whites and men in São Paulo. However, both the gender and color wage gaps were highest in Bahía. Preto women and men in Bahía, Table 2.4 Average monthly wagea by color and sex, workers aged 18–64, urban São Paulo and Bahía, 1991 Average monthly wage
Women as a percentage of men
White
Pardo
Preto
White
Parda
Preta
A São Paulo Women Men
129,331 224,752
60.76b 58.91
61.27c 57.47
57.54d
59.35
61.34
B Bahía Women Men
109,494 211,543
49.12 44.02
37.56 35.53
51.76
57.75
54.71
Source: 1991 Demographic Census Public Use Sample. Notes a Monthly wages are in 1991 Cruzeiros. b Pardo earnings expressed as a fraction of white earnings by sex. c Parda earnings expressed as a fraction of white earnings by sex. d Women’s earnings expressed as a fraction of men’s earnings by race.
Race, gender and regional labor market inequalities in Brazil 21 who, respectively, earned only 38 and 36 percent of the wages of white workers, experienced the highest levels of inequality. A compeling question is whether these wage differentials persist after controling for key human capital variables such as level of education. To answer this question, I estimated average monthly 1991 wages by level of schooling, race and sex; the results are presented in Table 2.5. The findings in Table 2.5 show that in both regions whites earned more than Afro-Brazilians and men earned more than women within every educational category. The racial wage gap actually increased with education for both women and men. For instance, in São Paulo among women with 0–4 years of schooling, parda and preta women earned roughly 90 percent of the wages of white women. Yet, at the highest level of schooling, white women earned nearly one-fourth more than Afro-Brazilian women did. We see similar Table 2.5 Average monthly wagea by years of completed schooling, color and sex, workers aged 18–64, urban São Paulo and Bahía, 1991 Average monthly wage
Women as a percentage of men
Years of schooling
White
Pardo
Preto
White
Parda
Preta
A São Paulo Women 0–4 Cr$ 5–8 9–12 13+
67,373 83,784 127,717 242,349
0.90b 0.85 0.80 0.76
0.91c 0.87 0.79 0.74
0.51d 0.56 0.57 0.47
0.54 0.57 0.61 0.57
0.58 0.61 0.61 0.57
Men 0–4 5–8 9–12 13+
130,998 148,850 223,616 518,939
0.86 0.85 0.75 0.63
0.81 0.80 0.73 0.61
B Bahía Women 0–4 5–8 9–12 13+
30,513 41,023 88,698 242,818
0.87 0.82 0.72 0.73
0.79 0.75 0.67 0.63
0.40 0.47 0.48 0.46
0.47 0.47 0.49 0.52
0.45 0.48 0.48 0.64
Men 0–4 5–8 9–12 13+
75,760 87,888 185,344 533,219
0.74 0.81 0.70 0.64
0.70 0.72 0.67 0.45
Source: 1991 Brazilian Demographic Census Public Use Sample. Notes a White monthly wages expressed in 1991 Cruzeiros. b Pardo earnings expressed as a fraction of white earnings by sex. c Preto earnings expressed as a fraction of white earnings by sex. d Women’s earnings expressed as a fraction of men’s earnings by race.
22 Peggy A. Lovell patterns among men, with an even wider racial gap in earnings. At the highest level of schooling, Afro-Brazilian men in Bahía earned only 45 percent of the wages of white men. Regional comparisons indicate that racial disparities in wages were higher in Bahía than in São Paulo. Across all color groups, the wage differential was greatest by gender. The largest wage gaps were between white women and men. For example, at the highest level of schooling, white women earned less than one-half of white men’s wages. A comparison of parda and preta women and men shows a similar pattern of gender differences: Afro-Brazilian women were paid less than Afro-Brazilian men in all educational categories. These patterns of wage inequality suggest that gender inequality in wages was even greater than racial inequality.
Labor market discrimination over time In the USA an extensive literature has explored the persistence of racial and gender wage inequality. Researchers maintain that racial and gender differences in earnings result from structural and economic factors on the one hand, and some type of gender/race discrimination effect on the other. Research on labor market inequalities in Brazil has found significant evidence of discrimination (Silva 1978, 1985; Lovell 1993, 1994; Lovell and Wood 1998; Telles and Lim 1998). To estimate both racial and gender wage discrimination in São Paulo and Bahía, I performed a Blinder (1973)–Oaxaca (1973) type of decomposition analysis based upon ordinary least-squares (OLS) regression with the log of average monthly wages as the dependent variable. In order to explore the extent to which discrimination in Brazil has changed, I analyzed data from 1980 and 1991. Because the self-classification of color in the Brazilian Census has been shown to be unstable over time (as discussed above), I combined pardos and pretos into a single Afro-Brazilian category for the analysis. The technique involves estimating four equations, one for Afro-Brazilian men, one for white men, one for Afro-Brazilian women and one for white women, in each Census year.6 For the wage analysis, I selected a set of individual-level variables traditionally employed in models of earnings: job experience, years of schooling, occupation, hours worked and marital status. Results from these equations served as input into the decomposition model. This technique partitions the earnings gap between two groups into three parts: composition (the proportion of the difference that can be attributed to unequal human capital endowments), discrimination (the amount of the wage differential resulting from unequal pay), and interaction (the proportion of the wage gap which measures the combined effects of unequal qualifications and discrimination). The objective of this analysis is to investigate whether – over and above differences in education, occupation and additional sociodemographic variables – race and gender exert independent effects on the distribution of wages. Wage discrimination is said to occur when similarly
Race, gender and regional labor market inequalities in Brazil 23 qualified workers in the same job category receive unequal pay on the basis of either sex or skin color. Table 2.6 presents the results of the wage decomposition analysis for 1980 and 1991 in São Paulo and Bahía. Wages for Afro-Brazilians and white women are compared to those of white men. Five overall trends are particularly striking: (1) Compositional differences were higher in São Paulo than in Bahía which represents greater disparity in human capital endowments among workers in São Paulo. (2) Over time, compositional differences decreased among all groups in both regions, reflecting gains in education and job placement won by Afro-Brazilians and women. (3) Yet, despite these gains, wage discrimination increased from 1980 to 1991 for all groups in both regions. (4) Wage discrimination, for both 1980 and 1991, was higher in São Paulo than in Bahía. (5) the group which suffered the greatest wage discrimination was white women; in 1991 a striking 99 percent of the differential in their pay was due to unequal wages for given characteristics in São Paulo (112 percent in Bahía).
Conclusions In this study I was particularly interested in the relationship between a region’s level of economic development and labor market discrimination. The findings suggest that while women and Afro-Brazilians in Brazil’s most developed region had the advantage of higher levels of state-sponsored work benefits (a work card and social security) and more equitable occupational and wage distribution, they nevertheless experienced the greatest discrimination. In Table 2.6 Decomposition of average wage differentials by color and sex, workers aged 18–64, urban São Paulo and Bahía, 1980, 1991 (Base group = white men) Afro-Brazilian men
Afro-Brazilian women
White women
1980
1991
1980
1991
1980
1991
A São Paulo Composition 37.32 Discrimination 28.84 Interaction 33.84 Total difference (%) 100
27.59 40.00 32.41 100
12.03 45.09 42.88 100
11.56 51.37 37.07 100
–3.45 90.71 12.73 100
–6.11 99.26 6.85 100
B Bahía Composition 34.19 Discrimination 9.92 Interaction 55.89 Total difference (%) 100
26.32 22.82 50.87 100
11.99 31.57 56.44 100
9.27 46.05 44.68 100
–7.16 101.71 5.45 100
–9.89 111.59 –1.70 100
Component
Source: 1980 and 1991 Brazilian Demographic Censuses Public Use Samples.
24 Peggy A. Lovell contrast, in the less developed Northeast where racial and gender gaps in education, occupation and wages were the most severe, discrimination was lowest. As Darity (1998) has observed, labor market discrimination is less “needed” when there are large disparities between minority and majority groups. Wage decomposition analysis further shows that, even after controling for the standard predictors of earnings, wage discrimination increased over time. These findings suggest that discrimination will not vanish as Afro-Brazilians and women progressively acquire adequate education or access to jobs. On the contrary, as evidence from São Paulo indicates, economic growth and development may generate more opportunities for upward mobility while simultaneously increasing competition and strong incentives to erect gender and racial barriers. Finally, these findings show that pretos and pardos did not differ greatly from each other on the social and economic indicators analyzed. In some cases, pardos did have higher social indicators than blacks, but only slightly higher; and both groups always ranked far below whites. As other studies have suggested, the color line in Brazil seems to be located between whites and Afro-Brazilians, and not between pardos and pretos. The stubborn persistence of gender and racial discrimination in Brazil presents an especially daunting challenge today. Brazil is currently in the grip of a profound economic crisis that has negatively impacted international financial markets. One can suspect that federal policy and the political willpower to further women’s and blacks’ social and economic advancement will decrease in an environment of economic crisis. In such a setting of fiscal uncertainty, where Afro-Brazilians compose almost half of the national population, white Brazilians have little incentive to accept proposals of redistributive social policies. Likewise, continued structural reform and privatization of the Brazilian economy will further reduce social welfare spending. These economic changes may very well have a particularly negative effect on women and the Afro-Brazilian population in terms of employment and earnings. Thus, the possibility of widening racial and gender disparities in Brazil is very real.
Notes 1 In Brazil, it was through the writings and lectures of Gilberto Freyre (1933) that the idea of racial democracy gained currency. In the USA, observers such as Theodore Roosevelt also promoted the Brazilian ideal of racial equality (Silva 1978). Reporting that Brazil had solved the race question, Black newspapers in the USA during the 1910s and 1920s encouraged black emigration there. (Andrews 1996). 2 Following abolition, Southeast coffee growers used tax revenues and state subsidies to underwrite the costs of transporting millions of white Europeans to southeastern Brazil. Efforts to increase the European population were part of the Brazilian state’s political doctrine of whitening (branqueamento). The goal was to make the Brazilian population whiter, Europeanized and therefore, “better” (Skidmore 1974). A conservative estimate would place the total number of
Race, gender and regional labor market inequalities in Brazil 25
3
4 5
6
immigrants arriving in Brazil during the period 1820–1930 at between 4.5 and 5 million, of whom roughly 3.5 million remained (Merrick and Graham 1979; Gebara 1986). The number of immigrants making their homes in Brazil quickly matched the number of African slaves imported over a period of 300 years. The majority of these immigrants clustered in the Southeast, where they remain concentrated today. Immigration had important consequences for the newly freed slave. European immigrants received preferential treatment from both employers and the state and succeeded in displacing black workers from the most dynamic areas of the economy. At the moment of entering a free labor market, AfroBrazilians were pushed aside in the competition for jobs and other opportunities. It is Brazil’s recognition of pardos, an intermediate or mixed racial category, that distinguishes Brazilian race relations from those in the USA. Carl Degler (1971) argued that in Brazil, a “mulatto escape hatch” exists whereby mulattoes occupy a privileged position relative to blacks. Empirical results, for the most part, have refuted Degler’s argument and found that pretos and pardos, although different in some respects, suffer similar levels of discrimination (Silva 1985; Andrews 1992). The indigena category was not used in the 1980 Census. The index of dissimilarity is a commonly used measure of inequality between groups. In Table 2.3 it measures racial and gender differences in the occupational sector distribution of workers. The index is calculated by summing the absolute values of the differences in distribution for each category and dividing by two. The result indicates the percentage of individuals in either racial group who would have to move from one category to another (in the case of Table 2.3, from one occupation to another) in order to produce complete equality. An index of 100 indicates total difference or complete inequality; an index of 0 indicates no differences and thus complete equality. The decomposition model is: (Y h – Y l) = [(a h – al) +ΣX1(bh – bl)] + Σb1(X h – X l) + Σ(bh – bl) (X h – X l) The notation follows that of Iams and Thornton (1975) where: superscript h indicates the high-wage groups (always white males in this study); superscript l indicates the low-wage group (alternatively Afro-Brazilian men and women and white women); Y stands for the natural logarithm of the wage rate; X l is the mean of the ith explanatory variable; a is the regression constant; and b l is the partial regression coefficient for the ith explanatory variable.
References Andrews, G. R. (1992) “Racial Inequality in Brazil and the United States: A Statistical Comparison,” Journal of Social History 26: 2, 229–63. Andrews, G. R. (1996) “Brazilian Racial Democracy, 1900–90: An American Counterpoint,” Journal of Contemporary History 31: 3, 483–507. Baer, W. (1995) The Brazilian Economy: Growth and Development, Praeger, Westport, CT. Blinder, A. (1973) “Wage Discrimination: Reduced Form and Structural Estimates,” Journal of Human Resources, 8: 4, 436–65. Darity, W. A., Jr (1998) “Intergroup Disparity: Economic Theory and Social Science Evidence,” Southern Economic Journal 64: 4, 805–26. Degler, C. N. (1971) Neither Black nor White, Macmillan, New York. Freyre, G. (1933) Casa-Grande and Senzala, José Olympio, Rio de Janeiro. Gebara, A. (1986) O mercado de trabalho livre no Brasil, Editora Brasiliense, São Paulo.
26 Peggy A. Lovell Harris, M. (1970) “Referential Ambiguity in the Calculus of Brazilian Racial Identity,” Southwestern Journal of Anthropology, 26, 1–14. Harris, M., J.G. Consorte, J. Land and B. Byrne (1993) “Who are the Whites? Imposed Census Categories and the Racial Demography of Brazil,” Social Forces, 72, 451–62. Hasenbalg, C. (1979) Discriminacão e Desigualdades Raciais no Brasil, Graal, Rio de Janeiro. Hasenbalg, C. (1985) “Race and Socioeconomic Inequalities in Brazil,” in P.-M. Fontain (ed.), Race, Class and Power in Brazil, University of California Press, Los Angeles, 25–41. Iams, H. M. and A. Thornton (1975) “Decompositon of Differences: A Cautionary Note,” Sociological Methods and Research, 3, 341–52. IBGE (1996) Censo demográfico – 1991, Característica Gerais da População e Instrução, IBGE, Rio de Janeiro. Kowarick. L. and M. Campanario (1986) “São Paulo: The Price of World City Status,” Development and Change, 17: 1, 159–74. Lovell, P. A. (1993) “The Geography of Economic Development and Racial Discrimination in Brazil,” Development and Change, 21: 1, 83–101. Lovell, P. A. (1994) “Race, Gender and Development in Brazil,” Latin American Research Review, 29, 7–35. Lovell, P. A. (1998) “Gender, Race and the Struggle for Social Justice in Brazil,” paper presented at the American Sociological Society’s Annual Meeting, San Francisco. Lovell, P. A. and C. H. Wood (1998) “Skin Color, Racial Identity and Life Chances in Brazil,” Latin American Perspectives, 25, 90–109. Merrick, T. and D. H. Graham (1979) Population and Economic Development in Brazil: 1800 to the Present, Johns Hopkins University Press, Baltimore. Oaxaca, R. (1973) “Male–Female Wage Differentials in Urban Labor Markets,” International Economic Review, 14: 3, 693–705. Oliveira, L. E. G., R. M. Porcaro and T. C. N. Araújo Costa (1985) O Lugard do Negro na Força de Trabalho, IBGE, Rio de Janeiro. Skidmore, T. (1974) Black into White, Oxford University Press, New York. Silva, N. do Valle (1978) “Black–White Income Differentials: Brazil, 1960,” unpublished PhD dissertation, University of Michigan. Silva, N. do Valle (1985) “Updating the Cost of Not Being White in Brazil,” in P.-M. Fontain (ed.), Race, Class and Power in Brazil, University of California Press, Los Angeles, 42–55. Silva, N. do Valle (1988) “Côr e o processo de realização socio-economica,” in C. Hasenbalg and N. do Valle Silva, Estructura Social, Mobilidade e Raça, Edicoes Vertice, São Paulo, 144–63. Silva, N. do Valle (1996) “Morenidade: modo de usar,” Estudos Afro-Asiáticos, 30, 79–95. Telles, E. E. and N. Lim (1998) “Does it Matter Who Answers the Race Question? Racial Classification and Income Inequality in Brazil,” Demography, 35: 4, 465–74. Wood, C. H. (1991) “Categorias censitarias e classificaces subjetivas de raça no Brasil,” in P. A. Lovell (ed.), Desigualdade Racial no Brasil Contemporâneo, Universidade Federal de Minas Gerias, Centro de Desenvolvimento e Planejamento Regional, Belo Horizonte, 93–111. Wood, C. H. and J. A. Magno de Carvalho (1988) The Demography of Inequality in Brazil, Cambridge University Press, Cambridge.
3
Earnings differentials among ethnic groups in Canada A review of the research Morton A. Stelcner
Background Immigration and immigration policy 1 Canada is characterized by an exceptionally large (17 percent) immigrant population with an increasingly diverse ethnic/cultural profile.2 Canada’s immigration patterns were determined by a number of factors: colonization by the French and British; the railroad age; the Great Depression; industrialization; and economic expansion. During the eighteenth and nineteenth centuries, nearly all immigrants came from Britain and France (the so called “founding peoples”). Until the twentieth century, more people emigrated from Canada (to the USA) than immigrated. However, the completion of the national railways attracted an unprecedented number of immigrants from northern, central and eastern Europe to populate the newly opened Prairies. During the settling of the Prairies, immigration peaked at 400,000 in 1913. However, the onset of the Great Depression, closed the immigration door until the end of World War II. By 1931, Canada was on its way to becoming a multi-ethnic nation in which there was substantial representation of almost every European ethnic group, still dominated by British (52 percent) and French (28 percent); this distribution remained constant until 1941. After the Second World War, immigration restrictions were relaxed in order to accommodate increased labor demands of a rapidly expanding economy. However, the 1953 Immigration Act continued to allow the government to bar entry for reasons such as ethnicity, nationality, and “peculiar customs, habits, modes of life or methods of property.” British, (white) Americans and, to a lesser degree, French immigrants were preferred. By the end of the 1950s, Europe accounted for 84 percent of immigrants. The year 1962 witnessed a landmark change in immigration policy in response to pressing labor market needs and demographic goals, as well as growing opposition in the late 1950s to restrictions based on ethnic origin and race. Legislative changes officially lifted ethnic, racial or religious barriers to immigrants who were qualified by reason of “education, training, skills or other special qualifications.” The new regulations, however, still allowed
28 Morton A. Stelcner European immigrants to sponsor a broader range of relatives than nonEuropeans. The 1967 Immigration Act formalized the 1962 regulations and established a “point system” for selecting immigrants, with the main purpose of aligning immigrant flows with the perceived needs of the economy. The Act removed all traces of ethnic, national and racial preferences; it also constrained the discretionary power of overseas immigration officers. The new immigration regulations had an immediate and profound effect on immigration streams in the late 1960s and 1970s: the share coming from Europe decreased to about 50 percent, while the proportion from Asia, Africa, the Middle East, and the Caribbean/Latin America increased sharply to 43 percent from 16 percent in the late 1950s and early 1960s. The 1978 Immigration Act introduced several new features. Greater weight was given to considerations that would foster economic growth. The minimum requirement was increased to 70 points (from the earlier 50); more emphasis was also given to occupational skills and technical training and less weight to general education. The Act introduced “family reunification” as a goal, partly out of humanitarian considerations, and partly to address labor market needs. In 1982 independent applicants could enter only if they had pre-arranged employment, but this requirement was removed in 1986. Prompted by a dramatic decline in the birth rate, greater emphasis was placed on the linkage between immigration and population growth. The 1978 Act was further amended in 1989 to cope with the arrival of large numbers of people claiming refugee status. Changes in ethnic diversity: 1970–96 The shift in immigrant source countries since the early 1970s markedly altered the ethnic profile. Some 1.5 million immigrants arrived during the 1980s, twothirds of whom came from non-European regions: the representation of nonBritish and non-French Europeans declined to 15 percent from 23 percent over 1971–91, while that of non-Europeans quadrupled to 16 percent (see Table 3.1 for details). The ethnic profile continued to change during the 1990s; by 1996 the foreign-born population rose to 5 million, or 17.4 percent of the population, with a predominance of non-Europeans. It is worth noting that about 30 percent of the Canadian population reported a mixed ethnic background. Roughly 85 percent of visible minorities are immigrants, with varying arrival dates; about 90 percent reside in the large urban areas of Ontario, British Columbia, Quebec, and Alberta. The foreign-born share is about 65 percent among visible minorities with mixed backgrounds (e.g. Black and British, Chinese, and French), and Southeast Asians other than Filipino and Vietnamese (e.g. Japanese, and Korean). There is also considerable variation in nativity status of white ethnic groups. Over 85 percent of British, French, and Ukrainians are Canadian-born, but much smaller proportions are found among Portuguese (13 percent), Spanish (17 percent), Balkan (29 percent),
Earnings differentials among ethnic groups in Canada 29 Table 3.1A Population by ethnic origins for selected years, Canada, 1871–1951 Ethnic group
1871
1881
1901
1911
1921
1931
1951
Total (000)
3,689
4,325
5,371
7,207
8,788
10,377
14,009
British French
100.00 51.40
100.00 50.97
100.00 53.84
100.00 51.55
100.00 50.38
100.00 54.41
100.00 64.37
151.40
150.97
153.84
151.55
150.38
154.41
164.37
151.40
150.97
153.84
151.55
150.38
154.41
164.37
British and French Mixed British/French Mixed British/French/ Other Some British/French Total European
162.94
162.72
168.80
175.18
175.99
188.33
202.43
Not European Not British/French
2.35 13.89
6.98 18.73
6.56 21.51
5.03 28.65
4.51 30.12
4.51 38.43
6.36 44.42
Not British/French/Eur Austrian Baltic Belgian Czech/Slovak Dutch Finnish German Greek Hungarian Italian Jewish Polish Portuguese Spanish Roumanian Russian Scandinavian Danish Icelandic Norwegian Swedish Other Scand. Ukrainian YugoslavlBalkan Other European
11.54
11.75
14.95 0.36
23.63 1.10
0.10
0.24
1.10 0.08 10.14 0.01 0.05 0.35 0.53 0.21
1.40 0.39 10.09 0.09 0.29 1.15 1.91 0.84
25.61 2.21 0.04 0.42 0.18 2.41 0.44 6.05 0.12 0.27 1.37 2.59 1.10
33.92 0.90 0.11 0.51 0.56 2.77 0.82 8.80 0.18 0.75 1.82 2.91 2.70
38.06 0.48 0.53 0.52 0.95 3.94 0.65 9.24 0.21 0.90 2.27 2.71 3.28
0.01 0.65 1.01
0.15 1.11 2.82
0.28 2.06 3.44 0.43 0.33 1.41 1.26
0.54 1.64 4.24 0.63 0.36 1.73 1.51
0.35 1.36 4.22 0.64 0.35 1.78 1.46
1.01 0.19
2.82 1.89
4.18 0.30 0.17
5.89 0.32 0.25
Not European Aboriginal Canadian Total Asian East/SE Asian Chinese Filipino Korean Japanese
1.33
1.19
9.09 0.00
9.98
0.05 0.01
0.07 0.03
0.03 0.07
0.05 0.20
0.07
0.20
0.96
0.23
0.17
0.17
2.19 0.08 0.37
2.3 1.03
6.98 4.26
6.56 4.18
5.03 2.64
4.51 2.34
4.51 2.40
6.36 2.47
0.00
0.17 0.17 0.17
0.77 0.72 0.57
1.08 0.92 0.70
1.18 1.14 0.81
1.38 1.30 0.86
0.90 0.81 0.48
0.15
0.23
0.33
0.43
0.32
30 Morton A. Stelcner Table 3.1A Continued Ethnic group
1871
Vietnamese Other E/SE Asian South Asian West Asian Armenian Iranian Turk Other West Asian Other Asian Arab Black (exc Carib.) Caribbean Latin American Other Not-European
1881
1901
1911
0.05 0.05
0.96
0.84
0.05 0.57
0.35
1.71
0.98
0.10 0.06
1921
0.04
1931
1951
0.09 0.09
0.03 0.06
0.10 0.10 0.42
0.04 0.17 0.38
0.19 0.38
0.18 0.27
0.78
0.44
0.18
2.54
Source: Statistics Canada, Various Censuses. Note 0.00 = greater than 0 but less than 0.01.
Table 3.1B Population by ethnic origins for selected years, Canada, 1871–1951 Ethnic group
1871
1881
1901
1911
1921
1931
1951
Total (000) British French
3,689.26 4,325.81 5,371.32 7,206.64 8,787.95 10,376.79 14,009.43 2,232.04 2,548.51 3,063.20 3,999.08 4,868.74 5,381.07 6,709.69 1,147.17 1,298.93 1,649.37 2,061.72 2,452.74 2,927.99 4,319.17
British and French
3,379.21 3,847.44 4,712.57 6,060.80 7,321.48 8,309.06 11,028.85
Mixed British/French Mixed British/French/ Other Some British/French 3,379.21 3,847.44 4,712.57 6,060.80 7,321.48 8,309.06 11,028.85 Total European Not European Not British/French
3,636.81 4,146.90 5,170.52 7,005.58 8,568.58 10,134.31 13,582.57 52.45 310.05
177.91 477.37
200.79 201.06 219.37 242.47 426.86 658.75 1,145.84 1,466.47 2,067.73 2,980.58
Not British/French/Eur 257.60 Austrian Baltic Belgian Czech/Slovak Dutch 29.66 Finnish German 202.99
299.46
457.96 10.95 2.99
30.41 254.32
33.85 2.50 310.50
944.78 1,247.10 1,825.25 2,553.72 44.04 107.67 48.64 32.23 1.97 5.88 35.26 9.66 20.23 27.59 35.15 8.84 30.40 63.96 55.96 117.51 148.96 264.27 15.50 21.49 43.89 43.75 403.42 294.64 473.54 620.00
Earnings differentials among ethnic groups in Canada 31 Table 3.1B Continued Ethnic group Greek Hungarian Italian Jewish Polish Portuguese Spanish Roumanian Russian Scandinavian Danish Icelandic Norwegian Swedish Other Scand. Ukrainian Yugoslav/Balkan Other European
1871
1881
0.04 1.04 0.13
1.85 0.67
0.61 1.62
1.23 5.22
1.62
5.22
1901
1911
1921
1931
1951
0.29 1.55 10.83 16.13 6.29
3.61 11.65 45.96 76.20 33.65
5.74 13.18 66.77 126.20 53.40
9.44 40.58 98.17 156.73 145.50
13.97 60.46 152.25 181.67 219.85
0.35 19.83 31.04
5.88 44.38 112.68
13.47 100.06 167.36 21.12 15.88 68.86 61.50
29.06 88.15 228.05 34.12 19.38 93.24 81.31
23.60 91.28 283.02 42.67 23.31 119.27 97.78
31.04 5.68
112.68 75.43
225.11 16.17 9.39
395.04 21.40 16.58
21.52
5.76
5.17
6.76
106.72 3.91 17.95
Not European 52.45 Aboriginal 23.04 Canadian Total Asian 0.00 East/SE Asian Chinese Filipino Korean Japanese Vietnamese Other E/SE Asian South Asian West Asian Armenian Iranian Turk Other West Asian Other Asian 0.00 Arab Black (exc Carib.) 21.50 Caribbean Latin American Other Not-European 7.91
177.91 108.55
200.79 127.94
201.06 105.61
219.37 113.72
242.47 128.89
426.86 165.61
4.38 4.38 4.38
23.73 22.05 17.31
43.21 36.90 27.83
57.63 55.46 39.59
74.48 69.86 46.52
60.53 54.19 32.53
4.74
9.07
15.87
23.34
21.66
1.68
2.34
21.39
1.68 17.44
3.97 3.88 16.99
2.18 8.28 18.29
4.62 10.07 19.46
4.19 12.30 18.02
43.59
30.00
31.36
21.44
9.58
170.40
Source: Statistics Canada, Various Censuses. Note 0.00 = greater than 0 but less than 50.
2.15
32 Morton A. Stelcner Table 3.1C Percentage distribution, 1961–91 Ethnic group
1961
1971
1981
1991
Total (000)
18,238
21,568
24,083
26,994
British French
100.00 69.28
100.00 64.21
100.00 66.56
100.00 81.09
169.28
164.21
166.56
181.09
169.28
164.21
4.45 11.29 182.29
14.11 50.46 245.65
220.77
215.75
229.86
300.22
Not European Not British/French
7.31 58.79
8.36 59.89
19.08 66.65
55.19 109.76
Not British/French/Eur
51.48
51.53
47.57
54.57
Austrian Baltic Belgian Czech/Slovak Dutch Finnish German Greek Hungarian Italian Jewish Polish Portuguese Spanish Roumanian Russian Scandinavian Danish Icelandic Norwegian Swedish Other Scand. Ukrainian YugoslavlBalkan Other European
1.33 0.80 0.77 0.91 5.37 0.74 13.13 0.71 1.58 5.63 2.17 4.05
0.55 1.49 4.83 1.07 0.38 1.86 1.52
0.44 0.64 0.53 0.85 4.43 0.62 13.69 1.29 1.37 7.59 3.09 3.29 1.01 0.29 0.28 0.67 4.00 0.79 0.29 1.86 1.06
5.92 0.86 0.64
6.03 1.09 0.35
0.42 0.52 0.44 0.70 4.22 0.54 11.81 1.60 1.20 7.73 2.73 2.63 1.94 0.55 0.23 0.51 2.92 0.60 0.24 1.06 0.81 0.22 5.47 1.33 0.06
0.36 0.52 0.41 0.78 4.72 0.52 12.00 1.99 1.33 9.88 3.24 3.59 3.25 1.09 0.38 0.50 2.30 0.54 0.19 0.83 0.57 0.17 5.35 1.73 0.64
Not European Aboriginal Canadian Total Asian East/SE Asian Chinese Filipino Korean Japanese
7.31 2.75
8.36 3.25
19.08 3.78
1.28 1.09 0.73
2.97 1.62 1.23
0.36
0.39
8.04 5.04 2.99 0.75 0.23 0.42
55.19 6.20 10.07 21.41 12.66 7.72 2.07 0.58 0.64
British and French Mixed British/French Mixed British/French/Other Some British/French Total European
Earnings differentials among ethnic groups in Canada 33 Table 3.1C Continued Ethnic group
1981
1991
0.32 0.32 2.03 0.32 0.22 0.06 0.04 0.00
1.11 0.54 5.53 1.08 0.34 0.51 0.11 0.11
1.22
0.63 0.47 0.84 0.37 5.60
1.90 2.96 1.24 1.13 12.43
1961
1971
1981
1991
Total (000)
18,238.25
21,568.31
24,083.50
26,994.05
British French
7,996.67 5,540.35
9,624.12 6,180.12
9,674.25 6,439.10
7,595.17 6,158.68
13,537.02
15,804.24
16,113.35
13,753.85
13,537.02
15,804.24
430.26 1,091.83 17,635.44
1,071.88 3,832.17 18,657.89
Vietnamese Other E/SE Asian South Asian West Asian Armenian Iranian Turk Other West Asian Other Asian Arab Black (exc Carib.) Caribbean Latin American Other Not-European
1961
1971
0.10 0.08
0.64 0.71
0.10 0.24 0.40
0.64 0.28 0.36 0.29
2.63
Table 3.1D Distribution (000), 1961–91 Ethnic group
British and French Mixed British/French Mixed British/French/Other Some British/French Total European
17,653.86
20,763.92
22,237.64
22,802.23
Not European Not British/French
584.38 4,701.23
804.39 5,764.08
1,845.86 6,448.06
4,191.82 8,336.15
Not British/French/Eur
4,116.85
4,959.69
4,602.20
4,144.33
106.54 64.37 61.38 73.06 429.68 59.44 1,049.60 56.48 126.22 450.35 173.34 323.52
42.12 61.53 51.14 81.87 425.95 59.22 1,317.20 124.48 131.89 730.82 296.95 316.43 96.98 27.52 27.38
40.63 50.30 43.00 67.70 408.24 52.32 1,142.37 154.36 116.40 747.97 264.02 254.49 188.10 53.55 22.48
27.13 39.61 31.48 59.13 358.18 39.23 911.56 151.15 100.73 750.06 245.84 272.81 246.89 82.68 28.65
Austrian Baltic Belgian Czech/Slovak Dutch Finnish German Greek Hungarian Italian Jewish Polish Portuguese Spanish Roumanian
43.81
34 Morton A. Stelcner Table 3.1D Continued Ethnic group Russian Scandinavian Danish Icelandic Norwegian Swedish Other Scand. Ukrainian YugoslavlBalkan Other European Not European Aboriginal Canadian Total Asian East/SE Asian Chinese Filipino Korean Japanese Vietnamese Other E/SE Asian South Asian West Asian Armenian Iranian Turk Other West Asian Other Asian Arab Black (exc Carib.) Caribbean Latin American Other Not-European
1961
1971
1981
1991
119.17 386.53 85.47 30.62 148.68 121.76
64.48 384.79 75.73 27.91 179.29 101.87
473.34 68.59 51.45
580.66 104.96 33.37
49.43 282.80 57.94 22.76 102.74 78.36 21.01 529.62 129.08 5.38
38.22 174.37 40.64 14.56 63.03 43.35 12.80 406.65 131.44 48.56
584.38
804.39
1,845.86
4,191.82
220.12
312.76
365.92
102.38 87.35 58.20
285.54 156.08 118.82
29.16
37.26
6.77
67.93
777.44 487.43 289.25 72.63 22.10 40.99 31.36 31.11 196.38 31.21 21.16 5.60 4.16 0.30
470.62 765.10 1,626.50 961.23 586.65 157.25 44.10 48.60 84.01 40.64 420.30 81.66 26.01 38.92 8.53 8.22
8.25 19.37 32.13
61.54 26.67 34.45 28.03
210.38
116.96
60.69 45.22 81.51 36.05 541.48
144.05 224.62 94.40 85.54 944.33
Greek (30 percent), Italian (49 percent), and Polish (50 percent). Differing arrival periods characterize these groups.
Multiculturalism and employment equity Two major federal policies give explicit recognition to ethnic diversity in Canada. First, the 1971 Multiculturalism within a Bilingual Framework Policy and the subsequent 1988 Act for the Preservation and Enhancement of Multiculturalism in Canada are designed to encourage members of all ethnic groups to maintain and share their cultural heritage and language, and to recognize and promote the understanding of cultural and racial diversity in Canada. Second, the 1986 Employment Equity Act (strengthened by the 1995
Earnings differentials among ethnic groups in Canada 35 Act) addressed labor market disadvantages (such as, hiring, occupational segregation, and earnings) of four designated groups by aiming to “achieve equality in the workplace” with “accommodation of difference.”3 Prior to 1986, ethnic-specific information in the publicly available Census micro data was restricted to European origin groups, Blacks, Chinese and Aboriginals. The term “visible minorities”, first appeared in the 1986 Census Public Use Data Base (released in 1990), and then in the 1991 Census Public Use Micro File (released in 1994). Ethnicity in the Census is based on self-identification obtained from responses to the following: “to which ethnic or cultural group(s) did this person’s ancestors belong?” It must be emphasized that the Census did not ask individuals to identify themselves by “race” or “color.” At the same time, however, the 1986 Employment Equity Act forced the need to collect data on groups that are distinctive by virtue of their “visibility,” race or colour. Information on race was collected for the first time in the (mid-decade) 1996 Census. The data on visible minority membership in both the 1986 and 1991 Census do not reflect self-designation by respondents. Visible minority membership in the 1986 and 1991 Census data is based on a derived “visible minority indicator.” This constructed measure is obtained mainly from responses to ancestral origin that are cross-classified against other self-reported “cultural” information such as birthplace, mother tongue and religion. As a result, ethnic origin data may differ in interesting ways from the derived visible minority indicator. For example, a person could selfidentify a single ethnic origin of British, Dutch, or Greek and still be coded as a visible minority. Similarly, a Latin American can be coded as a visible minority or white. Table 3A.1 shows (p. 36) that the visible minority category contains one multiple-origin and ten single-origin ethnic groups.
Review of research Employment equity initiatives sparked much research interest in assessing whether observed wage differences among various groups reflected discrimination. The large number of studies commonly use the Blinder (1973)–Oaxaca (1973) method to decompose the difference in observed earnings into two components: (1) an “endowments” or “explained” portion that is due to group differences in measured wage-generating characteristics and (2) a “coefficients” or “unexplained residual” portion that is attributable to differences in returns for the same characteristics. The “residual” is conventionally interpreted as earnings discrimination. The greatest attention has been paid to the gender earnings gap.4 By contrast, only a handful of studies consider disparities between persons with and without disabilities.5 Since Canada has two official languages (English and French), there is also a sizeable body of research on the effects of language on earnings and other economic outcomes.6 A growing body of research focuses directly on analyzing earnings
36 Morton A. Stelcner differentials between “whites” (“not-visibles”), visible minorities (“visibles”), and Aboriginals. The studies reveal much variance in the estimates of ethnic earnings discrimination. This is partly due to the usual differences in data sources, sample definitions, the choice of the dependent variable, controls used in the earnings regressions, and statistical methodology. In evaluating the empirical findings it is also important to recognize the limitations of the method that is used to estimate discrimination.7 A major drawback is that little is known about the structure of opportunities to enhance earnings capacity prior to labor market entry. There is also inadequate information about unobserved and often unmeasured traits such as an individual’s value system (“tastes”), cognitive and affective skills, ability, and motivation. The conventional discrimination measure is not immune to biases in different directions because of the “included or omitted variables problem.” The former measure can under-estimate discrimination to the extent that earnings-determining characteristics reflect indirect discriminatory effects of pre-market factors, which are taken as given and controlled for in the regressions. The discrimination estimate may be over-stated because of omitted or badly measured productivity-enhancing characteristics. In addition, there are other considerations underlying differences in the findings: the treatment of immigration status, the extent of aggregation of individual ethnic groups, the handling of multiple ethnic origins, and the choice of the no-discrimination benchmark earnings structure. Most studies fail to indicate the levels of statistical significance (e.g. standard errors) of the discrimination estimates. Group 1: no distinction between Canadian-born and immigrants An early study by Kuo (1976) used 1969–70 survey data to analyze the earnings gaps between whites and three male Aboriginal groups (North American Indian, Eskimo, and Métis) in the Mackenzie District of Northern Canada. The gross gaps were: Indian, 84 percent, Eskimo, 66 percent, and Métis, 53 percent. Kuo found that 84–8 percent of the observed gaps could be attributed to productivity-related characteristics. Patrinos and Sakellariou (1992) examined the earnings differential between male (North American) Indians and non-Indians using 1986 Labor Market Activity Survey (LMAS) data. Indians faced a gross shortfall of 23 percent; 60 percent could not be explained by background attributes. George and Kuhn (1994) used the 1986 Census to decompose the earnings gap between whites and Aboriginals, separately for men and women. The gross earnings shortfall of single-origin Aboriginal men was 24 percent, of which 41–58 percent was unexplained. For mixed-origin men, the shortfall was 14 percent, with an unexplained portion of 39–51 percent. Single-origin Aboriginal women earned 17 percent less than white women, where 46–53 percent could not be explained. The raw gap of mixed-origin women was 9 percent with the unexplained portion being 26–37 percent.
Earnings differentials among ethnic groups in Canada 37 Wannell and Caron (1994) used data from the 1992 National Graduates Survey (NGS) to examine earnings of 1990 post-secondary graduates for Aboriginals, visible minorities and Whites (combined male and female samples). Since their sample comprises recent post-secondary, it is perhaps not surprising that they found the observed average earnings of the three groups to be about the same; the decomposition of the small gaps indicated an absence earnings discrimination. Kuhn and Sweetman (1998) used the 1991 Census to analyze the white– Aboriginal earnings gap, separately for men and women. Single-origin Aboriginal men faced a gross wage gap of 25 percent of which 52–64 percent was due to background characteristics. The gross differential for multipleorigin Aboriginal men was only 8 percent, one-half of which was due to endowment differences. The gross earnings gap of single-origin women was 12 percent, 92 percent of which reflected discrimination. Multiple-origin women had a relatively small wage gap of 3 percent, one-third of which could not be explained. DeSilva (1999) also used the 1991 Census to analyze gender-specific white– Aboriginal earnings differentials. For the combined groups of Aboriginal men the gross earnings shortfall was 34 percent; 38–43 percent could not be explained. Single-origin Aboriginal men had a gap of 56 percent, with an unexplained portion of 34–45 percent. Multiple-origin men faced a wage gap of 33 percent with discriminatory effects of 23–30 percent. With regard to women, the earnings gap of all Aboriginals was 23 percent, with 32 percent attributable to discrimination. In the case of single-origin women, the earnings gap was 28 percent, with an unexplained portion of 18–35 percent. Multipleorigin women had a disadvantage of 15 percent, with a discrimination portion of 40–51 percent. Group 2: Separate analysis for immigrants and non-immigrants Studies not based on 1991 Census data Boyd (1992) applied multiple classification analysis to 1986 Census data in examining earnings differences across an assortment of white and visible minority groups, separately by nativity status and gender. Reitz and Breton (1994) repeated Boyd’s analysis with a sharper focus on visible minorities and a broader set of control variables. Discriminatory effects in Boyd were reflected by the net ratio: the standardized earnings of each ethnic group divided by the overall Canadian average. For broadly defined groups of Canadian-born whites and visibles, neither ethnic group enjoyed earnings advantages; the net ratio was almost the same for white and visible minority men (102 and 98, respectively) as was the case for their female counterparts (101 and 103, respectively). With regard to foreign-born whites and visibles, the net ratio was 98 for white men and 80 for visible minority men. The corresponding values for women were 99 and 89.
38 Morton A. Stelcner Immigrant visible minority men thus faced an earnings disadvantage of 20 percent, while immigrant visible minority women had an earnings loss of 11 percent. A different story emerged when detailed immigrant ethnic groups were considered. Most foreign-born white groups earned about the same as the overall average, but there were some exceptions. Greek immigrant men had a disadvantage of 12 percent, while a premium was enjoyed by British (12 percent), Jews (10 percent), and Scandinavians (6 percent). Among immigrant white women, there was a small earnings loss for Dutch, East European, and Portuguese (3–4 percent), while an advantage was enjoyed by French (8 percent), Croatians (4 percent), and Jews (3 percent). Considering immigrant visible minority men, Filipinos had a 21 percent shortfall, followed by Blacks (12 percent), South-East Asian and visible minority British (11 percent each) and Chinese (10 percent). Only West Asian immigrant women had a noticeable penalty of 13 percent, while Chinese women enjoyed a slight premium of 2 percent. Reitz and Breton (1994) compared the earnings of all whites to several other origins. Among the Canadian-born, a statistically significant discrimination portion was reported for the following groups: Aboriginal men (73–8 percent of the 0.37 gross gap), Black men (54 percent of the 0.24 raw gap), and Aboriginal women (78 percent of the 0.23 gross gap). Canadian-born women of Multiple/Other origins earned 3 percent more than their white counterparts of which 33–67 percent was due to their background attributes. For immigrant men and women, most of the earnings disadvantage of visible minority groups (relative to white immigrants) could be explained by productivity attributes. Among immigrant men, Blacks faced a gross gap of 26 percent, and a net gap of 17–22 percent. Similarly, East/South-East Asian men had a gross gap of 21 percent, and a net shortfall of 17–21 percent. For South and West Asians, the gross gap (11 percent) and net gaps (12–13 percent) were about the same. Among immigrant women, Black women earned 5 percent more than white women, an advantage almost entirely due to their productivity characteristics. Similarly, the earnings of East/South-East Asians were 4 percent higher than white women, while their standardized earnings were 5–7 percent higher. Immigrant women of Multiple/Other visible origins also had an earnings advantage of 5 percent, but the net gap was not statistically significant. South and West Asian women had a gross earnings disadvantage of 6 percent, while the net disadvantage was 10–13 percent. Hum and Simpson (1999) employed data from the 1993 Survey of Labour and Income Dynamics to analyze earnings differences between whites and six visible minority groups: Blacks, Indo-Pakistani, Chinese, Non-Chinese Orientals (Koreans, Japanese, Filipinos, and South-East Asians), Arabs, and Latin Americans. Native-born and immigrants were considered separately, as were men and women. The reference group was that of whites. First, they considered the pooled samples of native- and foreign-born
Earnings differentials among ethnic groups in Canada 39 Canadians with controls for immigration status. When a single categorical variable was used for visible minority status, the estimates showed a 14 percent disadvantage for men and a 7 percent shortfall for women. When specific subgroups of visible minorities were considered, the results for men showed significant disadvantages for four groups: Blacks, 19 percent; Non-Chinese Orientals, 16 percent; Indo-Pakistani, 13 percent; and Chinese, 12 percent. The significant estimates for women are Chinese and Indo-Pakistani, 9 percent and 3 percent, respectively. The authors repeated the exercise for separate samples of Canadian-born and immigrants. For Canadian-born men and women, visible minority membership did not have significant effects on earnings, with one exception: Canadian-born Black men faced a substantial earnings penalty of 24 percent. With regard to immigrants, the combined group of visible minority men faced a shortfall of 15 percent, but only four sub-groups of immigrant men had a wage disadvantage: Non-Chinese Orientals, 23 percent; Blacks, 21 percent; Indo-Chinese, 16 percent; and Pakistani 15 percent. Among immigrant women, only Non-Chinese Orientals suffered a wage disadvantage of 13 percent. Studies that use the 1991 Census DeSilva and Dougherty (1996) examined the earnings gap between (1) combined native-born and immigrant samples of white and visible minority men and (2) between Canadian-born visibles and whites. The respective gross gaps were 26.9 percent and 3.5 percent. The decompositions of these gaps showed that for the combined samples about 15 percent was due to endowment differences, while for the native-born sample 65–85 percent could be explained by observable characteristics. Swidinsky (1997) decomposed the earnings gaps between broadly defined groups of whites and visibles, as well as between whites and four ethnic groups: Blacks; Chinese; South Asians; and South-East Asians. The analysis differentiated between men and women and between native-born and immigrants. For the two broad groups of whites and visibles and combined nativitystatus samples (with controls for immigration status), the gross earnings gap for men was 0.199 and the net gap was 0.057, so that 30 percent was explained by endowment differences. The gross and net gaps of women were small (1.3 percent and –2.5 percent, respectively). The samples of whites and visibles were then stratified by nativity status. The white-visible gross gap for Canadian-born men was 16 percent, of which 57 percent was due to background characteristics. Canadian-born visible minority women had about the same gross and net earnings advantage (about 5 percent). For immigrant men, the white-visible gross differential was 31 percent, with an endowments portion of 57 percent. For immigrant women the gross difference was 5 percent, with an endowments component of 36 percent.
40 Morton A. Stelcner There was much variation in the results of the four ethnic groups differentiated by nativity status. Among Canadian-born men, Blacks faced the largest gross earnings disadvantage (0.339) and the largest net shortfall (0.183), so that 54 percent was due to characteristics. South-East Asian men earned more than their white counterparts, with a gross earnings advantage of –0.054, and would have earned even more as indicated by their net gap of –0.078. Among Canadian-born women, Blacks faced a gross gap of 0.035 and a net gap of 0.013, so that 36 percent was due to characteristics. South Asian women earned about 10 percent less than their white counterparts, and 81 percent was due to characteristics. Chinese women earn 20 percent more, but after controlling for characteristics they would have earned 15 percent less. For South-East Asian women the gross and net earnings ratios were about the same. Turning to immigrant groups, only 36 percent of the gross gap (0.356) of Black men could be explained by work-related characteristics. Chinese men faced a 0.267 gross gap, with an endowments portion of 72 percent; South-East Asian men had a 0.407 gap and 68 percent was due to characteristics, while the gross gap of South Asians was 0.196 and 60 percent reflected endowment differences. The earnings shortfall among women was smaller than among men. The gross, net gaps and endowments portions were: Blacks (0.027, –0.044, –164 percent), Chinese (0.022, 0.042, 190 percent), South Asian (0.056. 0.026, 46 percent), and South-East Asian (0.072, 0.032, 45 percent). A comparison of the gross gap (0.027) and the net gap (–0.044) of Black immigrant women indicated that they would earn more than white immigrant women. However, the same comparison for Chinese immigrant women (0.022 and 0.042) suggested that they would earn less, indicating that they received an “unexplained” premium. Baker and Benjamin (1997) analyzed the male earnings gaps of native-born Aboriginals and four visible minorities: Blacks; Chinese; South Asians; and South-East Asians. They used the earnings norm of a somewhat unusually defined group of white men, namely, a residual category that comprised all ethnic groups excluded in the preceding visible minority groups; this reference included visible minorities such as (visible) Latin American, Arabs and West Asians. First, they compared combined immigrant and native born samples of whites and visible groups; then they considered separate samples differentiated by nativity status. Their estimates of discrimination varied with the scope of statistical controls (e.g. home language, marital status, and occupation). The upper and lower limits of their (statistically significant) estimates were as follows. For the pooled nativity-status samples, the gross earnings gap was largest among South-East Asians (0.270), followed by Blacks (0.254), Aboriginal (0.187), Chinese (0.169), and South Asian (0.165). The minimum and maximum values of the endowment component were: South-East Asian (–36 percent and 49 percent); Blacks (–9 percent and 17 percent); Aboriginal (45–55 percent); Chinese (–16 percent and 72 percent), and South Asian (–38 percent to 16 percent).
Earnings differentials among ethnic groups in Canada 41 Among the Canadian-born, the gross gap and the range of the endowment portion were: Blacks (0.293, 25 percent and 42 percent); Chinese (0.193, 22–70 percent); South Asian (0.536, 19–59 percent); and Aboriginal (0.179, 49–53 percent). The raw gap of South-East Asian (–0.022) was not statistically significant. The corresponding results for immigrants were: Blacks (0.312, 16–31 percent); Chinese (0.232, 23–81 percent); South Asian (0.188, 12–49 percent); and South-East Asian (0.396, 21–64 percent). Pendakur and Pendakur (1998b) analyzed ethnic earnings differentials using two methods. They found that among Canadian-born men, the raw differential was 0.208 for visibles and 0.348 for Aboriginals, while the respective net gaps were 0.124 and 0.222, so that the unexplained portion was 40 percent for visibles and 36 percent for Aboriginals. With regard to immigrant men, visible minorities earned 25 percent less than native-born whites; 62 percent of this shortfall could not be explained. Immigrant whites earned about 10 percent more than their Canadian-born counterparts, but after controlling for characteristics, they earned 11 percent less. The gross and net earnings gaps between Canadian-born white and visible minority women were negligible (–1.3 percent and 0.5 percent, respectively). The gross gap of Aboriginal women was 19 percent, of which 35 percent could be attributed to characteristics. Immigrant white and Canadian-born white women earned the same: the gross and net gaps were 0.018 and 0.006. The earnings gap between foreign-born visible minority and native-born white women was 10.5 percent; only 18 percent could be explained by characteristics. The authors also estimated earnings discrimination by using dummy variables. Among Canadian-born men, earnings penalties were reported for Greek men (15 percent); Balkan men (11 percent); and single-origin Aboriginals (23 percent); as well as for men of mixed Aboriginal plus white origins (16 percent). Among Canadian-born women, earnings penalties were borne by Greek women (15 percent) and women of mixed Aboriginal plus white origins (17 percent). For Canadian-born visible minority groups, they found significant earnings disadvantages for Black (17 percent) and Chinese men (12 percent). A very different pattern of results emerged when immigrants were considered. Among white immigrants, there was a significant earnings gap only for Spanish women (16 percent). For men, Greek immigrants faced a penalty of 17 percent, while a group of immigrant men who identified themselves as “Canadian” had a shortfall of 12 percent. With regard to visible minorities, most immigrant men faced large and significant earnings penalties; the exception was foreign-born Chinese men. The penalty among men ranged from 14 percent to 22 percent, with the largest shortfall borne by Blacks (22 percent), followed by a gap of about 20 percent for Latin Americans and men of mixed visible with white origins. There was a shortfall of 18–19 percent for Vietnamese, West Asian, and multiple visible with visible origins. The smallest disadvantage (about 15 percent) was faced by four groups of men: Arab, South Asian, and other visible, and visible with British origins. The
42 Morton A. Stelcner results for visible minority immigrant women showed that five groups faced an earnings penalty: Vietnamese (15 percent); Blacks (12 percent); West Asian (10 percent); mixed visible with white origins (12 percent); and mixed visible with visible origins (11 percent). Group 3: studies that use statistical controls for immigration status Kuch and Haessal (1979), in perhaps the first Canada-wide study of the subject, used 1971 Census data to examine earnings differences across several white male ethnic groups (British; French; North European; East European; Italian; and Jewish), two non-white groups (Oriental and Native Indian), and a residual category called Other and Unknown. There were too few observations to consider Blacks. Using standardized deviations from the overall geometric mean, they found that Jewish men enjoyed a substantial “unexplained” premium (46 percent), as did Orientals (13 percent); British (5 percent); and East Europeans (4 percent). The largest net earnings shortfall was suffered by Native Indians (23 percent), followed by French and Other (7 percent each) and Italian (3 percent). Stelcner and Kyriazis (1995) used the 1981 Census to analyze earnings differences across a large array of male and female white (single-origin European) ethnic groups, but owing to data limitations in the Census their analysis included only two visible minority groups (Blacks and Chinese); these problems also precluded the consideration of Aboriginals. Using the earnings structure of workers of British origin as the benchmark, their main findings were that the standardized or net earnings of most white ethnic groups were similar to those of British. There were some important exceptions. The standardized earnings of Portuguese, Chinese and Italian men were less than their actual earnings, so that these groups enjoy an unexplained premium of 59 percent, 17 percent, and 9 percent, respectively. By contrast, Black men faced a gross earnings disadvantage of 18 percent of which 83 percent could be not be explained. The gross earnings gap among women was smaller than among men. The decomposition results for women revealed that 55 percent of the British–Black gap (0.132) could not be attributed to characteristics. For the remaining ethnic groups, the difference between actual and standardized earnings was small. Howland and Sakellariou (1993) used the 1986 Census to investigate the gender-specific earnings gap between all whites (single-origin Europeans) and Blacks, South Asians and South-East Asians. Almost all of the 22 percent gross earnings disadvantage of Black men could not be explained by endowment differences. South Asian men had gross earnings shortfall of 2.8 percent, but a net earnings advantage of 2 percent. For South-East Asians, only 36 percent of the 17 percent gross gap could be explained. The results for women were somewhat different. The gross earnings gap of about 4 percent was about the same for South Asian and South-East Asian women, but the
Earnings differentials among ethnic groups in Canada 43 explained portions were 97 percent and 32 percent, respectively. Black women earned about 5 percent less than white women, but had a net earnings advantage of just over 1 percent. In a more recent study, Stelcner and Shapiro (1999) used the 1991 Census to analyze ethnic earnings differentials among 37 white, visible minority and Aboriginal ethnic groups, separately for men and women. They address three important inter-related issues in assessing ethnic earnings discrimination. First, the 1991 Census revealed that 29 percent of the total population and 32 percent of the Canadian-born population reported a mixed ethnic background. Given the percentages, it would be inappropriate to exclude them from the analysis or to add multiple responses to single responses. Separate categories were established for multiple ethnic origins. Second, the issue of ethnic heterogeneity in the labor market was explicitly raised in the Abella Report (Abella 1984: 46): “Although it is unquestionably true that many non-whites face employment discrimination, the degree to which different minorities suffer employment and economic disadvantages varies significantly by group and by region.” Stelcner and Shapiro (1999) addressed this issue by considering the variation in earnings across thirty-seven separate groups. Third, the choice of a benchmark group is critical; rather than arbitrarily choosing a benchmark group, Stelcner and Shapiro follow Oaxaca and Ransom (1994) and used the earnings structure of the pooled sample of all groups as the non-discriminatory norm. Also, to gauge whether discrimination estimates varied with the choice of the non-discriminatory norm they used the earnings structure of the all whites to analyze the earnings gaps of Aboriginals and visible minorities. Their main findings are now examined.
Results for men Earnings of the aggregate group of white workers were about 3 percent higher than the national average, compared to 15 percent less for the visible minority group. The gross earnings gap was small (less than 3 percent) for Spanish, mixed British plus French, Polish, Italian, and Multiple (white) origins. Several white sub-groups enjoyed higher than average earnings: Balkan and German, Hungarian and Ukrainian (5–7 percent); Canadian, British, and Other European (9–11 percent); Other Single Origins (15 percent); and Other West European origins (17 percent). Jewish men earned a remarkable 35 percent more. Four groups of whites, on the other hand, had significant earnings deficits: Latin American (30 percent); Greek (28 percent); Portuguese (10 percent); and French (6 percent). The raw earnings gap also varied among Aboriginal groups. Those with multiple origins earned 24 percent less than the national average, while singleorigin Aboriginal men earned a massive 85 percent less. The gross earnings disadvantage among individual visible minorities also showed variation. At
44 Morton A. Stelcner the low end were Chinese with 8 percent less, followed by South Asians (9 percent); Other East–South-East Asians (10 percent); and Multiple origins (15 percent). In the mid-range of 18–20 percent were Arabs; Filipinos; West Asians; and Other Single origins. Black men faced a deficit of 23 percent; Vietnamese and (visible) Latin Americans had the largest shortfalls of 34 percent and 40 percent, respectively. Discriminatory effects were small or not statistically significant for most individual white ethnic groups, but there were notable exceptions. The discrimination component accounted for about 60 percent of the earnings disadvantage of Greek men and 33 percent of Latin American men. Substantial positive discrimination effects (“nepotism”) were present for Portuguese; the excess of the standardized earnings gap (24 percent) over the gross gap (10 percent) indicates that they enjoyed higher than national average returns to productivity characteristics. Two-thirds of the raw earnings disadvantage of both single- and mixedorigin Aboriginal men could be attributed to productivity characteristics. About two-thirds of the gross gaps (85 percent and 24 percent, respectively) of these groups could be explained by their lesser endowments of work-related traits. With regard to visible minority groups, most of the estimated discriminatory differentials were statistically significant. For the combined group of visible minorities, discrimination accounted for 57 percent of the raw earnings gap. If this group were paid according to the pooled earnings structure, the earnings shortfall would decrease from 15 percent to 7 percent. The statistically significant discrimination portion of specific groups varied considerably from a low of 32 percent for Latin Americans to 110 percent for Other East–South-East Asian. In most cases, the earnings of individual visible groups would increase if they were paid according the pooled earnings structure. The net earnings gap would largely disappear for Chinese; Filipino; Other South-East Asian; and South Asian. However, the remaining sub-groups would still face a net earnings shortfall: Latin Americans (28 percent); Arabs (12 percent); Blacks (11 percent); and Multiple Visible (8 percent).
Results for women The pattern of ethnic earnings differentials was very different for women than for men. The raw earnings gap was trivial (less than 1 percent) for the combined group of whites (89 percent of the sample) and the aggregate group of visibles (9 percent of the sample). However, there were interesting differences across the detailed ethnic groups. Mixed British and French and Multiple White origins earned about the same as the national average. Groups with above average included British, Other West European, and Canadian (4–6 percent); Italian, Polish, Spanish, Ukrainian, and Other European (7–8 percent); Balkan (12 percent); Other
Earnings differentials among ethnic groups in Canada 45 Single origins (16 percent) – and, as was the case for men, a substantial 30 percent for Jewish women. Groups with below-average earnings were French, German, and Portuguese (4–6 percent); Hungarian and Greek (7–8 percent); Dutch (11 percent); and White Latin American (27 percent). Aboriginal women, like their male counterparts, faced an earnings deficit: 19 percent for those with multiple origins, and a remarkable 51 percent for women with a single origin. The pattern of earnings disparities of visible minority women differed from that of their male counterparts. Women with Multiple Visible and Other East–South-East Asian origins earned about the national average, as well as the average of all white women. Three groups of visible minority women earned more than the national average (or the average of all whites): Blacks (4 percent); Chinese (8 percent); and Filipino (18 percent); while five groups faced gross earnings shortfalls: South Asian (8 percent); Arab (12 percent); West Asian (13 percent); Vietnamese (20 percent); and Latin American (24 percent). Decomposition results for women in white ethnic groups Discrimination estimates were not significant for most white ethnic groups, with some exceptions. If Hungarian women were paid according to the pooled earnings structure, their observed earnings deficit of 7 percent would become an earnings advantage of 4 percent. Like their male counterparts, discrimination effects were present for Greek and Latin American women: 67 percent and 51 percent, respectively. Decomposition results for Aboriginal and visible minority women Discrimination accounted for only 12 percent of the raw gap of single-origin Aboriginal women and for 28 percent for those with mixed origins. This indicates that, as was the case for Aboriginal men, there was little difference between their gross and standardized earnings disadvantage. The pattern of results for individual groups of visible minority women differed from that of their male counterparts. Significant discrimination effects were found for only five groups. Filipino women earned 18 percent more than the national average, but would have earned 26 percent more had they been paid according to the pooled earnings norm. The unexplained residual accounted for 33 percent of the gross gap for Latin Americans, while for Arab and Vietnamese women it was about 40 percent of the gross gap. Chinese women enjoyed a premium of 3 percent, representing one-third of their gross earnings advantage. For the remaining groups, discrimination effects were not statistically significant. The study also conducted sensitivity tests to see if the discrimination estimates varied with the choice of the non-discriminatory pay structure (see 1999 paper for details).
46 Morton A. Stelcner
Conclusions This chapter has presented an overview Canadian research findings on ethnic earnings differences. The estimates of earnings discrimination vary widely and in several instances are even incongruous. Differences in empirical methodology contributed to the variance in the findings in this chapter, yet it appears that the intertwined effects of ethnicity and immigration status, coupled with the choice of the benchmark earnings structure, play an important role in understanding the different empirical results. While most studies give due recognition to the interplay of ethnicity and immigration, the effects of ethnicity (in terms of detailed groups) and nativity status remain confounded because small sample sizes continue to hinder Canadian research on the topic. The review of the empirical findings in this chapter suggests a number of general conclusions about estimating earnings discrimination across ethnic groups. First, white sub-groups are sufficiently heterogeneous, so that combining them into one category of “whites” and using their earnings structure as a benchmark is problematic. Sufficient evidence suggests that some white groups are disadvantaged, while others are favored. Second, the groups comprising visible minorities also differ among themselves and combining them in one “visible minority” category may be misleading in ascertaining the extent and incidence of earnings discrimination. Compelling evidence supports the idea that earnings discrimination was by no means uniform across visible minority sub-groups. Third, due consideration must also be given to multiple ethnic origins among whites, Aboriginals, and visible minorities. Fourth, discrimination estimates for the visible minority groups can be sensitive to choice of the earnings norm, either that of all ethnic groups (whites, visibles, and Aboriginals) or of the combined group of whites. Discrimination estimates based on the pooled sample method tended to be much smaller than those yielded by using the earnings structure of the combined group of whites. The set of Canadian empirical results suggests that the precision of the customary estimates of ethnic earnings discrimination in Canada (and elsewhere) must be interpreted with care in the light of ethnic heterogeneity, immigration effects, and the choice of the “no-discrimination” benchmark. At the policy level, it seems advisable to take heed of these considerations in designing, implementing and evaluating the impact of policies that combat labor market discrimination.
Appendix Table 3A.1 Ethnic origins, definitions Not visible Single origins British
English, Irish, Scottish, Welsh, other British, n.i.e.
Earnings differentials among ethnic groups in Canada 47 Balkan
Albanian, Bulgarian, Croatian, Macedonian, Serbian, Slovenian, Yugoslav, n.i.e.
Canadian Dutch (Netherlands) French Acadian, French, French Canadian, Franco-Manitoban, Franco-Ontarian, Québécois German Greek Hungarian (Magyar) Italian Jewish Latin American Argentinian, Brazilian, Chilean, Colombian, Ecuadorian, Guatemalan, Hispanic, Mexican, Nicaraguan, Peruvian, Salvadorean, Uruguayan, Other Latin, Central and South American, n.i.e. Polish Portuguese Spanish Ukrainian Other European Baltic (Estonian, Latvian, Lithuanian), Finnish, Danish, Icelandic, Norwegian, Swedish, Other Scandinavian, n.i.e., Byelorussian, Czech and Slovak, Roma (Gypsy), Roumanian, Russian, Cypriot, Maltese, Basque, Other Europe, n.i.e. Other W. European Austrian, Belgian, Flemish, Luxembourg, Swiss Other single origins Origins not included elsewhere (e.g. American, Australian/ New Zealander) Multiple origins British and French only Combinations of above (e.g. Dutch and German, French and Italian) Visible minorities Single origins Arab Black/Caribbean Chinese Filipino Latin American
South Asian Vietnamese West Asian E./South-East Asian Other single origins
Egyptian, Iraqi, Lebanese, Mahgrebian, Palestinian, Syrian, Arab, n.i.e. Black, Ghanaian, African Black, n.i.e., Barbadian, Cuban, Guyanese, Haitian, Jamaican, Trinidadian and Tobagonian, West Indian, Other Caribbean, n.i.e. Argentinian, Brazilian, Chilean, Colombian, Ecuadorian, Guatemalan, Hispanic, Mexican, Nicaraguan, Peruvian, Salvadorean, Uruguayan, Other Latin, Central and South American, n.i.e. Bengali, Punjabi, Singhalese, Tamil, Bangladeshi, n.i.e., East Indian, n.i.e., Pakistani, n.i.e., Sri Lankan, n.i.e. Afghan, Armenian, Iranian, Israeli, Kurdish, Turkish, West Asian, n.i.e. Burmese, Cambodian, Indonesian, Japanese, Korean, Laotian, Malay, Mongolian, Thai, Tibetan, Other Asian, n.i.e. Origins not included elsewhere (e.g. Ethiopian, Somali, Other African, n.i.e., Fijian, Polynesian, Other Pacific Islanders)
48 Morton A. Stelcner Multiple origins Aboriginal peoples Single origins Multiple origins
Combinations of above (e.g. Chinese and Black, British and South Asian) North American Indian, Inuit Combinations of above (e.g. Métis, North American Indian or Inuit plus other)
Source: Statistics Canada (1992). Note n.i.e. = not included elsewhere.
Notes 1 For aspects of immigration and ethnic populations in Canada, see, Beaujot (1991); Driedger (1996); Green and Green (1999); McVey and Kalbach (1995). 2 The ethnic profile comprises more than 100 distinct ethnic groups. Although immigration levels have fluctuated widely throughout Canadian history, since 1950 the proportion of foreign-born in the population hovered around 16 percent, rising to 17.4 percent in 1996. By comparison, in the early 1990s the ratio was 8 percent in the US, 8.4 percent in Germany, 6.4 percent in France, and 3.5 percent in Britain. 3 According to the 1991 Census the designated groups constituted about two-thirds of the Canadian labor force: women, 45.9 percent; visible minorities 9.1 percent; Aboriginal peoples 3.0 percent, and (from The 1994 Annual Employment Equity Report) persons with disabilities 6.5 percent. 4 See for example: Miller (1987); Shapiro and Stelcner (1987); Baker et al. (1995); Kidd and Shannon (1996); Gunderson (1998); Chaykowski and Powell (1999a, 1999b). 5 See: Breslaw and Stelcner (1987); Harkness (1993); Hum and Simpson (1996); Maki (1993). 6 Research on language and earnings includes Christofides and Swidinsky (1994); Shapiro and Stelcner (1997); Vaillancourt (1997); Breton (1998); Pendakur and Pendakur (1998a). 7 The issues are discussed in detail by Shapiro and Stelcner (1987).
References Abella, R. S. (1984) Equality in Employment: A Royal Commission Report, Supply and Services Canada, Cat. No. MP43-157/1, Ottawa. Baker, M. and D. Benjamin (1994) “The Performance of Immigrants in the Canadian Labor Market,” Journal of Labor Economics, 12: 3, 369–405. Baker, M. and D. Benjamin (1997) “Ethnicity, Foreign Birth and Earnings: A Canada/US Comparison,” in M. G. Abbott, C. M. Beach and R. P. Chaykowski (eds), Transition and Structural Change in the North American Labour Market, IRC Press, Queen’s University, Kingston, Ontario. Baker, M., D. Benjamin, A. Desaulniers and M. Grant (1995) “The Distribution of the Male/Female Earnings Differential: 1970–1990,” Canadian Journal of Economics, 28: 3, 479–501. Beaujot, R. P. (1991) Population Change in Canada: The Challenges of Policy Adaptation, McClelland and Stewart, Toronto.
Earnings differentials among ethnic groups in Canada 49 Blinder, A. S. (1973) “Wage Discrimination: Reduced Form and Structural Estimates,” Journal of Human Resources, 8: 4, 436–65. Bloom, D. E., G. Grenier and M. Gunderson (1995) “The Changing Labor Market Position of Canadian Immigrants,” Canadian Journal of Economics, 27: 4b, 987– 1001. Boyd, M. (1992) “Gender, Visible Minority, and Immigrant Earnings Inequality: Reassessing an Employment Equity Premise,” in V. Satzewich (ed.), Deconstructing a Nation: Immigration, Multiculturalism and Racism in ’90s Canada, Fernwood Publishing, Halifax, 279–321. Breslaw, J. A. and M. Stelcner (1987) “The Effect of Health on the Labor Force Behaviour of Elderly Men in Canada,” Journal of Human Resources, 22: 2, 490– 517. Breton, A. (ed.) (1998) Economic Approaches to Language and Bilingualism, Official Languages Branch, Department of Canadian Heritage, Cat. No. CH3-2-7/1998E, Ottawa. Chaykowski, R. P. and L. M. Powell (eds) (1999a) Women in the Canadian Labour Market, Canadian Public Policy/Analyse de Politique, 25: 1, Special Supplement. Chaykowski, R. P. and L. M. Powell (eds) (1999b) Women and Work, McGill–Queen’s University Press, Montreal and Kingston. Christofides, L. and R. Swidinsky (1994) “Wage Determination by Gender and Visible Minority Status: Evidence From the 1989 LMAS,” Canadian Public Policy/ Analyse de Politiques, 20: 1, 34–51. DeSilva, A. (1999) “Wage Discrimination Against Natives,” Canadian Public Policy/ Analyse de Politique, 25: 1, 66–85. DeSilva, A. and C. Dougherty (1996) Discrimination Against Visible Minority Men, Resources and Development Canada, Applied Research Branch, Strategic Policy, W-96-6E, Ottawa. Driedger, L. (1996) Multi-Ethnic Canada: Identities and Inequalities, Oxford University Press, Toronto. Employment Equity Act, Annual Report (1994), Employment and Immigration Canada, Ottawa. George, P. and P. Kuhn (1994) “The Size and Structure of Native-Wage Differentials in Canada,” Canadian Journal of Economics, 27: 1, 20–42. Grant, J. (1999) “Evidence of New Immigrant Assimilation in Canada,” Canadian Journal of Economics, 32: 4, 930–55. Green, A. G. and D. A. Green (1999) “The Economic Goals of Canada’s Immigration Policy: Past and Present,” Canadian Public Policy/Analyse de Politique, 25: 4, 425– 51. Gunderson, M. (1998) Women and the Canadian Labour Market: Transitions Towards the Future, Statistics Canada Monograph Series, Cat. No. 96-321-MPE No. 2, ITP Nelson and Statistics Canada, Toronto. Harkness, J. (1993) “Labour Force Participation by Disabled Males in Canada,” Canadian Journal of Economics, 26, 878–89. Howland, J. and C. Sakellariou (1993) “Wage Discrimination, Occupational Segregation and Visible Minorities in Canada,” Applied Economics, 25, 1413–22. Hum, D. and W. Simpson (1996) “Canadians with Disabilities and the Labour Market,” Canadian Public Policy/Analyse de Politiques, 22: 3, 285–99. Hum, D. and W. Simpson (1999) “Wage Opportunities for Visible Minorities in Canada,” Canadian Public Policy/Analyse de Politiques, 25: 3, 381–94.
50 Morton A. Stelcner Kidd, M. and M. Shannon (1996) “The Gender Wage Gap: A Comparison of Australia and Canada,” Industrial and Labor Relations Review, 49: 4, 729–46. Kuch, J. and W. Haessel (1979) An Analysis of Earnings in Canada, Statistics Canada, Cat. No. 99-758, Ottawa. Kuhn, P. and A. Sweetman (1998) Assimilation and Economic Success in an Aboriginal Population: Evidence from Canada, Canadian International Labour Network (CILN) W.P. 18, Hamilton, Ontario. Kuo, C.-Y. (1976) “The Effect of Education on the Earnings of Indian, Eskimo, Métis, and Workers in the Mackenzie District of Northern Canada,” Economic Development and Cultural Change, 24: 2, 387–98. Mäki, D. (1993) “The Economic Implications of Disability Insurance in Canada,” Journal of Labor Economics, 11, S148–S169. McVey, W. A. and W. E. Kalbach (1995) Canadian Population, Nelson Canada, Scarborough, Ontario. Miller, P. W. (1987) “Gender Differences in Observed and Offered Wages in Canada, 1980,” Canadian Journal of Economics, 20: 2, 225–44. Oaxaca, R. (1973) “Male–Female Wage Differentials in Urban Labor Markets,” International Economic Review, 14: 3, 693–709. Oaxaca, R. and M. R. Ransom (1994) “On Discrimination and the Decomposition of Wage Differentials,” Journal of Econometrics, 61: 1, 5–21. Patrinos, H. A. and C. N. Sakellariou (1992) “North American Indians in the Canadian Labour Market: A Decomposition of Wage Differentials,” Economics of Education Review, 11: 3, 257–66. Pendakur, K. and R. Pendakur (1998a) “Speak and Ye Shall Receive: Language Knowledge as an Capital,” in A. Breton (ed.), Economics Approaches to Language and Bilingualism, Official Languages Branch, Department of Canadian Heritage, Ottawa. Pendakur, K. and R. Pendakur (1998b) “The Colour of Money: Earnings Differentials Among Ethnic Groups in Canada,” Canadian Journal of Economics, 31: 3, 518–48. Reitz, J. G. and R. Breton (1994) The Illusion of Difference: Realities of Ethnicity in Canada and the United States, C.D. Howe Institute, Toronto. Shapiro, D. M. and M. Stelcner (1987) “The Persistence of the Male–Female Gap in Canada, 1970–1980: The Impact of Equal Pay Laws and Language Policies,” Canadian Public Policy/Analyse de Politique, 13: 4, 462–76. Shapiro, D. M. and M. Stelcner (1997) “Language and Earnings in Quebec: Trends Over Twenty Years: 1970–1990,” Canadian Public Policy/Analyse de Politique, 23: 2, 115–40. Statistics Canada (1992) 1991 Census Dictionary: Reference, Statistics Canada, Cat. No. 92-301E, Ottawa. Stelcner, M. (1999) “Earnings Differentials among Ethnic Groups in Canada: A Review of the Research,” National Economic Association, New York, mimeo. Stelcner, M. and N. Kyriazis (1995) “An Empirical Analysis of Earnings among Ethnic Groups in Canada,” International Journal of Contemporary Sociology, 32: 1, 41–79. Stelcner, M. and D. M. Shapiro (1999) “At Face Value: Earnings Differentials among Ethnic Groups in Canada, 1990,” Department of Economics, Concordia University, December, mimeo. Swidinsky, R. (1997) “Visible Minority Earnings Differentials: A Comparison of
Earnings differentials among ethnic groups in Canada 51 Immigrant and Native-Born Canadians,” Department of Economics, University of Guelph, September, mimeo. Vaillancourt, F. (1997) “Economic Costs and Benefits of Official Languages: Some Observations,” in New Canadian Perspectives: Official Languages and the Economy, Department of Canadian Heritage, Cat. No. CH3-2/5-E, Ottawa. Wannell, T. and N. Caron (1994) A Look at Employment Equity Among Recent Postsecondary Graduates: Visible Minorities, Aboriginal Peoples and the Activity Limited, Statistics Canada, Analytic Studies Branch, Research Paper Series No. 69, Ottawa.
4
Understanding recent empirical evidence on race and labor market outcomes in the USA* Patrick L. Mason
Introduction The sentiment against Black men appears, unfortunately, to be well earned, and it is difficult to believe that many competent Black workers are being denied opportunity. (Mead 1992: 114, quoted in Petterson 1998: 761) [T]he worldview of Blacks make them uniquely prone to attitudes contrary to work, and thus vulnerable to poverty and dependence. (Mead 1992: 148–51, quoted in Petterson 1998: 759) Racial inequality remains a substantial problem in American society. Competing explanations for this inequality, especially African American– white differences, often overlap but they are often also quite contentious. Recent studies on the role of race and labor market outcomes provide an excellent example of both consensus and contention. For example, there is a strong consensus that racial wage inequality declined sharply for nearly a decade after the passage of the Civil Rights Act of 1965. Further, it is accepted that there were multiple causes of this decline: strong economic growth and a tight labor market, great improvements in the quantity and quality of African American education relative to whites, and strong anti-discrimination and affirmative action enforcement. Collectively, these forces contributed to a rapid reduction in the residual wage differential between the mid-1960s and mid-1970s – that is, the fraction of the African American – white wage differential that cannot be explained by differences in individual attributes such as education and experience. The reduction in the residual wage was accepted as a sign that labor market discrimination was on the decline. There is also a consensus that this phase gave way to a slowdown in the movement toward racial wage equality in the mid-1970s. In fact, an expansion of the residual wage differential set in some time during the 1979–81 interval. However, explanations of the slowdown and eventual expansion of the racial wage differential are a source of great disagreement. For example, Darity and Mason (1998) conclude that African Americans receive a 15 percent wage penalty and nearly half of the raw wage differential is caused by racial discrimi-
Race and labor market outcomes in the USA 53 nation. James Heckman (1998) argues that labor market discrimination is no longer an important issue in the American economy; the slowdown and expansion in racial wage inequality since the mid-1970s is due to an increasing rate of return to cognitive ability that has increased general inequality, not discrimination. Loury (1998) argues that although labor market discrimination remains a minor problem, economists have not paid sufficient attention to supply-side inequities that are responsible for producing racial disparities in productivity-linked characteristics prior to entering the labor market. This chapter will review some of the recent empirical research that attempts to explain the slowdown and expansion in racial wage inequality.
Triumph of the market? A careful reading of the entire body of available evidence confirms that most of the disparity in earnings between blacks and whites in the labor market of the 1990s is due to the differences in skills they bring to the market, and not to discrimination within the labor market . . . [L]abor market discrimination is no longer a first-order quantitative problem in American society. (Heckman 1998: 101) For James Heckman, today’s racial inequality persists despite the meritocratic influences of the market and the federal government’s anti-discrimination activity during the eras of the Civil Rights and Black Power movements, 1954– 65 and 1965–73, respectively. African Americans are paid less because their laboring activity is worth less, because they come to the market with deficient skills. Lawrence Mead claims that the source of deficient skills is African American culture. Herrnstein and Charles Murray (1994) argue that the source of deficient skills among African Americans (and low-wage whites) is lower intelligence, that is, African Americans have lower genetic ability than whites. The point of agreement among these social analysts is that African Americans are inferior. The only conflict among them concerns the sources and extent of African American inferiority. Proponents of the labor-quality hypothesis argue that dramatic increases in the rate of return to educational quality (cognitive ability) are responsible for the increasing earnings inequality that has characterized the American economy since 1980. It is then argued that the distribution of cognitive skills is determined by a number of pre-market factors and processes, such as family structure and values, the quality of one’s neighborhood during an individual’s formative years, inherited ability, the quality of schools attended, and so forth. It is not often acknowledged that racial differences in educational quality have exhibited a substantial downward trend prior to and during the period of increasing racial wage inequality. Instead, labor-quality proponents steadfastly assert that African Americans have a relatively inferior set of pre-market skill accumulation factors.
54 Patrick L. Mason The presumed inferiority of African American’s pre-market skill accumulation factors are explained by discrimination in pre-market activities and institutions, cultural differences across racial groups, or alleged racial differences in genetic inheritance. Nevertheless, since pre-market factors, processes, and institutions are largely immune to market competition, there are no economic forces acting to equalize these variables across racial groups. Hence, it is concluded that the slowdown and eventual deterioration in interracial wage equality since the mid-1970s has occurred because a host of premarket factors are responsible for trapping the average African American in the lower half of the white skill distribution. Presumably, the increase in the price of skill has been sufficiently dramatic to magnify the declining interracial skills gap into an increasing racial wage gap. We may use a standard individual wage equation to illustrate our discussion. Consider (4.1), where X is a vector of productive attributes, such as experience, job tenure, and education, and other wage determinants, such as union status, region of the country, and residential location, and R is a dichotomous variable such that R = 1 if the individual is African American and 0 if the individual is white: ln(wage) = β0 + ΣβiX i + β r R + ε.
(4.1)
In a wide variety of studies and over a long period of time, economists find consistently that –0.10 < β r < –0.20. Since the gross or unadjusted African American–white male wage ratio is about 0.70, this coefficient implies that one-third to two-thirds of the earnings gap is due to race-specific factors. For many years, racial discrimination was assumed to be the primary reason behind the “unexplained” or “residual” racial wage gap. The labor-quality proponents (for example, see Neal and Johnson 1996) would explain βr < 0 by claiming that African Americans have a lower quality of labor (provide less skilled labor) than observationally equal white workers. This research suggests that βr < 0 because of omitted variable bias. The traditional human capital variables (years of education in particular, but also experience and job tenure) do not fully capture presumed white superiority in labor quality. Equation (4.2) presents the labor-quality hypothesis in its most general form. Earnings are positively correlated with unobserved ability (βt > 0), which is unequally distributed across racial groups. After controlling for unobserved ability, labor-quality proponents argue that race has no independent influence on earnings (βr = 0): ln(wage) = β0 + ΣβiX i + β r R + βtUnobserved Ability + ε.
(4.2)
Herrnstein and Murray (1994) use the Armed Forces Qualification Test (AFQT) from the National Longitudinal Survey of Youth to substantiate their claims regarding the socio-economic impact of racial differences in genetic
Race and labor market outcomes in the USA 55 ability. For most other labor-quality proponents, differences in AFQT scores also indicate differences in the quality of productive attributes. However, the AFQT represents an index of otherwise unobserved skills learned at home, in school, in one’s neighborhood, or perhaps even purchased in the market. Regardless of the ultimate source of inter-racial differences in pre-labor market unobserved skills — biology, pre-labor market discrimination, or culture – labor-quality theorists all claim to demonstrate that after adjusting for differences in test scores inter-racial differences in wage rates become inconsequential. There are economists who do not share Heckman’s evaluation of the literature on the economics of discrimination, or Mead’s and Herrnstein and Murray’s faith in white supremacy (that is, black inferiority). Rather than the AFQT, Murnane, Willet, and Levy (1995) used mathematics, reading, and vocabulary test scores from examinations administered to high-school seniors as proxy variables for pre-labor market differences in unobserved ability. They do find that an increasing rate of return to cognitive skill is an important explanatory variable for the 1980s increase in intra-racial wage inequality (0 < βt,1978 < βt,1986). They do not find that the increasing rate of return to ability can explain the rise in inter-racial wage inequality during this period (0 > βr,1978 > βr,1986). If both racial discrimination and the rate of return to skill increased during the period of their study (1978–86), then it is possible that an increasing rate of return to cognitive ability may explain more of the intra-racial rise in inequality than it does of the inter-racial rise in inequality. There is the additional issue of the appropriateness of AFQT scores as proxy for cognitive skills. Currie and Thomas (1995) alert us that neither the AFQT nor the more expansive examination from which it is derived, the Armed Services Vocational Aptitude Battery (ASVAB), is a racially unbiased proxy variable for pre-labor market inputs that might be expected to increase productive ability. They find that the influence of maternal education, maternal cognitive ability, and family income on a child’s cognitive skill development varies by race and by the age of the child. Hence, if raw AFQT or ASVAB scores are inserted into a wage equation, such as (4.2), they may produce misleading results. Indeed, when Currie and Thomas plot women’s wages against AFQT they find that African Americans obtain higher wages for any given level of AFQT. Given the racially distinct weights assigned to determinants of skill, it is reasonable to infer that there is systematic bias in the test score that is negatively correlated with being an African American. Neither the AFQT nor the ASVAB score captures the effect on family and school inputs equally across racial groups. Rodgers and Spriggs (1996b) also find that AFQT scores predict wages less well for African Americans than whites; and there are significant differences in the ability of common predictors to estimate African American and white AFQT scores. Rodgers and Spriggs further show that when the math and verbal components of the AFQT are used to predict wages, instead of the composite score, the coefficients on the verbal components are positive and
56 Patrick L. Mason significant for African Americans, while the coefficient on the math component is basically zero. The relationships for whites are exactly the opposite. To the extent that there actually is an inter-racial skills gap, inter-racial differences in AFQT scores severely over-estimate this gap. Because there are substantive inter-racial differences in how family (and other so-called “premarket”) environments are captured by the AFQT, racial differences in AFQT scores are greater than racial differences in skills rewarded in the labor market. Utilizing a measurement bias-corrected AFQT score (T) as a proxy of unobserved ability (4.3), Rodgers and Spriggs (1996b) do find that cognitive skill has a positive correlation with the wage rate, i.e. βt > 0. However, the magnitude of βr is approximately –0.15 with or without the inclusion of T in the wage equation: ln(wage) = β0 + Σβi X i + β r R + βtT + ε.
(4.3)
Beyond the fact of measurement bias in AFQT scores, there may be unobservable skills that are not proxied by the AFQT and that are larger for African Americans than whites. Mason (1997) and Goldsmith, Veum, and Darity (1997) address this issue. These studies explore the inter-relationships among race, culture (psychology), and skill acquisition. If racism is a reality of American life, then we should expect to find that African Americans must work harder or perform better in order to obtain the same educational or labor market outcome as whites. Whether this is a real or only perceived condition, it may have very interesting effects on individual behavior through its impact on group culture. For example, parents, community leaders, or other leaders for a group whose median standard of living is below the national average will impart to younger generations the knowledge that catching up to the national average requires that individual group members put forward supra-normal levels of effort in skill accumulation and have larger amounts of psychological capital. To the extent that educational effort is positively correlated with work effort and that work effort and psychological capital are components of “skill,” measured inter-racial inequality may under-estimate the true extent of discrimination. Mason (1995, 1999a) and Rodgers and Armentrout (1996) provide insight into the nature of the discriminatory process. Examining the changes in wage rates between 1986 and 1993, Rodgers and Armentrout (1996) estimate the following fixed-effects model: ∆ln(wage) = β1∆X + βt AFQT + γ Training + ε,
(4.4)
where Training = 1 if the individual participated in a training program between 1986 and 1993, but 0 otherwise; and α2 represents the growth in the price of skill from 1986 to 1993. Rodgers and Armentrout find that, “The market value of cognitive skills
Race and labor market outcomes in the USA 57 only rises for white men [who did not participate in a training program between 1986 and 1993] and black women.” However, when error-corrected AFQT scores are used there is no increase in the price of cognitive skill for African American women. They are also able to demonstrate that training provides whites with an additional 6.7–10.7 percent payoff over the premium African Americans receive for training. This additional white gain is due to higher white payoffs for actual experience and formal training. Because Rodgers and Armentrout explicitly control for ability, the racial differential in the return to training (and experience) provides prima facie evidence of racial discrimination in the face of competitive markets. Mason (1999a) estimates the following equation: ln(wage) = β0 + Σβi X i + γ1(percent white male) + γ2(percent white (4.5) female) + β r R + βt IQ + e, where IQ represents the score on a sentence completion test and the X vector includes a large number of variables related to the individual’s socio-economic and family background. For white males, I find that γ1,w > 0 and γ2,w > 0. That is to say, for white males, individual wage rates are positively correlated with the fraction of the laborforce that is white. For African American males, I find that individual wage rates increase as the fraction of the occupation which is white male increases (γ1, A > 0). On other hand, the percentage of white females in the workforce has no impact on the wage rate of African American men (γ2, A = 0). Finally, despite the presence of the cognitive skill variable (IQ), an exceptional number of socio-economic and family background variables, and the segregation variables, I also find that –0.17 < βr < –0.07. (The upper bound is produced by OLS estimation, while the lower bound is produced by random effects estimation.) So, just as Mason (1995) predicts, job segregation reduces the probability of an African American getting into a high-wage job and, given that an African American has obtained any job, 28–68 percent of the interracial wage gap is due to discrimination. Bratsberg and Terrell (1998) examine the impact of tenure and experience on racial wage differentials. They find no racial difference in the rate of return to tenure; however, African Americans receive a lower rate of return to either actual or potential labor market experience. For African Americans, but not for whites, there is a statistically significant difference between actual and potential experience. Bratsberg and Terrell suggest three explanations for these results. (1) Changes in the legal environment encouraged employers to substitute forms of discrimination. The advent of affirmative action (and antidiscrimination laws) has encouraged employers to substitute on-the-job training for higher wages for white workers. (2) Employee discrimination declines with tenure. Specifically, the value of currently employed African American workers increases with tenure as white worker disutility of working with African American workers declines over time. (3) Employers obtain
58 Patrick L. Mason more accurate information regarding the quality of employees as tenure increases; accordingly, incorrect perceptions of differences in worker ability across racial groups decline over time. Analyzing a National Longitudinal Survey of Youth (NLSY) sample of young men Oettinger (1996) finds that although there is no racial wage gap at labor force entry, a gap does develop over time. The gap emerges because African Americans receive a lower rate of return to experience and smaller gains to job mobility than whites. But Oettinger also finds an equal rate of return to tenure and equal wage growth during periods of no job change. Recent research on the industrial and occupational attainment processes helps to explain African Americans’ lower rate of return to experience. For example, Fairlie and Sundstrom (1999) show that the current racial unemployment ratio is substantially higher than it has been in past generations, and that this ratio increased during the 1980s. Today, the African American–white unemployment ratio is more than 2:1 but prior to 1940 there was unemployment equity. The recent rise in the unemployment ratio has occurred because the demand for labor has shifted away from industries, geographic areas, and skill levels where African Americans have been heavily concentrated, especially among younger and less well-educated workers (Bound and Holzer 1993; Fairlie and Sundstrom 1999: 264; Mason 2001). During the period since 1970, relative educational gains among African Americans has slowed the expansion of the racial unemployment ratio even as the “unexplained” component remains large “and works in the direction of widening the gap substantially after 1970” (Fairlie and Sundstrom 1999: 264). Stratton (1993) also reports that only 20–40 percent of the African American– white male unemployment differential can be explained by observed characteristics. We know also from audit studies that employment discrimination degrades the market opportunities of African Americans and Latinos relative to white workers. African Americans and Latinos have less chance of getting their job applications accepted, have lower probabilities of obtaining a job interview if their application is accepted, and have a lower probability of being offered a job if interviewed.1 Petterson (1998) demonstrates that the higher unemployment rate for young African Americans relative to young whites is not due to correspondingly higher reservation wages among African Americans. Replicating the influential study of Holzer (1998), Petterson also finds a racial difference in reservation wages. In his sample of young men, Petterson finds that African American reservation wages exceed those of whites by 2–13 percent. But he does not find a relationship between the reservation wages of young workers and subsequent spells of unemployment. Hence, there is no evidence that racial differences in reservation wages can explain the racial employment gap. All other things equal, Mason (1995) predicts that larger firms are more likely to engage in employment discrimination than smaller firms. Holzer (1998) reports that previous studies found that African Americans were indeed over-represented in smaller firms in the mid-1960s, but they are under-
Race and labor market outcomes in the USA 59 represented in smaller firms today. Holzer concludes that smaller firms are more likely to engage in racial employment discrimination than larger firms are. Holzer suggests that the positive relationship between relative African American employment and firm size occurs because all other things are not equal. Specifically, larger firms have greater exposure to government monitoring and corrective action, they are more likely to use formal rather than subjective hiring procedures and have greater exposure to public censure if they engage in discriminatory behavior. Black (1995) shows that in a monopsonistic labor market with both prejudiced and unprejudiced firms and workers who engage in sequential job search, African Americans will have higher job-search costs than whites since visits to prejudiced firms are without value to African American workers. Since a firm’s monopsony power increases with the cost of job search, groups with the highest job-search cost will be offered jobs with the lowest wage and worst non-wage job attributes. In Black’s model white workers earn an identical wage regardless of whether they work at a prejudiced or unprejudiced firm. However, prejudiced firms engage in employment discrimination against African American workers, while unprejudiced firms engage in wage discrimination against African American workers.2 As predicted by his job-search theory, Black found that white workers systematically receive higher wage offers than African Americans (Table 4.1). Workers with above-average skills are more likely to be offered jobs with above-average pay. Black also finds that African American workers are, ceteris paribus, less likely to be offered jobs with above-average pay. When education, occupational experience, and age are added to the model, the response coefficient for African Americans increases from –0.46 to –0.41 and it remains statistically significant at the 2 percent level. Table 4.1 Probability that a worker is offered an above-average wage Variables
Coefficient
Constant
–1.368 (14.18) 0.920 (9.52) 0.165 (0.60) –0.460 (2.73) –0.013 (0.16) –0.070 (0.50)
Worker has above-average skills Worker has below-average skills Worker is black Worker is female Worker is from a nonblack, nonwhite ethnic group Source: Black (1995: 319). Note t-statistics are given in parentheses.
60 Patrick L. Mason
Pre-market factors and racial wage inequality Loury (1977) has argued that an individual’s social capital, or family and community background, yields nontradable social relations and cultural attributes that influence economic well-being. For Loury, social capital is a vital element for inter-generational transmission of socio-economic status. But the nontradability of social capital implies that equal quantities of observed individual attributes will not yield identical rates of returns and, if social capital differs by race, racial inequality will be transmitted from one generation to the next in perpetuity. Samuel Bowles (1972) argued more than a generation ago that class is an important determinant of individual education and earnings. Similarly, Granovetter’s (1988) job network analysis demonstrates that individual economic attainment is related to the extent of one’s connections to individuals embedded in positions of power and authority in the marketplace. Persons from high socio-economic status backgrounds will have more accessible and more varied connections to the set of individuals embedded in positions of power and authority. In a race- and class-segregated society such as the USA the impact of embeddeness on individual economic outcomes will be larger among whites than among African Americans. Equations (4.6) and (4.7) summarize a narrow interpretation of Loury’s social capital hypothesis. This interpretation preserves a meritocratic ideology of the market even as it allows so-called “pre-market activity” to be decidedly non-meritocratic. Individual human capital accumulation (H) is a function of individual attributes (A), parental socio-economic status (F), racial or ethnic group socio-economic status (R), and the socio-economic status of one’s neighborhood (N). In turn, individual earnings (W), as well as other labor market outcomes, are functions of individual human capital: H = h(A, F, R, N), and
(4.6)
W = w(H).
(4.7)
Bowles’ model of inequality (equations (4.8) and (4.9)) suggests that human capital accumulation reflects class position (C). Additionally, class is a direct determinant of labor market outcomes: H = h(C), and
(4.8)
W = w(H, C).
(4.9)
The broad interpretation of Loury’s social capital hypothesis substitutes socioeconomic status for class but preserves Bowles’ analytical structure. Hence, we have: H = h(A, F, R, N), and
(4.10)
Race and labor market outcomes in the USA 61 W = w(H, A, F, R, N).
(4.11)
Equations (4.6) and (4.10) are identical, while (4.7) is a special case of (4.11). However, neoclassical empirical studies have not employed the broad interpretation of social capital as an interpretative strategy. Yet such studies are clearly conformable with both the broad and narrow interpretations of social capital. For example, Borjas (1992, 1995) has empirically examined the impact of parental socio-economic status and social capital on inter-generational mobility, where “social capital” consists of neighborhood and white ethnic group socioe-conomic status. Borjas (1992) demonstrates that both father’s socio-economic status and the average socio-economic status of an individual’s ethnic group have a sizeable impact on individual educational attainment, occupational attainment, and hourly wage rate. After controlling for individual attributes, Borjas (1992) finds that father’s education (parental capital) and ethnic group’s education (ethnic capital) have a convergence coefficient of 0.48 with offspring’s education in the General Social Survey (GSS) and 0.38 in the NLSY.3 However, parental capital alone has a convergence coefficient of 0.27 in both datasets. In the GSS, parental and ethnic capital have a convergence coefficient of 0.57 with occupational status, while the convergence coefficient is 0.60 with individual wage rates in the NLSY. For individual wage rates, parental capital alone has coefficients of 0.20 and 0.35, for the GSS and NLSY, respectively. Borjas (1992) did not include African Americans in his statistical analysis. Instead, he performed a simulation that assumed African Americans had an inter-generational mobility process similar to whites. The simulation suggests that including ethnic (or in this case racial) capital under-predicts educational attainment in the NLSY, though it is more accurate in the GSS dataset. Including racial capital may improve the prediction of African American occupational attainment, but the standard error is quite large. Including African American racial capital does not yield more accurate predictions of the African American hourly wage rate. African Americans may have lower levels of racial capital than whites, but Borjas’ (1992) results indicate that African American racial capital may have very little effect on African American inter-generational mobility. It would appear that African Americans face a more meritocratic marketplace than whites. Borjas (1995) shows that so-called “ethnic capital” is not simply a proxy for the socio-economic status of the neighborhood where an individual was raised. The mean status of an ethnic group is an excellent proxy for neighborhood socio-economic status; nevertheless, ethnic capital has an independent impact on inter-generational mobility “when children are exposed frequently to other persons who share the same ethnic background” (1995: 366). The rate of mean convergence increases with the extent of neighborhood segregation – that is, the impact of ethnic capital on inter-generational mobility increases as the extent of segregation increases. However, as the extent of segregation
62 Patrick L. Mason increases the impact of parental status on inter-generational mobility declines. As the neighborhood becomes more segregated, group influence increases relative to the impact of parental status on individual socio-economic status. Ethnic inequality among whites then will persist from generation to generation. In a completely meritocratic economy individual socio-economic status would be related solely to individual attributes and “natural ability.” In Borjas’ (1995) theoretical model, parental, neighborhood, and ethnic group socio-economic status increase individual human capital accumulation. So, although non-market processes may not be meritocratic, competitive markets remain meritocratic since each person is rewarded in proportion to his/her human capital. Yet, there is nothing in Borjas’ (1995) empirical analysis that rules out the “broad” interpretation of social capital. Hence, an equally valid interpretation is that Borjas’ research indicates that among whites parental, neighborhood, and ethnic socio-economic status will substantially retard the operation of any meritocratic tendencies within the US economy. Class effects constrain the meritocratic elements of the market competition. Regardless of whether one applies a broad or narrow interpretation of the social capital hypothesis, socially and economically segregated neighborhoods are an important institutional mechanism for the transmission of inequality across generations. Darity, Dietrich, and Guilkey (1997, 2001) provide innovative researches on the impact of race on inter-generational mobility. In 1880 the human capital characteristics of African American men reduced their occupational status by nearly 30 percent relative to the average male. On the other hand, differential treatment in the market – that is, the rate of return to African American human capital – lowered African American occupational status by 31 percent. By 1910 the reduction in occupational status due to deficient human capital was just 19 percent, despite the rise and consolidation of “Jim Crow” during the years 1880–1910 (Table 4.2). Yet the impact of market discrimination increased from 31 to 44 percent during this same period. Darity, Dietrich, and Guilkey explain that: Decreasing losses associated with deficient characteristics tracks well with the sharp rise in black male literacy, while increasing losses attributable to disadvantageous returns to characteristics track well with the hardening of Jim Crow practices in the US South. This may suggest evidence of a simple pattern of endogenous discrimination: as blacks became harder to exclude from preferential employment and status positions on grounds of qualifications, outright exclusion intensified. (1997: 304) Darity, Dietrich, and Guilkey (2001) assess whether group occupational status in 1880, 1900 and 1910 has an impact on individual occupational status in 1980 and 1990. At the turn of the century African American men attained lower occupational status because of market discrimination and lower human
Race and labor market outcomes in the USA 63 Table 4.2 Duncan Index of occupational status for African American men, 1880–1990
Characteristics Rate of return
1880
1900
1910
1980
1990
–0.297 –0.312
–0.224 –0.385
–0.185 –0.439
–0.148 –0.165
–0.110 –0.139
Source: Darity, Dietrich, and Guilkey (1997).
capital characteristics. The lower human capital characteristics among African American males was directly related to slavery and the rise and consolidation of “Jim Crow” in the South, where 90 percent of all African Americans resided at late as 1910. Darity, Dietrich, and Guilkey (1997) show that the effect of both market discrimination and human capital deficits continued to have a negative impact on the occupational status of African American males 100 years later. Of course, some white men had human capital characteristics similar to those of African Americans at the turn of the century, however they also received market premiums that they were able to pass on to their ethnic descendants some four generations later. Current generations of whites continue to benefit from past racism, while current generations of African Americans are harmed by it. In an inter-city comparison of socio-economic outcomes for individuals ages 20–4 and 25–30, Cutler and Glaeser (1997) find that residential racial segregation decreases earnings of African Americans and increases the probability of becoming a single parent. They find also that racial segregation lowers the probability that an African American will graduate from high school or obtain employment. Empirically, they find that a 13 percent reduction in residential segregation will eliminate one-third of the racial gap in these areas. Curiously, they find that segregation has no impact on the socio-economic status of whites. Taken at face value, the Cutler and Glaeser (1997) results are consistent with the labor-quality argument that racial inequality persists because of something fundamentally internal to the culture of African Americans that reproduces intergenerational inequality.4 However, we have seen already that Mason (1997) and Goldsmith, Veum, and Darity (1997) present evidence of a positive relationship between African American culture and individual wage rates and educational attainment. Further evidence is also provided by Mason (1999b) which examines the relative impact of family values (or behaviors) and family socio-economic status (or class). I find that regardless of race or sex, family behavior is substantially less important for determining socioeconomic status than family class background. As a rule, childhood family socio-economic status explains twice as much of the variation in socioeconomic outcomes among individuals of a particular race–sex group as childhood family values. Additionally, inter-racial differences in family values have very little impact
64 Patrick L. Mason on the residual difference in wages and hours of employment. Racial differences in class background, however, can explain up to 60 percent of the residual wage differential and up to 20 percent of the hours of employment differential. I am unable to determine whether the class effect on the residual wage and employment differences occurs because of the narrow or broad social capital hypothesis. Mason (1999b) also confirms an earlier finding: African Americans are able to translate a given amount of sources into a higher level of educational attainment than an otherwise identical white individual. Hence an alternative interpretation of the Cutler and Glaeser (1997) results is that inter-city variations in racial segregation are an indicator of inter-city differences in market and non-market discrimination against African Americans. In this light, a reduction in segregation increases the wellbeing of African Americans because it indicates a reduction in the extent of discrimination. Cutler and Glaeser (1997) do find that travel time to work is an avenue through which segregation works to reproduce racial inequality. Specifically, travel time to work lowers earnings and increases idleness among African Americans but has no impact on whites. Zax and Kain (1996) report a similar finding. They find that residential segregation increases the probability that an African American employee will be forced to quit when her/his employer moves from downtown Detroit to suburban Dearborn. Specifically, white employees who faced an increase in commuting distance were more likely to move and no more likely to quit than white employees whose commuting distance declined. An increase in commuting distance combined with residential segregation forced 11 percent of African Americans to quit their employment. Finally, given the importance of educational quality for the neoclassical argument that an increasing rate of return to cognitive ability has been the driving force for increasing racial inequality, it is instructive to see whether poor-quality schools have been an important transmission mechanism for racial inequality during the 1980s. Grogger (1996) finds that school quality is not an important factor in the recent inter-racial wage trend. Specifically, Grogger (1996) finds that controlling for the student/teacher ratio, length of the school term, teacher education, school size, and percentage of African American students enrolled in the school, both individually and collectively, does not reduce the African American wage penalty. Grogger (1996) also shows that the quality of schools attended by African Americans in the 1970s was not dramatically different from the quality of schools attended by whites (except for the African American fraction) and that the rates of return to school quality were of modest magnitude.5
Discussion Tight labor markets and government anti-discrimination and affirmative action policies, along with rapid improvement in the quality and quantity of
Race and labor market outcomes in the USA 65 African American education relative to white education, brought about a reduction of inter-racial inequality and racial discrimination in the labor market between 1945 and 1973. Although both the quality and quantity of African American education has continued to improve relative to whites (Bernstein 1995), especially during the 1970s and 1980s when inter-racial wage inequality begin to expand, macroeconomic and public policy changes have contributed to an environment that encourages racial discrimination in the labor market. According to Leonard (1991: 105), “affirmative action under the contract compliance program virtually ceased to exist in all but name after 1980s.” Leonard provides rather strong evidence that the federal government emasculated the Office of Federal Contract Compliance Program, the enforcement vehicle for affirmative action within the federal government. Leonard writes that by the mid-1980s affirmative action “no longer aided blacks.” Along with Anderson (1996) and Leonard (1996), Rodgers and Spriggs (1996a) find that federal enforcement activities declined substantially in the 1980s with the advent of the Reagan administration. Accordingly, they find that contractor status made a greater contribution to firms’ relative employment of non-white workers after the Reagan years than contractor status made during Reagan’s control of the federal antidiscrimination and affirmative action machinery. The stagflation of 1974–5 and stagnation of 1980–2 spurred greater competition for income among all workers, hence generating greater incentives for employer and employee discrimination. The bargaining power and standard of living of production and non-supervisory employees declined. Working-class white males pushed down the economic ladder by these macroeconomic disruptions and changes in the industrial structure dislodged African American workers from lower-wage positions (Mason, 1995, 1999a; Darity and Myers 1999). Moreover, the continuing decline of organized labor, especially in the private sector, has contributed to both intra- and inter-racial wage inequality (Mason 2001). Mason (2000) reports that African American– white wage inequality began to expand at least half a decade before the rate of return to skill began to increase. The racial wage differential began to grow after 1973, but the rate of return to cognitive ability did not begin to increase after 1979. So the rising skill premium cannot be a cause of the increasing racial wage inequality. The notion that competition will eliminate discrimination within the labor market is little more than conservative political ideology masquerading as science. In fact, both orthodox and heterodox economists have fashioned theories of persistent racial discrimination where material incentives and opportunities to engage in discrimination are directly attributable to the operation of the competitive process. In addition, several studies present strong empirical evidence of discrimination within the labor market. The most sophisticated studies that claim to show no discrimination within the labor market rely on a single test score variable (the AFQT) within one dataset. However, the AFQT over-estimates African American–white skill differences;
66 Patrick L. Mason its predictions have not been replicated by studies that employ different measures of cognitive skills, and it yields inconsistent and counter-intuitive results when decomposed into its component parts. So-called “pre-labor market” factors, which may also be summarized as the class and cultural background of individuals, do have an impact individual well-being and inter-generational mobility. Racial inequality from 100 years ago affects individual labor market outcomes today (Darity, Dietrich, and Guilkey 1997, 2001). Among whites, parental status and ethnic group status has a strong direct impact on inter-generational mobility (Borjas 1992, 1995). Children of high-income and high-education parents, neighborhoods, and white ethnic groups have a leg up on other children in attaining high income and an advanced education. However, we are unable to distinguish the manner in which class background matters. Is it because superior class position creates an advantage in skill acquisition or is it because superior social status increases access to persons embedded in positions of power and authority? The supply of and demand for labor are not strictly separable phenomena. To the extent that class background influences skill acquisition and provides access to decision makers and persons with control over resources, then class simultaneously affects both the demand for and supply of laboring activity. Hence empirical research that finds that a meaningful fraction of the racial wage gap can be explained by racial differences in class background does not lessen the substantive significance of race for labor market outcomes. What such research would suggest is that the class effect on labor demand is one avenue through which white preferential treatment in the labor market is obtained. This, however, is an area where we need greater study. Public policies and political action to eliminate racial discrimination within the labor market and within society at large must be distinct elements of an overall egalitarian political economy. Redistributing household wealth and public resources so as to reduce class inequality will “as a by-product” reduce some racial discrimination in the labor market and some racial inequality in society. However, a persistent and aggressive race-specific political agenda must also be utilized to eliminate the material incentives to discriminate that are embedded in the job-competition process. Finally, there is a curiosity concerning the theoretical and empirical research on race and economic processes. Regardless of the market under examination – for example, labor, entrepreneurial, housing, health, or other major economic market – or the methodological approach, economists have not sought to examine the formation of racial identity.6 All discrimination studies start with the assumptions that racial identity is given and that there is a uniformly agreed-to racial category for each individual, regardless of who does the racial sorting. Yet, I am unaware of any modern economist who utilizes a biological theory of racial identity. Without actually saying the words, economic research holds that race is a social construction. It is doubtful whether we can have such a large-scale social construction that does not have an economic explanation for its existence. Research on the economics of
Race and labor market outcomes in the USA 67 identity would take us a long way toward understanding the material basis of racial conflict in American and other societies.
Notes * The editorial and substantive comments of Sandy Darity and Ashwini Deshpande greatly improved the quality of this chapter. 1 See Darity and Mason (1998) for a more detailed summary of this literature. 2 The significant innovations of Black’s model should not be overlooked. Connecting employer prejudices to worker search costs shows how preferences matter. Emphasizing the connection between worker search costs and the monopsony power of firms demonstrates that exploitation (wage less than marginal product of labor) in general and discrimination in particular, is profitable to firms. 3 A convergence coefficient of 1.00 indicates that individuals obtain the precise social status of their father and ethnic group. 4 The R2 statistic in the major OLS regressions are unusually low. For example, the R2 statistics in the high-school graduate and college-graduate equations are 0.034 and 0.093, respectively, for 20–4-year-old individuals. For the ln(earnings) equation the R2 is 0.09, while it is 0.05 for the idle ( persons not working and not in school) equation. Finally, for the equation that predicts single mother status, the R2 is just 0.108. 5 Grogger (1996) does find that school quality has a positive effect on wages. In particular, he finds very strong school fixed effects. But controlling for these fixed effects increased rather than reduced the racial wage penalty. 6 Darity, Mason, and Stewart (1998) and Akerlof and Kranton (1998) are working papers that have sought to fill this void.
References Akerlof, G. A. and R. E. Kranton (1998) “Economics and Identity,” Working Paper, Brookings Institute. Anderson, B. (1996) “The Ebb and Flow of Enforcing Executive Order 11246,” American Economic Association, papers and proceedings, 86: 2, 298–301. Bernstein, J. (1995) “Where’s the Payoff? The Gap Between Black Academic Progress and Economic Gains,” Economic Policy Institute, Washington, DC. Black, D. A. (1995) “Discrimination in an Equilibrium Search Model,” Journal of Labor Economics, 13: 2, 309–34. Boozer, M. and C. Rouse (1995) “Intraschool Variations in Class Size: Patterns and Implications,” Working Paper, No. 5144, National Bureau of Economic Research, Cambridge, MA. Borjas, G. (1995) “Ethnicity, Neighborhoods, and Human-Capital Externalities,” American Economic Review, 85: 3, 365–90. Borjas, G. (1992) “Ethnic Capital and Intergenerational Mobility,” Quarterly Journal of Economics, 107: 1, 123–50. Bound, J. and H. Holzer (1993) “Industrial Shifts, Skill Levels, and the Labor Market for White and Black Males,” Review of Economics and Statistics, 75: 3, 387–96. Bowles, S. (1972) “Schooling and Inequality from Generation to Generation,” Journal of Political Economy, 80: 3, Part 2, S219–51. Bratsberg, B. and D. Terrell (1998) “Experience, Tenure, and Wage Growth of Young Black and White Men,” Journal of Human Resources, 33: 3, 658–77.
68 Patrick L. Mason Currie, J. and D. Thomas (1995) “Race, Children’s Cognitive Achievement and The Bell Curve,” NBER Working Paper, No. 5240. Cutler, D. M. and E. L. Glaeser (1997) “Are Ghettos Good or Bad?,” Quarterly Journal of Economics, 112: 3, 827–72. Darity, W. A., Jr, J. Dietrich and D. K. Guilkey (1997) “Racial and Ethnic Inequality in the United States: A Secular Perspective,” American Economic Association, Papers and Proceedings, 87: 2, 301–5. Darity, W., J. Dietrich and D. K. Guilkey (2001) “Persistent Advantage or Disadvantage? Evidence in Support of the Intergenerational Drag Hypothesis,” American Journal of Economics and Sociology, 60: 2, 435–70. Darity, W. A., Jr and P. L. Mason (1998) “Evidence on Discrimination in Employment: Codes of Color, Codes of Gender,” Journal of Economic Perspectives, 12: 2, 63–90. Darity, W. A., Jr, P. L. Mason and J. B. Stewart (1998) “Race, Class, and the Economics of Identity: A Theory of Racism,” Working Paper, Florida State University. Darity, W. A., Jr and Samuel L. Myers, Jr (1999) Persistent Inequality in the United States since 1945, Edward Elgar, Northampton, MA. Fairlie, R. W. and W. A. Sundstrom (1999) “The Emergence, Persistence, and Recent Widening of the Racial Unemployment Gap,” Industrial and Labor Relations Review, 52: 2, 252–70. Goldsmith, A., J. Veum and W. A. Darity, Jr (1997) “The Impact of Psychological and Human Capital on Wages,” Economic Inquiry, 35, 1–15. Granovetter, M. (1988) “The Sociological and Economic Approaches to Labor Market Analysis: A Social Structural View,” in G. Farkas and P. England (eds), Industries, Firms, and Jobs, Plenum Press, New York, 187–216. Grogger, J. (1996) “Does School Quality Explain the Recent Black/White Wage Trend?,” Journal of Labor Economics, 14: 2, 231–53. Heckman, J. (1998) “Detecting Discrimination,” Journal of Economic Perspectives, 12: 2, 101–16. Herrnstein, R. J. and C. Murray (1994) The Bell Curve: Intelligence and Class Structure in American Life, Free Press, New York. Holzer, H. (1998) “Why Do Small Establishments Hire Fewer Blacks Than Large Ones?,” Journal of Human Resources, 33: 4, 896–914. Leonard, J. S. (1991) “The Federal Anti-Bias Effort,” in E. Hoffman, Essays on the Economics of Discrimination, W. E. Upjohn Institute for Employment Research, Kalamazoo, MI. Leonard, J. S. (1996) “Wage Disparities and Affirmative Action in the 1980s,” American Economic Association Papers and Proceedings, 86: 2, 285–9. Loury, G. C. (1977) “A Dynamic Theory of Racial Income Differences,” in A. Lemond and P. Wallace (eds), Women, Minorities, and Employment Discrimination, Lexington Books, Lexington, MA, 153–86. Loury, G. C. (1998) “Discrimination in the Post-Civil Rights Era: Beyond Market Interactions,” Journal of Economic Perspectives, 12: 2, 117–26. Mason, P. L. (1995) “Race, Competition and Differential Wages,” Cambridge Journal of Economics, 19: 4, 545–68. Mason, P. L. (1997) “Race, Culture, and Skill: Interracial Wage Differences Among African Americans, Latinos, and Whites,” Review of Black Political Economy, 25: 3, 5–40.
Race and labor market outcomes in the USA 69 Mason, P. L. (1999a) “Male Interracial Wage Differentials: Competing Explanations,” Cambridge Journal of Economics, 23: 3, 261–99. Mason, P. L. (1999b) “Family Environment and Intergenerational Wellbeing: Some Preliminary Results,” in W. E. Spriggs (ed.), State of Black America 1999, Urban League, Washington, DC. Mason, P. L. (2000) “Persistent Discrimination – Racial Disparity in the US, 1967– 1988,” American Economic Association, Papers and Proceedings. Mason, P. L. (ed.) (2001) African Americans, Labor, and Society: Organizing for a New Agenda, Wayne State University Press, Detroit, MI. Mead, L. (1992) The New Politics of Poverty: The Nonworking Poor in America, Basic Books, New York. Murnane, R. J., J. B. Willet and F. Levy (1995) “The Growing Importance of Cognitive Skills in Wage Determination,” Review of Economics and Statistics, 77: 2, 251–66. Neal, D. and W. Johnson (1996) “The Role of Pre-Market Factors in Black–White Wage Differences,” Journal of Political Economy, 104, 869–95. Oettinger, G. S. (1996) “Statistical Discrimination and the Early Career Evolution of the Black–White Wage Gap,” Journal of Labor Economics 14: 1, 52–78. Petterson, S. M. (1998) “Black–White Differences in Reservation Wages and Joblessness,” Journal of Human Resources, 33: 3, 758–70. Rodgers, W. M., III and K. S. Armentrout (1996) “How Much Can Job Training Aid in Narrowing Racial/Ethnic Wage Gaps: New Evidence from the National Longitudinal Survey of Youth,” unpublished paper, The College of William and Mary, Williamsburg, VA. Rodgers, W. M., III and W. E. Spriggs (1996a) “The Effect of Federal Contractor Status on Racial Differences in Establishment-Level Employment Shares: 1979– 1992,” American Economic Association, Papers and Proceedings, 86: 2, 290–3. Rodgers, W. M., III and W. E. Spriggs (1996b) “What Does the AFQT Really Measure: Race, Wages and Schooling and the AFQT Score,” Review of Black Political Economy, 24: 4, 13–46. Stratton, L. (1993) “Racial Differences in Men’s Unemployment,” Industrial and Labor Relations Review, 46: 3, 451–63. Zax, J. S. and J. F. Kain (1996) “Moving to the Suburbs: Do Relocating Companies Leave Their Black Employees Behind?,” Journal of Labor Economics, 14: 3, 472– 504.
5
If not reconciliation, then what? Race and the “stolen generation” in Australia Samuel L. Myers, Jr.
Introduction This chapter summarizes lessons learned from studying racial reconciliation in Australia for several months in 1997 and shares some insights about what it could mean for future efforts in the USA to solve its race problems through an Australian form of racial reconciliation (Salmond 1991; Council for Aboriginal Reconciliation 1994f; Council for Aboriginal Reconciliation 1994h). This chapter thus synthesizes two very different threads of thought: one about optimism that racial reconciliation will be successful in Australia and the second about ambivalence on how the Australian reconciliation process might be transferred to the US situation. Emphasis will be on the Australian reconciliation effort. The first section presents the empirical context of the problem of racial inequality in Australia. The second section reviews the theoretical context within which one can understand the Australian reconciliation process.1 The concept of white privilege is described and the context that views a USA that has pretty much run out of new ideas and viable strategies for remedying racial and ethnic economic inequality is explained. The context is one in which racism is apparently on the rise, where racial hate is deepening (Berkowitz 1999; Clayton 1999; Hate Crimes June 4 2001), and where there is a decisive retrenchment or moving away from the conventional civil rights approaches to remedying racial economic inequality (Myers 1997a, 1997b). The third section discusses qualitative findings obtained from talking with an important group of Aboriginal and white intellectuals inside and outside Australian universities. There is no claim that this group is representative of Australian perspectives generally, nor even of Australian intellectuals and academics specifically, but the group does represent perhaps the bestinformed and most consciously supportive group of the educational aspirations of Aboriginal and Torres Strait Islander peoples. One gains a sense of at least one boundary of thought. If the most supportive constituency rejects particular processes or means for achieving racial equality, then those processes or means will be very difficult to implement. Analysis of the results
If not reconciliation, then what? 71 of a survey of views about racial reconciliation provides a tentative positioning of where Australia is, and where it might go. The fourth section imparts some very personal insights about what it was like to be an African American living and working in Australia. These thoughts are far more tentative and perhaps more unscientific than the survey or even the theoretical framework set up in the first two sections, but valuable nonetheless. Any understanding of the prospects of transferring an Australian style of racial reconciliation to American society requires that a researcher hold up a mirror to him/herself as the recorder and interpreter of events. The fifth section draws some conclusions.
Racial inequality in Australia On every conceivable measure of social and economic status, Australian Indigenous are worse off than the general population in Australia. On measures of health, Indigenous infants are 4–4.4 times more likely to die before their first birthdays than are non-indigenous babies (Aboriginal and Torres Strait Islander Social Justice Commissioners 1997a: 204).2 Indigenous babies are twice as likely to have low birth weights as are non-Indigenous babies (1997a: 208). Indigenous death rates from diabetes are 12 times higher than comparable death rates among non-Indigenous populations (1997a: 210). Problems of chronic conjunctivitis and blinding trachoma, hookworm infections, and Hepatitis A are endemic in areas where Aborigines live (1997a: 210–12). Aborigines are 16.5 times more likely to die in police, prison, or juvenile justice custody (1997a: 191–8). They are more likely to suffer from alcoholism, more likely to smoke, and more likely to die from cervical cancer (1997a: 211–16). The educational level of most Aborigines lags behind the general populations at every level. In 1996, 15.7 percent of Aborigines left school at 14 or younger compared to 13.9 percent non-Indigenous and 60.6 percent of Aborigines left school at age 16 or younger while only 53.5 percent nonIndigenous did (Aboriginal and Torres Strait Islander Social Justice Commissioner 1997a: 222). A 1996 survey of students attending the University of South Australia showed that 40 percent of Aborigines do not complete their degrees compared with 16.7 percent of non-Indigenous students (Bourke, Burden, and Moore 1996). Indigenous education programs were established by the Commonwealth in 1969, and since then they have been the responsibility of the Department of Education, Training and Youth Affairs (DETYA) (and its predecessors). Administration of the main assistance program, ABSTUDY, is outsourced by DETYA to Centrelink. Aboriginal and Torres Strait Islander (ATSI) enrolments in higher education were negligible in the late 1960s but by 1997 had risen to 7,460. Nevertheless, the participation rate is still less than that for other Australians, and Indigenous students’ success and retention rates are about 20 percent lower. Economic disparities are seen in the annual personal income of persons
72 Samuel L. Myers, Jr. aged 15 and over, with only 7.1 percent of Aborigines having an income over $25,000. Almost 23 percent of non-Indigenous have a personal income over $25,000 (Aboriginal and Torres Strait Islander Social Justice Commissioner 1997a: 224). The Aborigine unemployment rate in 1994, 38 percent, far exceeds the general Australian unemployment rate of 10.5 percent (Aboriginal and Torres Strait Islander Social Justice Commissioner 1997a: 225). The inescapable conclusion that the social and economic status of Aborigines and Torres Strait Islanders languishes behind that of persons in developing countries. Although they numbered approximately 1.4 million when Europeans settled in 1788, by 1971 there were only 115,953 persons who identified themselves as being Aborigines in the Australian Census. As Figure 5.1 shows, even though the number tripled in the two decades that followed, the Indigenous count remained small.3 With the exception of the Northern Territories, in no state was the Aborigine population in 1996 larger than 3 percent.4 The lower social and economic status of Aborigines is not only the result of current discrimination but is deeply rooted in the dispossession of spiritual and land rights after the European invasion and the unequal access to resources during the European occupation. As one elder from the Yarralin people of Northern Queensland tells the story: When him got to Darwin . . . Captain Cook come up, see that old fellow sit down makem spear there, hunting fish. And he don’t ask him. Same thing. Ask him one bit of a story: “By Christ, that’s good land here. Your country, it’s big one? Many people around here?,” he said. “Big big mob Aboriginal people. This we country. We never look whitefellow come through here. That’s first time you coming. We can be ready for you. Got a big mob spear. We don’t want whitefellow.” He start to hear that story. Captain Cook been hear that story. “Get ready for this, old fellow. We might start here.” Start to put the bullet in the magazine, start to shooting people, same like Sydney . . . Captain Cook, reckoned, “I been want to clean that people right up. That’s good country. I like to put my building there. I like to put my horses there. I like to put my cattle there . . .” I know Captain Cook been a little bit wrong for these people. “This no more blackfellow country. No more. Belong to me fellow country,” he said . . . Him been bring lotta book from Big England right here now. They got that book from Captain Cook from England. And that’s his law. Book belong to Captain Cook, they bring it Sydney Harbour. And lotta government got it in there from Big England.5 The elder’s story renders a poignant Indigenous interpretation of the theft of Aboriginal lands and the violence of invasion, which began when Europeans first settled Australia in the nineteenth century. The conditions that emanated from this dispossession persisted for generations to come. Former Commissioner of Aboriginal and Torres Strait Islander Social Justice Michael Dobson characterized the pre-1967 era this way:
If not reconciliation, then what? 73 Prior to 1967, Aboriginal and Torres Strait Islander peoples’ lives were regulated by the laws and policies of the states and territories. To control Aboriginal people, all states except Tasmania had established bureaucracies headed by Chief Protectors (in Queensland, the Northern Territory and South Australia), a Commissioner of Native Affairs (Western Australia) or the executive member of the boards for the Protection of Aborigines (New South Wales and Victoria). While the regimes varied from state to state, throughout Australia our lives were subject to extensive discriminatory control and limitation. For Indigenous people, life in Australia was akin to life in South Africa under the apartheid policy. (Aboriginal and Torres Strait Islander Social Justice Commissioner 1997a: 21) One significant and enduring legacy of an apartheid-type policy in Australia is persistent racial economic inequality between Indigenous and nonIndigenous people. Indigenous people of Australia are both less likely to be employed and more likely to be out of the labor force than are non-Indigenous people. Figures 5.2 and 5.3 show unemployment rates and non-labor force participation rates of Aborigines vs. non-Aborigines over the age of 14 from 1971 to 1991. Clearly unemployment is higher for Aborigine males and females than it is for non-Aborigines, as is nonlabor force participation. The disparity has worsened further, with Indigenous unemployment five to six times higher in 1991 than it was in 1971. While among males racial unemployment
400,000 352,970 350,000 300,000 265,371 250,000
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Figure 5.1 Aboriginal and Torres Strait Islander population in Australia, 1971–96.
74 Samuel L. Myers, Jr.
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Figure 5.2 Percentage of Australians unemployed, aged 15 and over, 1971–91.
gaps diminished over the years, this is primarily due to the rise in white joblessness. This reality is seen in Figure 5.4 and has important consequences for redress of racial inequality. We will argue in subsequent sections that widening inequality in the face of deteriorating economic fortunes of white males threatens innovative efforts to achieve racial reconciliation. The upshot of these measures is that Indigenous Australians lag behind non-Indigenous Australians. Some commentators have argued that as a result of targeted anti-poverty programs during the 1980s, the racial gap in incomes narrowed. The relative position of Indigenous Australians, this reasoning goes, compares favorably to the relative income position of Indigenous Americans. This conclusion, reached by two prominent Australian economists Gregory and Daly (1995) must be tempered by the fact that Indigenous American data were restricted largely to the Southwestern and Western states and provided a comparison for a period before the onset of “casino gambling” among tribes located in the key Midwestern and Eastern states. Nonetheless, Figure 5.5, derived from Gregory and Daly (1997), shows substantial income
If not reconciliation, then what? 75
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Figure 5.3 Percentage of Australians not in the labor force, aged 15 and over, 1971–91.
inequality between Indigenous and non-Indigenous groups in both Australia and the USA in 1980 and 1990. Any apparent improvement in the relative position of Indigenous Australians – the income ratio rose from 0.505 to 0.555 from 1980 to 1990 – should be cautiously interpreted. Many Aborigines live in highly urbanized areas of New South Wales and Queensland, but it is in the rural state of Northern Territories where Aborigines represent the largest share of the state’s population. Little evidence of improvement in that state has been shown in recent years. Comparing relative incomes in 1991 and 1996, Figure 5.6 shows that Northern Territory Aborigines received only 41 cents for every dollar that non-Aborigines received. That figure did not change between the two years.
Racial reconciliation in context Racial inequality can be understood through a theoretical construct called “white privilege” (Myers 1995, 1997a). The dominant Eurocentric view of racial inequality – even the liberal view – is what is called a “disadvantage model.” That view, particularly prevalent among American and Australian neoclassical economists (Piore 1968; Viscusi 1986; Hunter and Borland 1997),
76 Samuel L. Myers, Jr. 5.5
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Figure 5.4 Ratio of Aboriginal to total percentage unemployed, 1971–91. 0.6
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Figure 5.5 Indigenous to non-Indigenous income ratios, 1980 and 1990. Source: Gregory and Daly (1997).
posits that it is the human capital deficiencies and educational defects that underlie the poor market outcomes of blacks and other racial minority group members. These deficiencies and defects translate into lower earnings, lower incomes, higher unemployment and generally greater social and economic inequality (Myers and Sabol 1987; Daly 1992, 1993a, 1993b, 1993c, 1993d, 1994a, 1994b, 1994c; Daly et al. 1993; Altman and Taylor 1994; Australian Bureau of Statistics 1994; Daly and Hawke 1994; Daly and Lui 1995; Gregory
If not reconciliation, then what? 77 0.45 o.4
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Figure 5.6 Indigenous to non-Indigenous income ratios, Northern Territory, 1991 and 1996. Source: Taylor and Roach (1998).
and Daly 1995; Hunter 1996, 1997; Hunter and Taylor 1996; Junankar and Lui 1996; Taylor and Hunter 1996, 1997; Altman and Hunter 1997; Daly and Smith 1997; Hunter and Borland 1997; Sanders 1997; Sanders and Arthur 1997; Taylor 1997). Racial inequality, in the disadvantage model, seeks the source of the inequality within the least well-off group. The “white privilege” model, in contrast, seeks the source of inequality within the most well-off group. For there to be an underclass, there must be an “overclass,” a small homogeneous elite group of individuals who control society’s economic power. Understanding how the underclass got to be at the bottom requires understanding how the overclass got to be at the top. The “white privilege” model seeks an empowering notion of remedying racial inequality. It does not seek to make blacks or other racial minority group members white – as the “disadvantage” model does. Rather, it seeks to acknowledge and to confront the process by which inequality arose in the first place. Such acknowledgment of theft, of unfair and discriminatory treatment, of separation and forceful removal of children, and of the disproportionate numbers of deaths among those in custody does more than ease the sorrow and despair of those at the bottom (Council for Aboriginal Reconciliation 1994e; Commonwealth of Australia 1997). It squarely places the burden on the shoulders of those at the top, whose positions arose out of ill-earned advantage (Council for Aboriginal Reconciliation 1994a; Hunter 1997). Research on US racial inequality clearly demonstrates that the overclass has maintained its superiority in the marketplace, not because of the disadvantage of those at the bottom, but because those at the top consistently exhibit discriminatory behaviors. These behaviors adversely affect people who
78 Samuel L. Myers, Jr. are not like them generally, but provide advantages to people who are like them specifically (Myers and Darity 1998). Being white holds a peculiar advantage in the USA. Once one embraces the American ideal of freedom and equality, then it does not matter much whether one’s ancestors came from Ireland, Germany, France, Syria, or Northern India. What matters is that one is white. And for those surprised by the mention of India, be assured that, until recently, East Asian Indians – along with Northern Africans and peoples of the Middle East – were all regarded as white in America. One of the first surprises to an American researcher is the fact that the Australian Census form does not contain a check box for white. Throughout the twentieth century, Australians have diligently counted their members and, almost as an oversight, recorded in recent years those who identified themselves as Aboriginal or Torres Strait Islanders (Australian Bureau of Statistics, 1994). But no box exists for white. There is a box for ethnicity, which can range from Afghan to Zulu, but no box for white. And when white Australians are asked what is their race, many take great offense. They will insist that they are Celtic or Welsh or Irish or perhaps Mongol or Flemish or even a bit of Moor. But the word white appears not to be within their lexicon, that is, unless they are what we call in America “WASPS” or White Anglo-Saxon Protestants. For Australians, those are Anglican Englishmen. But, still, Australians do not have a box for white. The reason for the surprise is that if no white race exists in Australia – either because the Census says so or because the masses say so – then how can there be “white privilege?” White privilege is understood by authors such as University of Florida sociologist and race relations expert Joe Feagin (see Feagin and Sikes 1994; Feagin and Vera 1995; Feagin, Vera, and Imani 1996; Feagin 1998; St Jean and Feagin 1998; Feagin and Feagin 1999) to be the power and the economic influence that permits the European settlers to claim such legal myths as Terra Nullius6 or to create fictional chiefs or kings. It permits settlers to sign treaties with the chiefs or kings whereby a dark-skinned people gives up its rights (Council for Aboriginal Reconciliation 1994g), honored traditions and way of life (Council for Aboriginal Reconciliation 1994h) for a few blankets and trinkets. These may seem like tiny quibbles with the Australian Bureau of Statistics over failure to include a designation called “white.” But it can be a more fundamental reflection of the Australian refusal to acknowledge whiteness and therefore white privilege, which helps to explain the difficulty Parliament now faces in dealing with Wik (High Court decision defining native title rights).7 If there is no white race, there can be no white privilege. How conveniently Australians have submerged the central theoretical premise for redressing racial inequality! The journey toward understanding racial reconciliation as a remedy to racial inequality begins by acknowledging that racial inequality is rooted in white privilege. It is in part because white privilege persists in America that
If not reconciliation, then what? 79 efforts to eliminate racial economic inequality have failed in the past. Past policies were based on the “disadvantage” model. They sought to reduce deficiencies of blacks and other minorities without addressing racism and white privilege.8 Some Americans have embraced racial reconciliation. This was evident in President Clinton’s call for racial reconciliation in the USA at a time when affirmative action and race-based initiatives for redressing past wrongs against African Americans and other racial minority group members were and continue to be under attack. Racial reconciliation in the USA should be understood as a public policy response to the apparent failure of alternative means of remedying racial and ethnic economic inequality. The attack upon affirmative action comes in three parts. The first is related to the belief that affirmative action is no longer needed because the problem we were attempting to remedy – racial discrimination and the lingering vestiges of government-sanctioned slavery and segregation – is no longer is a significant problem (Aboriginal and Torres Strait Islander Social Justice Commissioner 1997b). Yes, much racial inequality remains, according to this view, but that inequality is not the result of on-going racism or racial discrimination. Instead, it is rooted in defects within racial minority communities themselves (Aboriginal and Torres Strait Islander Social Justice Commissioner 1997a; Commonwealth of Australia 1997; Chapter 3 in Aboriginal and Torres Strait Islander Social Justice Commissioner 1997a). Either these defects are manifestations of such prior policies as affirmative action or welfare that have unintentionally led to a perverse form of dependency upon the government or these defects are genetic, environmental, or even the lingering legacy of prior periods of social deprivation.9 Only the last of these effects can justly be remedied by government action and racebased initiatives do not assure a remedy. The second part of the attack presumes that even if discrimination lingers from the past and even if racism or racial discrimination continues, affirmative action does not solve the underlying problem. While efforts to promote racial minority group representation among students in major colleges and universities may be well-meaning, they do not assure graduation of minority group members from those institutions. Special funding for scholarships, summer programs and admissions of African Americans, American Indians, Alaskan natives and Hawaiian natives, Latinos, and often Asian Pacific Islanders may be justified by their continued under-representation in many parts of academia. It is more difficult to justify based on effectiveness in increasing their representation. Critics of affirmative action – even those who admit something needs to be remedied – point repeatedly to the dismal failure of prior affirmative action efforts to remedy racial inequality.10 The third argument against race-based initiatives to remedy racial and ethnic economic inequality is that these initiatives are unfair. The view is that in a constitutional democracy, where the majority rules, any effort that consciously benefits a minority group – based solely on their race – at the
80 Samuel L. Myers, Jr. expense of the majority is suspect. The legal and constitutional logic of this reasoning comes from post-Civil War Constitutional amendments prohibiting states from passing laws that would disenfranchise newly freed slaves. The language of the equal protection clause in the Fourteenth Amendment to the US Constitution does not speak specifically to the preferred status of one race over another. Within the historical context of the times, however, it was understood that laws could not be passed that harmed former slaves, while leaving whites unharmed.11 This three-pronged attack on affirmative action and the dismantlement of the civil rights apparatus of the 1960s represents an ideological mind set that can be seen either as a negative resurgence of racism – or what I call elsewhere “new racism” – or a positive manifestation of a new quest for remedying racism (Myers 1997a). The negative perspective has preoccupied most of my writing over the past several years, and I am often accused of unfairly labeling as “new racists” honest intellectuals who believe they are merely searching for another way. My visit to Australia has given me the freedom and the intellectual distance to see the alternative, more positive, interpretation of these movements in American society. The positive force accompanying the unfortunate ugliness of the retrenchment efforts away from affirmative action and race-based remedies to racial inequality is compelling policy makers to confront a need to acknowledge the deeply rooted pain and hurt associated with prior racism and to reconcile (Commonwealth of Australia 1997). Racial reconciliation in the USA can be seen as a positive response to the dismantling of an alternative and now largely unacceptable form of remedying racial economic inequality. Seen from the perspective of Australians who are struggling with their Aboriginal reconciliation efforts,12 from the perspective of the Maori who through the Waitangi Treaty13 efforts have nearly completed their reconciliation efforts and through the lenses of the South African Truth and Reconciliation efforts,14 one can only applaud the initiatives of the Clinton administration to seek healing. Whether such healing is feasible and represents a viable alternative to other remedies to racial and ethnic economic inequality is still unknown in the subsequent administration. Nevertheless, examining the inner workings of the racial reconciliation process and exploring what makes it a possible alternative remedy in the post-Civil Rights era is worthwhile.15
Australian academics’ views on reconciliation One advantage of economics and empirically oriented policy analysis is that the tools of the science permit a quantitative perspective on what can be misleading if presented only in an anecdotal way. A dedicated faculty member can teach a lecture with 100 students and have 99 of them say they’ve been challenged and have learned a lot. But that one student who writes on the evaluation form that the teacher is incompetent and the worst he has ever had causes the teacher not to be able to sleep for a week. Similarly, after personally
If not reconciliation, then what? 81 interviewing dozens of Australian intellectuals and academics about reconciliation, the views and perceptions that resonate months later are the outrageous views that ultimately influence and obtain the greatest media attention. Pessimism about the prospects of achieving true reconciliation in Australia and of being able to translate these efforts into successful racial reconciliation in America must be replaced by cautious optimism because of research findings such as those described below. Respondents on the margins really do not account for the true views and underlying feelings of the majority. Almost four dozen faculty and staff completed a survey instrument distributed at talks at Australian universities. The sample was almost evenly divided between those who indicated that they were Aboriginal or Torres Strait Islanders and those who were not. The survey followed seminars where the author discussed the problem of racial inequality in the USA and the retrenchment efforts away from affirmative action. Most seminar participants were members of the faculty of Aboriginal Studies or research units associated with Aboriginal affairs. At one location, faculty members were part of a universitywide diversity initiative. The survey had seven questions. The first question asked whether acknowledgment of prior wrongs was a necessary condition for reconciliation. Almost everyone agreed that it was. Of the 45 responses, 43 indicated that acknowledgment was “extremely important.” One said it was “somewhat important.” One said it was “not important at all.” Overall, 95.6 percent (43 out of 45) felt that acknowledgment was “extremely important” (see Figure 5.7). A second question asked whether an official apology was required for reconciliation. A few felt less strongly about this. Four said it was “somewhat important,” while two said it was “not important at all.” Overall, 86.7 percent (39 out of 45) felt that an official apology was “extremely important” (see Figure 5.8). 45 40 35
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Figure 5.7 Is acknowledgment of prior wrongs a necessary condition for reconciliation?
82 Samuel L. Myers, Jr. 45 40 35 30 25 20 15 10 5 0
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Figure 5.8 Is an official apology required for reconciliation?
The third question threw the researcher off balance. When asked whether compensation for prior wrongs was required for reconciliation, 57.8 percent (26 out of 45) said that compensation was “extremely important,” 31.1 percent (14 out of 45) said it was “somewhat important,” 4.4 percent (2 out of 45) said it was “not very important,” 4.4 percent (2 out of 45) said it was “not important at all” and another 2 percent (1 out of 45) did not respond (see Figure 5.9). The responses were examined by the racial breakdown of the sample. This was revealing because many white respondents refused to be pigeon-holed into a “white” classification. Some whites contested the very idea of being called 45 40 35 30 25
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10 5 0
Figure 5.9 Is compensation for prior wrongs required for reconciliation?
If not reconciliation, then what? 83 white, even though they admitted on the questionnaire that they were not Aboriginal, Torres Strait Islander, Asian, South Pacific Islander, nor other. Both respondents who claimed compensation was “not important at all” were white. They also wrote in the margins that not only was compensation not very important, it was dangerous and undesirable. In conversations with one prominent Australian economist who shares this view, the author learned that much white opposition to compensation for prior wrongs stems from a belief that it would set an undesirable precedent. This view holds that other deserving groups in society might make similar claims for compensation. Women, British children brought to Australia during World War II, Chinese laborers and any number of other claimants could clog the legal system with compensation demands. The argument against compensation makes this point and also occasionally makes the point that the wrongs did not occur as an act of war, so they do not fall under the commonly accepted international standards for redressing wrongs against subjects who have been harmed by state actions (Commonwealth of Australia 1997; also see n. 1). Leaving aside for a moment whether stealing Aboriginal children, raping their daughters, taking their lands and culture do, in fact, represent acts of war, one is struck by the vehemence of arguments against compensation. Economists, in particular, seemed far less interested in the remaining and largely economic questions dealing with determination of the size and distribution of the compensation and instead seemed to dwell on why compensation itself was undesirable. This is somewhat odd, given an economist’s training in calculations and debate, even if one disagrees with the underlying issue being debated. Economists ought to be able to talk seriously about who should receive how much compensation and how it should be distributed and financed, even if they are opposed to compensation on philosophical or political terms. Conversations never evolved to the interesting economic discussions because of the vehemence of opposition by a few to the very notion of compensation. This vehement opposition to compensation enthraled the author and the few hostile comments opposing compensation on the questionnaire enraged him. As a result, he was temporarily misled into believing that whites opposed compensation, while Indigenous people favored it. So the hypothesis that responses of the whites in the sample were different from responses of the Aborigines was tested. Much to his surprise he found sufficient variation in the responses, even among the Aborigines, to create a sizeable dispersion of results, making the conclusion that whites and nonwhites differed untenable. The same percentage of whites felt that compensation was very important as did Aborigines and Torres Strait Islanders. Although there were more Indigenous than white respondents who felt that compensation was “somewhat important” and more white respondents than Indigenous who felt that compensation was unimportant, the numbers were small. The result is that we cannot reject the hypothesis that whites’ and Indigenous people’s views are about the same: that compensation is “extremely” or “somewhat important.”
84 Samuel L. Myers, Jr. There are some substantial qualitative reasons why Indigenous Australians ranked compensation as “somewhat important” as opposed to “extremely important.” Many Indigenous respondents explained that it was nearly impossible to compensate for the pain and suffering and the loss of an identity. White respondents often focused on the administrative complexity of measuring compensation as a reason for being less enthusiastic about it. Still, it is important to realize that even an academic researcher can be misled into believing that whites and Aborigines are in basic disagreement over the entire spectrum of the distribution. This is not accurate. A safe majority of whites and nonwhites largely share the view that compensation is desirable and extremely important. This is good and optimistic news. Racial reconciliation rests on three prongs. One is acknowledgment of prior wrongs. Another is an official apology for those wrongs. A third is compensation for the wrongs. Much work remains within the economics community to address some of the technical aspects of the compensation question: How much? For how long? In what form of payment? To whom? These technical questions can be addressed while the politicians and journalists inflame us over the first two questions. Perhaps more careful thought to the technical questions would help extinguish the flames from a vocal minority and permit the majority to accept compensation as both necessary and desirable. Government authorization of $63 million dollars in 1997 to provide psychological counseling and to assist in locating lost relatives is not compensation for prior wrongs. It may help repair some of the damage associated with those wrongs, but it does not apparently go directly to the victims. Market economists would argue it would be better to give the money directly to the victims – who may well choose to spend the money on psychological counseling or, perhaps, locating relatives. The current scheme appears to benefit only the libraries, archives, location services, and psychological counselors – not the victims. It would be extremely surprising if real economic benefits trickle down to the stolen generation from this expenditure of funds. If anything, it creates a new industry that paradoxically may thrive on maintaining the pathology from the stolen children process and continued dependency of Aborigines on the goodwill of a government that refuses to apologize (Commonwealth of Australia 1997). If there is anything that can be concluded from the survey and from observations of Australians’ recent responses to the Wik, to the Stolen Children report (Commonwealth of Australia 1997), to the funding for the Aboriginal and Torres Strait Islanders Commission (ATSIC)(1997), and to the difficulties in proceeding with the Aboriginal Reconciliation initiative,16 it is that opponents are few but vocal. The opposition is baiting the Australian majority and the majority is confused, because it does not see itself as privileged. Without a theory of white privilege, the majority cannot easily reject the flaw in the logic of the opponents. They remain silent and appear to agree with the opponents, when in fact they do not.
If not reconciliation, then what? 85
Transplanting racial reconciliation to America Will it be possible to adapt this Australian model of racial reconciliation to heal the wounds of racism in the USA? The racial reconciliation efforts of the Clinton administration in the USA have not been embraced by the Bush administration and follow several years of uncertainty and ambiguity within the Democratic leadership on the direction of national policies on race. During his administration President Clinton ordered each cabinet department to prepare a report on what worked and what did not work in implementing affirmative action plans. This followed a speech in which Clinton intoned: “Mend it, don’t end it.” The “Mend it, don’t end it” policy statement was akin to his policy on gays in the military: “Don’t ask, don’t tell.” Its centrist tone was intended to convey to gays and their supporters that strict enforcement of archaic and punitive sanctions against homosexual acts within the armed forces would not be used to discriminate against people with different sexual preferences. Simultaneously it was to convey to the Religious Right that they need not fear sending their sons into long periods of separation from their families.17 Similarly, the “Mend it, don’t end it” policy was designed to convey to African Americans and affirmative action supporters that good programs would not be eliminated, while still signaling to the general population that the problem of putatively unfair quotas and practices discriminatory to whites would be fixed. Just as the “Don’t ask, don’t tell” policy ran into constitutional difficulties, in an administrative twist, the “Mend it, don’t end it” reports never got produced or were never publicly released for general distribution. It is almost as if the policy analysts in the various government bureaus, who were instructed to determine which affirmative action programs were working and which ones were not, mistakenly thought their instructions were: “Don’t ask, don’t tell!” The US racial reconciliation process under Clinton was a top-down initiative – the President’s initiative. After announcing he would create the initiative, the President failed to convene the groups for months. The group was a carefully picked mix of “respectable” whites, blacks, Asians, and Latinos. No American Indians or Alaskan or Hawaiian natives were to be found on the seven-member commission. Once the group convened, it was unable to articulate its agenda and until recently little visible output has emerged. One of the main fault lines of the US racial reconciliation process was the persistent opposition from the Republican leadership to the Commission’s composition. According to news reports, when outgoing Republican House Speaker Newt Gingrich was contacted about membership of the group, which ultimately included a prominent Republican (former Mississippi Governor William Winter), Gingrich’s office never responded. Gingrich and other leaders on the right, however, argued publicly that the President’s Race Reconciliation Council was too one-sided and that the hearings held around the country were themselves a mockery of the reconciliation process because
86 Samuel L. Myers, Jr. they failed to include diverse perspectives about the race problem in America.18 What is also intriguing about the race reconciliation dilemma in America is that the call for racial healing did not originally come from the left or center. It came, amazingly, from the right. As proof that they are not racists – even though they are opposed to affirmative action, to welfare, to minority scholarships and the like – the “new right” has called for acknowledgment and apology for slavery and the wrongs against blacks. Some even recommend compensation. Then, in this view, we will forever put the claims of blacks behind us. The American context is one where racial reconciliation is seen as a means toward ending black claims to special treatment. Cloaked in religious terms, racial healing and reconciliation serves a useful purpose in undermining demands for whites to share their privilege. In the starkest economic terms, paradoxically, the reconciliation – if accompanied by compensation – actually may assist black communities in becoming less dependent on white America and more self-reliant. That white America might just be willing to embrace this concession is due, in part, to the reality that blacks in America are so visible. It is impossible to be black in America and not be seen, heard, or felt. Although I am deaf, I can feel the change in the tone and conversation when I walk into a room full of whites. This presence of blackness in American society makes for a compeling argument when one challenges the notion that white privilege exists. Whites can be reminded, whether they like it or not, of the harsh impacts of the segregation, discrimination, slavery, and disenfranchisement of blacks for centuries. In Australia, particularly in urban areas and in places like Adelaide, whites seem not to even see blackness. Whether blackness is that of Indigenous people who are the original land owners or of foreigners or visitors like me, it appears to be invisible. A black American male can feel invisible in white Australia, although he is constantly reminded of his blackness in America. Security guards follow him closely when he enters a department store. He receives greater scrutiny than the white person in front of him when he writes a check or uses his credit card. In America, he feels his blackness. The researcher closely watched whites’ treatment of Aboriginal people in Australia and came to believe that Aborigines were invisible in the eyes of whites. In Darwin, for example, black people were very obviously on the fringe of the local marketplace and many, many Aborigine people were sleeping in the parks, sitting on benches, and generally roaming about. Life went on almost as if they did not exist. No Aborigines worked as clerks, secretaries or in the service positions in the many shops, restaurants, hotels, or art galleries. Their invisibility underscored both why they were not employed and illustrated how no one seemed to be upset about it (Council for Aboriginal Reconciliation 1994g; Daly, 1992). This invisibility works in concert with the problem of white privilege in Australia. Until whites begin to see Aborigines, to feel their pain, and to
If not reconciliation, then what? 87 realize the harm they have created, no prospect for reconciliation exists. The first steps towards reconciliation are acknowledgment and apology, so there is hope that through education and self-awareness whites in Australia also will realize their privilege and in so doing will appreciate a form of seeing that will make reconciliation meaningful and long-lasting. It is not clear that this can happen in the USA. The visibility of blacks has led whites to reject the very basis for reconciliation: acknowledging that they have done something wrong. “Slavery was a long time ago,” whites say, “Tell me what did I do wrong yesterday that caused you black people to be so poor, so criminal, so backward?” But in Australia, children were stolen yesterday, or at least within recent memory. In Australia, native title to land rights claims (Aboriginal and Torres Strait Islander Social Justice Commissioner 1997b) are not remote and farfetched. In Australia, whites who visit the moving exhibits at the museums or who read the report Bringing Them Home (Commonwealth of Australia 1997) will, like the researcher, shed tears and be haunted by nightmares. They will ask, “How could this happen in a civilized nation?” They will be remorseful, and they will recognize that the plight of Australian blacks is due not to the disadvantage that backward peoples share, but to the privilege that whites inherit. Because Aborigines are now largely invisible, the eye-openers of educational and informative efforts that play a part in the reconciliation process promise to reconfigure relationships between whites and Aborigines and to legitimize whatever compensation eventually emerges (Daly 1992; Council for Aboriginal Reconciliation 1994b, 1994c; Daly and Lui 1995; Junankar and Lui 1996; Taylor 1997).
Conclusion Prospects of successful reconciliation between Aboriginal people and white Australians are good. The process in place will force Australia to understand its whiteness. In so doing, there is hope for also addressing the problems of anti-immigrant and anti-Asian sentiments that abound. There is also hope for a more engaged and enlightened foreign policy role in the region. Australia will become whole, it will become united, and it will be healed.
Notes 1 For an overview of the Australian reconciliation process visit the Australian Reconciliation Convention website, http://www.austlii.edu.au/au/special/ rsjproject/rsjlibrary/car/arc/oview.htm; the Convention, The Path to Reconciliation: Renewal of the Nation, was held on May 26–8, 1997. 2 These figures are based on statistics from Western Australia, South Australia and the Northern Territory, the only states that were deemed by the Australian Bureau of Statistics to have death records of the quality needed for comparisons. 3 Much dispute about the causes of the dramatic increase in the counts exists (see Gray 1997). The most obvious explanation is the under-counting of Aborigines in earlier years of the census. The 33 percent increase in Indigenous population
88 Samuel L. Myers, Jr.
4
5 6
7
8
9 10
11 12 13 14 15
16
between 1991 and 1996, however, is related to what Gray calls “unexplained” population growth. One component of this unexplained growth is self-identification. Another component consists of births through intermarriage. See Aboriginal and Torres Strait Islander Social Justice Commissioner (1997: 188). In the Northern Territories, Aborigines account for 26.44 percent of the total population. Aborigines in the Northern Territories also account for 13.13 percent of the Australian population. The majority of Aborigines, however, live in the states of New South Wales and Queensland, representing 55.8 percent of all Indigenous Australians. Reproduced in Aboriginal and Torres Strait Islander Social Justice Commissioner (1997a: 1), citing Rose (1984). Australian doctrine, Terra Nullius (Latin) meaning a land belonging to no one, a land whose Indigenous people were taken to be so primitive in their social organization that it was, socially speaking, unoccupied (see Sharp 1996 and n.1 for more information). “The High Court decisions, Wik Peoples v. State of Queensland and Others; Thayorre People v. State of Queensland and Others 1996 find that pastoral leases do not give exclusive possession to pastoralists and that native title rights are not necessarily extinguished by the grant of a pastoral lease. Native title rights can therefore continue at the same time that land is subject to a pastoral lease. But where there is a conflict between the exercise of rights granted under a pastoral lease and the exercise of native title rights, the rights of the pastoralist will prevail” Michael Dodson, as quoted in Aboriginal and Torres Strait Islander Social Justice Commissioner (1997a: 73). See Joe Feagin in his essay in Myers (1997b). These opinions change when the option to exclude “strict quotas” is not offered. The reason political leaders were so reluctant to embrace affirmative action in the 1990s was that these dominant opinions of opposition to affirmative action overwhelmed the landscape. For government dependency views see Commonwealth of Australia (1997). Pollster Louis Harris points out that although support for affirmative action has declined and political leaders are vocally opposed to it, there still is – at least at the time of his article – a slight majority that favors affirmative action (Harris 1996: 49–52). The wording of the question, however, is “favor or oppose affirmative action – without strict quotas.” As Joe Feagin details in his essay in Myers (1997b), these opinions change when the option to exclude “strict quotas” is not offered. The reason political leaders are so reluctant to embrace affirmative action in the 1990s is that these dominant opinions of opposition to affirmative action overwhelm the landscape. Council for Aboriginal Reconciliation (1994d). City of Richmond v. J. A. Croson Co., 488 US 469 (1989). Podberesky v. Kirwan 38 F. 3d 147 (4th Cir. 1994). For more details see Boston (1993) and Rice (1991). In 1991, the Australian Parliament established the Council for Aboriginal Reconciliation, which was responsible for steering and promoting the achievement of racial reconciliation by the year 2001. The Sealord purchase in the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992 provided allocation procedures for Maori fisheries’ assets. The Truth and Reconciliation Commission (TRC) was established after South Africa’s transition to a nonracial democracy. Its primary purpose is to investigate acts of violence and discrimination committed during apartheid. For the Post-Civil Rights era see Joe Feagin in Myers (1997b). These opinions change when the option to exclude “strict quotas” is not offered. The reason political leaders are so reluctant to embrace affirmative action in the 1990s is that these dominant opinions of opposition to affirmative action overwhelm the landscape. See n. 1.
If not reconciliation, then what? 89 17 White House Office of Communication, “Clinton–Gore Administration: A Record of Progress for Gay and Lesbian Americans” (October 1998) White House, Office of Press Secretary, “Remarks by the President at National Defense University” (July 19, 1993). 18 Gingrich and Connerly (1997). Newt Gingrich was speaker of the US House of Representatives. Ward Connerly chaired the American Civil Rights Institute and is a University of California regent, a member of the governing body of the University of California system.
References Aboriginal and Torres Strait Islander Commission (ATSIC) (1997) Annual Report 1996–1997, Australian Government Publication Service (AGPS), Canberra. Aboriginal and Torres Strait Islander Social Justice Commissioner (1997a) The Fifth Report: 1997, Australian Government Publication Service (AGPS), Canberra, http://www.hreoc.gov.au/pdf/social_justice/sj_report97.pdf Aboriginal and Torres Strait Islander Social Justice Commissioner (1997b) Native Title Report: July 1996–June 1997, Australian Government Publication Service (AGPS), Canberra, http://www.hreoc.gov.au/social_justice/native_title/ Altman, J. C. and B. Hunter (1997) “Indigenous Poverty Since the Henderson Report,” CAEPR Discussion Paper, No. 127, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Altman, J. C. and J. Taylor (1994) “Estimating Indigenous Australian Employment in the Private Sector,” CAEPR Discussion Paper, No. 70, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Australian Bureau of Statistics (1994) 1991 Census of Population and Housing. Household Sample File User’s Guide, Australian Bureau of Statistics, www.hreoc. gov.au/social_justice/statistics/index.html, Canberra. Berkowitz, H. P. (1999, September 20) “Symposium (Analysis of Hate Crime Laws and their Social Effects),” Insight on the News 15: 35, 40. Boston, T. D. (1993) Meeting the Croson Standard: A Research Guide for Policy Makers, Joint Center for Political and Economic Studies, Washington, DC. Bourke, C., J. Burden and S. Moore (1996) “Factors Affecting Performance of Aboriginal and Torres Strait Islander Students at Australian Universities. A Case Study,” Department of Employment, Education, Training and Youth Affairs Evaluyations and Investigations Program, Higher Education Division. www.hreoc. gov.au/social_justice/statistics/index.html#8.6 Clayton, S. L. (1999) “Learning not to Hate,” Corrections Today 61: 5, 8. Commonwealth of Australia (1997) Bringing Them Home. “Report of the National Inquiry into the Separation of the Aboriginal and Torres Strait Islander Children from their Families,” Human Rights and Equal Opportunity Commission, Sterling Press Pty Ltd, Sydney. Council for Aboriginal Reconciliation (1994a) Addressing Disadvantage: A Greater Awareness of the Causes of Indigenous Australians’ Disadvantage, Key Issue Paper, No. 5, Australian Government Publishing Service (AGPS), Canberra. Council for Aboriginal Reconciliation (1994b) Agreeing on a Document: Will the Process of Reconciliation be Advanced by a Document or Documents of Reconciliation? Key Issue Paper, No. 7, Australian Government Publishing Service (AGPS), Canberra.
90 Samuel L. Myers, Jr. Council for Aboriginal Reconciliation (1994c) Controlling Destinies: Greater Opportunities for Indigenous Australians to Control their Destinies, Key Issue Paper, No. 8, Australian Government Publishing Service (AGPS), Canberra. Council for Aboriginal Reconciliation (1994d) Improving Relationships: Better Relationships between Indigenous Australians and the Wider Community, Key Issue Paper, No. 2, Australian Government Publishing Service (AGPS), Canberra. Council for Aboriginal Reconciliation (1994e) Responding to Custody Levels: A Greater Community Response to Addressing the Underlying Causes, Key Issue Paper, No. 6, Australian Government Publishing Service (AGPS), Canberra. Council for Aboriginal Reconciliation (1994f) Sharing History: A Sense for All Australians of a Shared Ownership of their History, Key Issue Paper, No. 4, Australian Government Publishing Service (AGPS), Canberra. Council for Aboriginal Reconciliation (1994g) Understanding Country: The Importance of Land and Sea in the Aboriginal and Torres Strait Islander Societies, Key Issue Paper, No. 1, Australian Government Publishing Service (AGPS), Canberra. Council for Aboriginal Reconciliation (1994h) Valuing Cultures: Recognising Indigenous Cultures as a Valued Part of Australian Heritage, Key Issue Paper, No. 3, Australian Government Publishing Service (AGPS), Canberra. Daly, A. E. (1992) “The Determinants of Aboriginal Employment Income,” CAEPR Discussion Paper, No. 32, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E. (1993a). “Education and Employment for Young Aborigines,” CAEPR Discussion Paper, No. 38, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E. (1993b) “Education and Employment for Young Indigenous Australians, 1986 to 1991" CAEPR Discussion Paper, No. 50, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E. (1993c) “Self-Employment Amongst Aboriginal People,” CAEPR Discussion Paper, No. 39, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E. (1993d) “The Position of Older Aboriginal People in the Labour Market,” CAEPR Discussion Paper, No. 43, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E. (1994a) “Self-Employed Indigenous Australians in the Labour Market,” CAEPR Discussion Paper, No. 67, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E. (1994b) “The Determinants for Unemployment Income for Indigenous Australians,” CAEPR Discussion Paper, No. 68, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E. (1994c) “The Economic Status of Older Indigenous Australians,” CAEPR Discussion Paper, No. 66, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E., B. Allen, L. Aufflick, E. Bosworth and M. Caruso (1993) “Determining the Labour Force Status of Aboriginal People Using a Multinomial Logit Model,” CAEPR Discussion Paper, No. 44, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E. and A. E. Hawke (1994) “The Impact of the Welfare State on the Economic Status of Indigenous Australian Women,” CAEPR Discussion Paper, No. 65, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra.
If not reconciliation, then what? 91 Daly, A. E. and J. Lui (1995) “Estimating the Private Rate of Return to Education for Indigenous Australians,” CAEPR Discussion Paper, No. 97, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Daly, A. E. and D. E. Smith (1997) “Indigenous Sole-Parent Families: Invisible and Disadvantaged,” CAEPR Discussion Paper, No. 134, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Feagin, J. R. (1998) The New Urban Paradigm, Rowman and Littlefield, Washington, DC. Feagin, J. R. and C. Feagin (1999) Racial and Ethnic Relations, 6th edition, PrenticeHall, Upper Saddle River, NJ. Feagin, J. R. and M. P. Sikes (1994) Living With Racism: The Black Middle Class Experience, Beacon Press, Boston. Feagin, J. R. and H. Vera (1995) White Racism: The Basics, Routledge, New York. Feagin, J. R., H. Vera and N. Imani (1996) The Agony of Education: Black Students in White Colleges and Universities, Routledge, New York. Gingrich, N. and W. Connerly (1997) “Face the Failure of Racial Preferences,” New York Times June 15. Gray, A. (1997) “The Explosion of Aboriginality: Components of Indigenous Population Growth 1991–1996,” CAEPR Discussion Paper, No. 142/1997, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Gregory, R. G., and A. E. Daly (1995) “Change in the Relative Economic Status of Indigenous Males in the 1980’s: Australia and the United States Compared,” CAEPR Discussion Paper, No. 82, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Gregory, R. G. and A. E. Daly (1997) “Welfare and Economic Progress of Indigenous Men of Australia and the U.S. 1980–1990,” Economic Record 73: 221, 101–19. Harris, L. (1996) “The Power of Opinion,” Emerge, March, 49–52. Hate Crimes (June 4, 2001) America 184: 19, 3. Hunter, B. (1996) “The Determinants of Indigenous Employment Outcomes: The Importance of Education and Training,” CAEPR Discussion Paper, No. 115, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Hunter, B. (1997) “The Potential Impact of the Workplace Relations and other Legislation Amendment Act 1996 on Indigenous Employees,” CAEPR Discussion Paper, No. 130, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Hunter, B. and J. Borland (1997) “The Interrelationships Between Arrest and Employment: More Evidence on the Social Determinants of Indigenous Employment,” CAEPR Discussion Paper, No. 136, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Hunter, B. and J. Taylor (1996) “Indigenous Labour Force Status to the Year 2000: Estimated Impacts of Recent Budget Cuts,” CAEPR Discussion Paper, No. 119, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Junankar, P. N. and J. Lui (1996) “Estimating the Social Rate of Return to Education for Indigenous Australians,” CAEPR Discussion Paper, No. 123, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Myers, S. L., Jr (1995) “Equity, Fairness, and Race Relations,” Emerge 6: 9, 48–52.
92 Samuel L. Myers, Jr. Myers, S. L., Jr (1997a) “Why Diversity is a Smoke Screen for Affirmative Action,” Change 29: 4, 24–32. Myers, S. L., Jr (1997b) Civil Rights and Race Relations in the Post Reagan–Bush Era, Praeger, Westport, CT. Myers, S. L., Jr and W. A. Darity, Jr (1998) Persistent Disparity: Race and Economic Inequality in the United States Since 1945, Edward Elgar, Northampton, MA. Myers, S. L., Jr and W. J. Sabol (1987) “Unemployment and Racial Differences in Imprisonment,” Review of Black Political Economy 16: 1–2, 189–210. Piore, M. J. (1968) “Public and Private Responsibilities in On the Job Training of Disadvantaged Workers,” Working Paper, MIT. Rice, M. F. (1991) “Government Set-Asides, Minority Business Enterprises, and the Supreme Court,” Public Administration Review, 51: 2, 114–22. Rose, D. B. (1984) “The Saga of Captain Cook: Morality in Aboriginal and European Law,” Australian Aboriginal Studies, 2. Salmond, A. (1991) Two Worlds: First Meeting between Maori and Europeans, 1942– 1772, University of Hawaii Press, Honolulu. Sanders, W. (1997) “Opportunities and Problems Astride the Welfare/Work Divide: The CDEP Scheme in Australian Social Policy,” CAEPR Discussion Paper, No. 141, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Sanders, W. and W. S. Arthur (1997) “A Torres Strait Islanders Commission? Possibilities and Issues,” CAEPR Discussion Paper, No. 132, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Sharp, N. (1996) No Ordinary Judgement: Mabo, The Murray Islanders’ Land Case, Aboriginal Studies Press, Canberra. St Jean, Y. and J. R. Feagin (1998) Double Burden: Black Women and Everyday Racism, M. E. Sharpe, New York. Taylor, J. (1997) “The Opportunity Cost of Future Indigenous Labour Force Status,” CAEPR Discussion Paper, No. 128, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Taylor, J. and B. Hunter (1997) “A Profile of the Indigenous Workers in the Private Sector,” CAEPR Discussion Paper, No. 137, Centre for Aboriginal Economic Policy Research, The Australian National University, Canberra. Taylor, J. and D. Roach (1998) “The Relative Economic Status of Indigenous People in the Northern Territory, 1991–96,” CAEPR Discussion Paper, No. 156, Center for Aboriginal Economic Policy Research, The Australian National University, Canberra. The Path to Reconciliation: Renewal of the Nation (1997) Australian Reconciliation Convention, May 26–8. Viscusi, W. K. (1986) “Market Incentives for Criminal Behavior,” in R. B. Freeman and H. Holzer (eds), The Black Youth Employment Crisis, National Bureau of Economic Research Project Report Series, University of Chicago, Chicago and London, 301–46.
6
Multiracialism and meritocracy Singapore’s approach to race and inequality R. Quinn Moore
Introduction Throughout much of the world, there has been a strong ideological attachment to the desirability of procedural equality. The logic runs that if the rules are not the same for everyone, the system is simply “not fair.” However in multiracial, multi-ethnic, or otherwise diverse societies, procedural equality often has come under fire when it has not yielded equality of results. “Fair meritocracy” is an ideological attempt to reconcile these two notions of equality. Proponents of fair meritocracy argue that unjust inequality is endemic to strict procedural equality, given the inherited advantages of privileged groups. Inherited wealth, educational advantages, nepotism, and benefits from discrimination against other groups create a “cruel meritocracy” that does not truly reflect the talent and hard work of all individuals. To counter this meritocratic distortion, fair meritocracy dictates that societies should strive for “fair” equal opportunity in which inherited advantages or disadvantages are compensated for. In other words, efforts should be made to level the playing field for all individuals before competition begins. The resulting meritocracy should yield what is deemed a “justly stratified society,” and simultaneously reflect both equality of results and procedural equality. Although this approach is ideologically appealing, there are significant obstacles to its practical application, namely the difficulty of removing the socially entrenched advantages of the privileged and the difficulty in assessing when stratification is truly merit-based, given that any privileged group is likely to claim that the wealth distribution is fair. Singapore represents a practical, if imperfect, attempt at applying “fair” meritocracy to a multiracial society. Throughout its independence and dramatic economic growth, Singapore has maintained a strict adherence to the ideal of a procedurally equal meritocracy, while simultaneously promoting multiracialism as a fundamental national ideal. The struggle to maintain these occasionally conflicting ideals has yielded an interesting mix of policies that seeks to sort individuals objectively while allowing racial groups to compensate for their perceived social and economic disadvantages. Singapore is somewhat unique in actively seeking to achieve a fair meritocracy. However,
94 R. Quinn Moore this system is hampered by the seemingly universal problem of ethnic favoritism and entrenched social advantage. While it would be difficult to claim that Singapore has achieved fair multiracial meritocracy, their efforts provide a valuable example.
The characteristics of Singapore’s racial groups Before discussing the specifics of Singapore’s racial policy, it is useful to outline the economic and social characteristics of each racial group and to discuss the ideological roots of Singapore’s philosophy toward race and meritocracy. Singapore was originally inhabited by a small group of Malays engaged in agricultural pursuits. The early nineteenth century decision by the British to convert Singapore into a port to rival Jakarta initiated a huge influx of workers from throughout the region and around the globe. This migration has yielded a diverse society, which has had a stable mix of 75 percent Chinese, 15 percent Malay, 7 percent Indian and a small population of other groups commonly referred to as Eurasians.1 This “Other” category is relatively small and has undergone dramatic shifts in make up due to in and out migration, so this discussion will focus on the Chinese, Malay, and Indian groups. The economic hierarchy in Singapore can be characterized in terms of race, with the Chinese on the top, the Malays on the bottom and the Indians straddling the middle. This hierarchy is reflected in income, education, housing and virtually every other social and economic category.2 Since attaining self-government in 1959, Singapore’s stated development philosophy has posited that economic growth would produce improvement for all segments of the population, and with such improvement, inter-racial disparity would eventually dissipate. However, the 1980 Census showed that the dramatic economic boom of the 1970s had not affected all racial groups equally. Malays were severely under-represented in both the upper levels of the educational system and in the high-prestige, economically dynamic occupations (see p. 101). As a result, Malay household income was only 74 percent of Chinese income (Table 6.1). Despite efforts to ameliorate inter-racial disparity, the household income gap between Malays and the Chinese actually worsened to 70 percent of Chinese income during the 1980s.3 However, it is perhaps encouraging that Malays were not excluded entirely from the 1980s growth as Malay income increased by 150 percent. In addition, Malays no longer dominate the lowestincome categories according to the 1990 Census, which shows that Malays actually have the lowest percentage of workers earning less than S$500 per month.4 Moreover, the Gini coefficient for Malay household income decreased fairly significantly from 0.399 in 1980 to 0.347 in 1990, which suggests that Malay economic development is spread across Malays as a group rather than within a Malay elite.5 The 1980s also saw a more significant gap develop between the Chinese and
Singapore’s approach to race and inequality 95 Table 6.1 Household monthly income in Singapore dollars and ratio to Chinese monthly income by race, 1980 and 1990 Household monthly income
Total Below 1,000 1,000–1,999 2,000–2,999 3,000–3,999 4,000–4,999 Above 5,000
Total
Chinese
Malay
Indian
Other
1980 1990
1980 1990
1980 1990
1980 1990
1980 1990
100.0 100.0 100.0 100.0 57.6 15.9 56.9 15.6 26.3 27.0 27.0 25.4 8.6 20.1 9.1 19.6 3.5 13.0 3.6 13.2 1.7 8.2 1.6 8.6 2.3 15.6 1.8 17.3
100.0 100.0 67.7 17.0 26.0 37.0 4.8 23.4 0.9 11.6 0.3 5.6 0.3 5.4
100.0 100.0 61.6 16.5 24.1 28.4 8.1 21.6 3.0 13.0 1.3 7.4 1.9 12.7
100.0 100.0 23.2 16.6 15.0 20.1 14.6 16.4 13.1 11.8 10.6 8.9 23.5 26.2
Average 1,228 3,076 1,213 3,213 896 2,246 1,133 2,859 3,225 3,885 Ratio to Chinese 1.01 0.96 1.00 1.00 0.74 0.70 0.93 0.89 2.66 1.26 Source: Department of Statistics (1992: 69).
Indian household income, as the Indian:Chinese ratio fell from 93 percent of Chinese to 89 percent (Table 6.1). This is even more disturbing since the Indian labor force participation rate, and hence the workers per household, was already the highest among all ethnic groups in 1980 and increased more than any other group during the intercensal period.6 This suggests that the actual gap between wages earned by Indian and Chinese workers is even greater than the household income data suggest.7 Thus, in a society that places great value on the cultivation of the elite, the Chinese are strengthening their position at the top of the social hierarchy and becoming increasingly dominant in the upper echelons of the economy.8 The persistence of this economic hierarchy has led to strong social stigmas and stereotypes associated with race. There is a pervasive belief that the Chinese are more intelligent, hardworking, and economically astute than other racial groups. Former Prime Minister Lee Kuan Yew, the indisputable Singaporean leader from independence until 1990 whose opinion still commands considerable respect, claimed that the Chinese are a “race [with an] intense and exacting civic culture . . . [which] is conducive to economic development and commercial ability” (Lee as quoted in Tamney 1996: 102).9 In contrast, Malays are considered to be generally lazy, unintelligent, and unambitious. One cabinet member explained that poor Malay economic performance was “the result of a feudalistic consciousness and from not having the spirit of hard work” (Tamney 1996: 98).10 Similarly, Lee explained that Hindus are the victims of a “relaxed culture that is incongruent with the values that make economic development possible” (Lee as quoted in Tamney 1996: 102). South Asians in general are considered to be overly individualistic and untrustworthy when compared with the Chinese.11
96 R. Quinn Moore
Ideological basis for Singapore’s multiracial meritocracy Because Singapore was originally made up of immigrants from diverse origins, the inhabitants had no conception of a Singaporean nation. Thus the government felt that its constituents would have no loyalty to a Singaporean state because “[there is no] deep connection with the territory or [among population groups] through a common, primordial ancestry, [or] pre-colonial past” (Ang and Stratton 1995: 74). When this lack of national identity was viewed in the context of differing economic and social statuses of racial and ethnic groups, rivalry among them, regional ethnic tension, and past incidents of communal violence, doubt among early leaders about Singapore’s viability as an independent political state was considerable. 12 The key to defusing Singapore’s ethnic tension was an emphasis on multiracialism and meritocracy. Each racial group was cast as an equally important, distinct part of a nation that would strive to ensure that success came on the basis of merit, rather than racial, ethnic, religious, or cultural favoritism. Emphasizing that groups should maintain their distinctiveness was crucial to the success of Singapore’s multiracial nationalism, particularly since there was no basis for claiming any intrinsic unity in the Singaporean population. The government decided that “rather than seeking harmony through the abolition of ethnicity . . . it [would] set about not only enhancing ethnicity as a primary social identification, but extend this principle to making ethnicity the main form of sociocultural classification” (Clammer 1985: 142). In short, Singapore would become a multiracial society with the intention of preventing racial discord. This multiracialism would then become the ideal around which a sense of nationhood could be cultivated. However, Singapore’s devotion to meritocracy as a path to economic development dictated that multiracialism would not include any affirmative action or compensatory discrimination measures, despite that fact that at the time of independence the Other/Eurasian category (then primarily British) was vastly wealthier than either the Chinese or Indians and the Malays were much poorer than all the groups. The ideal that each culture was an equally important part of the nation and that each individual would be rewarded solely on the basis of merit was presumably enough to unite Singapore’s disparate groups. Given inter-racial disparity, maintaining the balance between multiracial harmony and meritocracy has required some degree of compromise. In broad terms, this compromise can be characterized using the framework of “fair equal opportunity.” The government has recognized that difference in initial or inherited conditions may prevent certain worthy individuals from rising through a meritocracy established by the educational system and the labor market. In response, a set of policies has been instituted to mitigate disadvantages before entering the procedurally equal “playing field” of meritocratic equal opportunity. Singapore’s fair equal opportunity is manifested in three ways. First, the government allows each racial group to create a community-based self-help
Singapore’s approach to race and inequality 97 group to address its cultural, educational, and social deficiencies. Second, massive government-subsidized housing projects provide people of all income levels with relatively similar living conditions to ensure that the rich do not have large environmental advantages over the poor. Finally, after entry into the “playing field” has been equalized by self-help and housing policy, the procedural equality of the meritocracy is supposed to be guaranteed by the educational system in which success is determined “objectively” by standardized testing. The hierarchy established by this system is deemed fair as all enter the social game at similar levels and all determinations of ability are uniform and, therefore, considered unbiased.
Community-based self-help organizations Independent Singapore’s only explicit policy response to racial disparity has been the establishment of community-based self-help groups for each of the principal racial groups. These organizations are designed to help members of a racial group overcome potential social and economic hardships through the activities of the members of the racial group itself. Self-help groups receive funding from private donations, automatic payroll deductions, and government matching funds up to a threshold amount. The philosophy behind this system is that the members of a racial group will best know what problems their group is facing and how to solve these problems most efficiently. By decentralizing responsibility for the amelioration of disparity, it is also expected that the development of dependency tendencies, thought to be inherent in state-supported welfare systems, will be prevented.13 The formation of Mendaki After the scope of the inter-racial economic gap had been illustrated by the 1980 Census, the government concluded that policy action was necessary, as extreme inequality could jeopardize the multiracial harmony so fundamental to the national ideology. This should not be interpreted as an admission of a flaw in the economic system, however, since the most widely accepted explanation for this gap is the alleged Malay cultural inferiority discussed above. Because racial disparity is considered to be the result of cultural deficiencies, government officials feel no need to make structural or policy adjustments to alleviate this disparity. Instead efforts have focused on encouraging Malay leaders to induce fundamental changes in Malay culture. Pursuant to this approach, the government in 1981 allowed the Malay community to form Mendaki, the first government-sponsored self-help group.14 Although many social problems were to be addressed by this organization, it was felt that the best way to achieve development was through education and changing the habits of Malay children. Accordingly, Mendaki focused on tutorial programs, scholarships, and strengthening the Islamic cultural values that were considered conducive to promoting hard work and economic success.15
98 R. Quinn Moore The government provided Mendaki with assistance in several forms. First, Mendaki was allowed to use the Central Provident Fund (CPF), a governmentsponsored required-savings social security program, to collect S$1 donations monthly from the paychecks of all Muslims.16 The government then agreed to match these donations up to a certain threshold. Mendaki also was given access to government staff, training, and accommodation for its tutorial programs. Government assistance was structured carefully in an attempt to avoid the development of welfare-like dependency and to encourage Malays to help themselves. The amount of assistance and the form that the assistance took was to be determined entirely by the community itself. Mendaki was meant to improve Malay education but, more important, it was meant to instill a sense of self-reliance that would enable Malays to become more productive and successful members of society. Addressing persistent economic disparity without compensatory discrimination allowed the government to attempt to generate greater inter-racial equality without compromising its belief in meritocratic procedural equal opportunity. Self-help policy also shifted responsibility for resolving disparity from the government to the racial group, effectively shifting blame for intergroup disparity away from the economic and social system. By rejecting direct involvement, the government implicitly reinforced the notion that the current economic order is fair, and the meritocratic sorting process is functioning well and objectively. The underlying suggestion is that the only thing preventing equality of results is some set of deficiencies individuals possess when entering the system. Of course, this notion corresponds to fair equal opportunity, with one critical difference. In Singapore, nonmeritocratic/unjustified disparity is not considered to be the result of inherited advantages possessed by the well-off. Rather it is attributed to a set of inherent disadvantages possessed by the under-performing group, presumably resulting from culture or some other exogenous source. Moreover, the elimination of these deficiencies is not considered the responsibility of the government or society as a whole but of the under-performing group itself. Expansion of self help By the late 1980s, the Mendaki experiment was declared a success. The period since Mendaki’s formation coincided with dramatic improvements in relative Malay educational performance (see p. 101) and absolute economic outcomes. Although a direct causal relationship has not been established, Mendaki was given a great deal of credit for this change in fortune. As a result, Mendaki was encouraged to expand beyond its educational focus to include economic and social development at all levels of the Malay community.17 Mendaki thus recast itself as a sort of comprehensive race-specific welfare organization. Because of the seeming success of Mendaki and the philosophical opposition to differential treatment for the components of Singapore’s multiracial
Singapore’s approach to race and inequality 99 society, the government felt pressure to form self-help organizations for all racial groups. Although the Malays’ relative economic position had worsened during the 1980s, it was felt that the Malay improvements in the lowest-income brackets could be extended to other under-performing groups, such as dialect speaking Chinese. Accordingly, the Eurasian Association (EA) was activated in 1989, followed by the Singapore Indian Development Association (SINDA) in 1990 and the Chinese Development Assistance Council (CDAC) in 1992. All groups are funded much like Mendaki, through monthly CPF deductions from members of the racial group and by a limited government matching plan.18 Providing self-help assistance to all racial communities completed the shift to fair equal opportunity as the disadvantaged (yet meritorious) individuals of each group would, theoretically, be given the start needed to compete. The government believes that this decentralized, almost privatized, form of welfare is the most efficient way to deal with inter-group inequality, as it harnesses the racial communities desire to help itself while preserving procedural equality. Of course, this approach also represents a shift away from ameliorating inter-group disparity directly and toward using racial affiliation as the medium for addressing more general inequality. A decrease in general inequality presumably is assumed to have positive implications for inter-racial parity. However, the structure of self-help groups may prevent this from being the case. Although the three new self-help organizations have programs and philosophies similar to those of Mendaki, a difference in program quality already has begun to emerge. Although CDAC is the youngest self-help organization, it is quickly overtaking Mendaki as the most comprehensive development program. The combination of monthly automatic payments from a much greater percentage of the population and a much larger pool of rich potential donors has given CDAC a substantial resource advantage over the other selfhelp groups. This advantage is readily visible in the breadth and quality of programs CDAC already offers.19 Assuming that self-help is indeed an efficient and effective means of improving performance within Singapore’s racial groups, CDAC’s success may prove dangerous for the goal of inter-group economic parity. The tremendous resource advantages that CDAC enjoys could transform it into a much more powerful and effective organization than Mendaki, SINDA, or the EA. If this corresponds to greater improvements in the Chinese economic status relative to Malays, Indians, and Eurasians, it could mean even wider inter-racial economic gaps.
Housing policy Although housing policy was not explicitly designed as a social equalizing measure, it does have a powerful leveling effect, particularly when viewed within the context of a fair meritocracy. After being ousted from Malaya,
100 R. Quinn Moore Singaporean policy was driven by survival and fear of cultural, political, and economic nonviability. Because Housing and Development Board (HDB) policy was a means of solving the diverse problems of eliminating Singapore’s slums, improving its international image, decreasing the chance of racial or political unrest, creating a sense of national loyalty, and engineering a strong work ethic, HDB housing became a cornerstone of the ruling Political Action Party’s (PAP) plan for Singapore’s development: 87 percent of Singapore’s population lives in one of the monolithic high-rise HDB estates, while the remaining 13 percent live in exclusive, extremely expensive private dwellings. While HDB policy does involve some degree of wealth redistribution, the intent is not the benevolent creation of general equality; rather the goal is to create the conditions under which Singapore could survive and prosper.20 More specifically, HDB policy was a social investment that was designed to break up disruptive central-city slums, eliminate racial enclaves, generate a sense of national loyalty, and mold people into what the PAP considered to be the ideal workforce.21 This investment did have a cost, notably the potential for the feared welfarelike dependency tendencies that the PAP believed could result from public housing. Although the PAP did not intend HDB policy as a welfare measure, it recognized that it could have welfare-like side effects. Thus the government made a strong effort to structure HDB policy to avoid such outcomes. This effort included making apartments an asset to be purchased and not a right, differentiating quality (in terms of number of rooms) and cost, and encouraging mobility among quality levels.22 These measures were intended to make the public housing market similar to the free market while allowing the government to pursue the goals associated with public housing. Public housing has had an undeniable positive effect in eliminating substandard housing and achieving a degree of environmental equality across racial and social groups. HDB subsidy programs have been structured cleverly to assure that all Singaporeans have the opportunity to secure housing while those who do not need subsidies do not receive them. In addition to the subsidy provided on all apartments purchased directly from HDB, subsidized loans are available for both direct and open market HDB purchases.23 Low-income families have access to HDB rental subsidies, and subsidized 3-room apartments.24 All programs have household income ceilings, and most require that applicants apply with their family nucleus and not own any other private property.25 No person can receive more than two housing subsidies in their lifetime. These programs seem to be having their desired effect as HDBs have attracted an increasing percentage of the population (Table 6.2). Moreover, HDB subsidies have allowed home ownership to increase dramatically. Malays, in particular, seem to have benefited from these subsidies; 92.3 percent of Malay households own their homes today while fewer than 50 percent did in 1980. Malays do tend to have larger families and live in smaller apartments (Table 6.2), but the increase in home ownership is nonetheless indicative of the success of HDB policy.
Singapore’s approach to race and inequality 101 Table 6.2 Household type, household size, and household ownership by race, 1980 and 1990 Chinese
Malay
Indian
Other
1980
1990
1980
1990
1980
1990
1980 1990
69.5 20.7 33.3 11.5 2.8 1.2 11.3 19.1
83.2 8.0 33.7 27.3 13.5 0.7 12.3 4.5
72.0 30.6 32.7 7.6 0.6 0.5 2.6 25.4
96.6 7.1 49.7 30.4 9.3 0.1 1.6 1.8
56.1 21.4 21.8 10.2 1.2 1.5 13.2 30.7
83.7 12.6 31.5 25.0 13.6 1.0 10.6 5.7
43.2 8.5 18.0 10.3 5.2 1.2 46.4 10.4
57.7 4.8 19.1 18.3 14.7 0.8 34.3 8.0
Persons per household 4.8 Ownership rate 61.9
4.2 87.5
5.5 49.7
4.7 92.3
4.3 42.2
4.2 80.9
3.8 57.2
3.8 74.8
HDB Flat 1 and 2-room 3-room 4-room 5-room Other Private houses and flats Othera
Source: Department of Statistics (1994b: 21); Department of Statistics (1992: xiv, 63–7). Note a Includes shop houses, zinc roof houses and other types of housing.
In addition to providing the opportunity for secure housing, HDB estates are racially integrated. HDB policy requires that each building be no more than 87 percent Chinese, 25 percent Malay, or 13 percent Indian and Other.26 If a group exceeds this percentage, the building is deemed a racial enclave and housing unit sales to the over-represented group are restricted.27 This integration ensures that people of all racial groups and economic classes grow up in relatively similar environments in terms of housing quality, services provided, cultural opportunities, and, to a lesser extent, primary school quality.28 If one believes in the primacy of nurture over nature in human development, this environmental equality is perhaps the most important means of leveling the societal playing field. The leveling effect seems even more powerful when this system is compared to other countries (the USA, Brazil, India, etc.) where disadvantaged groups tend to live and remain in deteriorating, service-deficient, crime-ridden neighborhoods.
The educational system After the proverbial playing field has been leveled by ethnic self-help groups and the public housing program, the educational system ostensibly streams individuals to the appropriate socio-economic position by objectively assessing their level of merit. The educational system is the primary engine driving Singapore’s meritocratic sorting process. The other fundamental national ideal, multiracialism, is also deeply imbedded in the system, since schooling is the means of establishing multilingualism and insuring that the appropriate “cultural ballast” is imparted to all citizens. Although establishing a fair meritocracy and a harmonious multiracial society have been constant underlying goals of the educational system since independence, it is questionable whether
102 R. Quinn Moore these goals have been met. As a result of certain structural inequalities in the educational system and a general social bias toward the Chinese, Chinese students seem to enjoy an educational advantage that contributes to their disproportionate economic success. Streaming exams and pass rate differences The government has used the educational system to foster multiracialism through multilingualism and to instill a national ideology through a standardized state-approved curriculum. However, Lee also saw education as an avenue towards establishing an ideal economic culture where the talented and hard-working were to be identified, carefully developed, and given the incentive to achieve maximum production. A very strong emphasis was placed on cultivating an elite, since it was felt that these individuals would lead development. Consistent with this ideology, the educational system began a system of sorting in 1960. A streaming exam, the Primary School Leaving Exam (PSLE), was to be given at the end of six years of schooling, after which the top 20 percent were identified as the elite, and sent on to the academic stream where they could be molded into economic and political leaders.29 The remaining students were channeled into a much less prestigious vocational stream. As the educational system has evolved, additional streaming exams have been added. Currently, streaming takes place four times, once after three years of primary school, the PSLE after an additional 3–5 years of primary school, the O Level (and N Level for lower-stream students) after secondary school, and finally the A Level after the pre-university stage. These exams place students in a stream deemed appropriate to their intellectual level. Thus they ostensibly allow schools to cater to students’ specific needs and keep them in the educational system longer. In addition, they allow the government to focus disproportionate educational resources on the students identified as the nation’s elite at an earlier age.30 Elite-oriented funding continues at all levels of the system and is particularly concentrated on tertiary education, which is, for practical purposes, available only to those initially channeled to the high streams. Study of streaming exam pass rates illuminates many characteristics of the educational system and of Singaporean society. The most glaring feature is the pattern of stark differences in pass rates by race (Table 6.3).31 The O Level pass rates are particularly disturbing, since they show that 91.6 percent of Chinese students qualified to move on to pre-university or a polytechnic, while nearly 25 percent of Malay students did not even earn their secondary school certificate. The PSLE scores provide some hope, as they indicate some convergence in scores. However, such hope may be specious as the Malay student cohort that generated a rise in PSLE pass rates in 1991 generated a fall in the O Level pass rate in 1995. Moreover, these results show only overall qualification for
Singapore’s approach to race and inequality 103 Table 6.3 Streaming exam pass rates by race, 1987, 1990, and 1993 (percent) Race
Chinese Malay Indian Other
3 O Levelsa
PSLE
5 O Levelsb
1987
1991
1995
1987
1991
1995
1987
1990
1993
89.7 70.7 80.5 88.3
92.9 75.3 81.3 84.4
97.4 90.1 90.9 95.5
90.0 78.2 81.9 85.8
91.5 79.8 82.4 83.9
92.9 75.6 85.1 86.9
86.9 44.1 55.5 66.5
89.2 55.5 63.7 75.1
91.4 65.6 74.7 81.2
Source: Ministry of Education. Notes a By passing 3 O Levels, a student earns a Secondary School Certificate. b By passing 5 O Levels, a student qualifies for pre-University or a Polytechnic.
secondary school (with the PSLE) and pre-university (with the O Level). They do not show the stream students are tracked into within an educational level. This is significant because the educational system is specifically designed to provide a higher-quality education for high-performing students, which may explain why a rise in PSLE rates does not necessarily later translate into a rise in O Level pass rates. Sharply unequal inter-racial performance on streaming exams ultimately manifests itself in the tertiary level of the educational system, where Chinese students are grossly over-represented. In 1990, Chinese students constituted 90.4 percent of the university population while Malays and Indians made up 3.5 and 4.8 percent, respectively (Department of Statistics 1993b: xvi).32 Since university graduates earn 227 percent more than upper secondary graduates (Department of Statistics 1993a: 19), the over-representation of Chinese students in the university undoubtedly will continue to have negative effects on the future inter-racial distribution of income. Explanations In a fair multiracial meritocracy, the premise is that a social hierarchy is necessary and desirable. Fairness does not lead to egalitarianism but to what is believed to be a justly stratified society. Thus, the educational system’s focus on the cultivation of the elite must, for the moment, be taken as a necessary and correct policy. Since stratification is the goal of the educational system, the real question in assessing the success of sorting mechanisms from the Singaporean perspective is: “Does the system assess merit fairly and objectively, regardless of class and ethnicity?” If the answer is “no,” the implications go far beyond the educational system, casting doubt on whether the Singaporean economy is truly fair, multiracially oriented, or meritocratic. Evidence presented in the previous section showed that the Chinese significantly outperform Indians and Malays in streaming exams, resulting in Chinese over-representation in tertiary education. These differentials could
104 R. Quinn Moore be explained using Lee’s distasteful genetic arguments or, more logically, by the environmental/nurture argument that well-educated, more affluent parents are able to give educational advantages to their children. Of course, the latter argument would be inconsistent with the ideal of fair meritocracy, where individuals are judged and rewarded on their achieved merit rather than inherited advantage or disadvantage. The environmental argument is undoubtedly a part of the explanation for disproportionately high Chinese education performance given the system’s emphasis on early streaming. However, there are other structural characteristics of the educational system that favor the Chinese and the relatively rich, including the extra educational opportunities available to the affluent, the trend toward privatization of education, the Special Assistance Plan (SAP), and the unavoidable effects of racial stereotypes on economic performance. Advantages of the rich Perhaps the greatest bias in Singaporean education comes from the advantages available to the rich. Although these advantages are not unique to Singapore and, indeed, may be a universal social characteristic, they are worth mentioning since they affect the extent to which the system is truly fair and meritocratic. Since the Chinese on average are disproportionately more advantaged than Malays or Indians, and these advantages have implications for the racial distribution of opportunity. One of wealth’s tangible educational advantages in Singapore arises from the emphasis on private, extra-curricular tutorial services. Because the educational system has become so competitive and economic success is almost wholly determined by educational success, there has been an ever-increasing demand for extra instruction outside of school. Private tuition is so common that it is now almost expected. In securing high-quality tuition, the rich have an obvious advantage – money – that gives their children an advantage in school performance. However, this advantage has recently been partially countered by the emergence of tutorial programs sponsored by self-help groups. All of these tutorial programs have some provision that allows low-income families to send their children at no or low cost. Another serious educational advantage of wealth comes from insufficient university places and the increasing trend toward reducing educational subsidies. The first advantage is explained simply. There are more qualified students than positions at the national universities, particularly in high-paying fields.33 The high achieving students that are turned away are faced with three options—attend one of the considerably less prestigious Polytechnics, attend the Singapore Institute of Management (a new, small private university), or leave Singapore. The third option is quite popular as 34 percent of all university students are studying outside of Singapore, the vast majority of whom are Chinese.34 Since there is no public assistance for overseas or private study, these options are available only to the rich. Given the substantial
Singapore’s approach to race and inequality 105 financial reward for university education, an insufficient supply of university places is a serious problem and a serious disadvantage for those who cannot afford alternate university education. Even if more university places were created, it is possible that the effects would be nullified by another trend – reducing educational subsidies and bringing fees closer to the actual cost of education. As with housing, government subsidies to education were never intended as a form of welfare. Instead they were meant as a means of achieving national goals and increasing production to the point that subsidies were no longer necessary. Because of the high returns to university education, the government has decided that the time is right to reduce subsidies and increase university fees. The argument is that it is unfair for those who are going to be making the highest incomes to receive a subsidy financed by the general taxpayer. This sound argument has even greater validity in the context of a multiracial society where most of those tracked into the universities are affluent Chinese. The problem with this otherwise logical trend comes when poor students make it through the system and are faced with these new, higher fees. To mitigate this, the government has set up a Tuition Loan Fund that defers interest payment until after graduation, but these loans cover only 50 percent of fees at maximum. The rest of the fees and expenses usually come from personal funds, private loans, or loans from the family’s CPF account. These sources are likely to be negligible or non-existent to poor families. However, self-help group loans and bursary programs and other loan sources have recently emerged as an encouraging response to this problem. Advantages specific to Chinese students In addition to being disproportionately rich and thus receiving a disproportionate amount of the advantages of the educational system associated with affluence, the Chinese have two other unique advantages in the educational system, namely the Special Assistance Plan (SAP) and the stereotypes associated with being Chinese in Singapore. The SAP is the only exception made to equal treatment of the races in the educational system. Established in 1980, the SAP converted some secondary schools into very prestigious bilingual Mandarin and English schools that place a strong emphasis on instilling Chinese culture. The schools are extremely well funded and accept only the top 8 percent of Chinese performers on the PSLE. The existence of elite Chinese schools enhanced Malay and Indian fears of a culturally Chinese, rather than a multiracial, Singapore. As a part of the engine of meritocracy, SAP schools also call into question the inter-racial fairness of the educational system, particularly within the context of an explicitly elitist educational system. It is very difficult to justify different treatment of the academically elite Chinese from elite Indian or Malay students, particularly in a multiracial meritocracy. SAP schools are not even billed as “separate but equal,” as the SAP schools are unarguably better
106 R. Quinn Moore funded and more prestigious than regular schools. Moreover, similar Malay and Tamil schools were not created. The other advantage enjoyed by Chinese students is that of the positive Chinese stereotype in Singapore. As noted above, the Chinese are generally considered to be intelligent and hard-working, a fact that undoubtedly provides Chinese students with self-confidence and a bonus in educators’ assumptions about their capabilities. In contrast, Malay students must deal with stereotypes that they are lazy and unintelligent. Li (1989) provides examples of the salient effects stereotypes have on educational opportunities, such as scheduling high-level courses at the same time as mandatory Malay language courses, thus forcing Malay students to take lower-track courses regardless of their scores. Although it is difficult to assess the extent to which these stereotypes affect treatment of Malay students, their effects cannot be dismissed. Malay students have a different “starting line” in the eyes of educators, which impedes the process that determines order in the meritocracy.
Net effect of education as a fair sorting mechanism Now that the structure and characteristics of the educational system have been described, we can evaluate the question at hand: “Does the Singaporean multiracial meritocratic system sort individuals fairly and objectively solely on the basis of merit?” Given the various educational advantages of being wealthy, the bias of the SAP, and institutional racism, the answer seems to be “no.” But before condemning Singapore’s efforts at creating a fair multiracial meritocracy altogether, it is necessary to place the educational system in the context of Singapore’s other social policies and to compare this sum package with other systems in the world. When combined with self-help groups and housing policy, many of the obvious shortcomings of the educational system are mitigated, at least partially. Public housing, particularly since HDB complexes have been racially integrated, serves to counter many of the environmental advantages of the wealthy. Although the wealth and education level of the parents assuredly has an effect on their children’s performance, most children are raised in very similar physical environments as a part of a very diverse community. Children of poor, less-educated families are not isolated in deteriorating neighborhoods to the extent that they would be in the USA, Brazil, or virtually any other country in the world. Rather they live in well-integrated, wellmaintained, well-served communities. Self-help groups also counter the inequalities of the educational system by providing tutorial programs, extra-curricular academic and social activities, as well as education bursaries and loan programs. It is difficult to assess the effectiveness of these programs, but it is perhaps not coincidental that Malay students have been closing the sizeable PSLE score gap since the mid-1980s, shortly after the establishment of Mendaki. Both Malay and Indian PSLE pass scores began to converge with Chinese scores since the early 1990s, shortly
Singapore’s approach to race and inequality 107 after the expansion of self-help group policy. If this convergence continues in the PSLE and extends to the upper streaming exams as minority high scorers are tracked into higher streams, the educational system could have a very different face in the coming years, provided that CDAC’s funding does not give Chinese students an additional advantage. Of course, there are still serious flaws in the fairness of the educational system. Self-help groups and housing policy cannot compensate for all of the system’s inequities, nor are these policies without inequities of their own. Racism and the advantages of being rich have impeded and will continue to impede the truly fair functioning of Singapore’s meritocratic sorting process. But is there anywhere where wealth and race do not affect levels of success and opportunity? It seems unlikely. Singapore is no exception, but it has proved itself to be unusual, if not unique, in taking concrete policy action to try to level the playing field and objectively determine merit. When compared with the USA’s half-hearted attempt at affirmative action and grossly inequitable educational system, Malaysia’s failed attempt at generating equality of results through racial preference, and other unsuccessful or nonexistent attempts to redress racial inequality, Singapore’s flawed efforts at creating a fair multiracial meritocracy begin to look more impressive.
Notes 1 This diversity is multiplied greatly by extensive diversity within each group. The Chinese population is about 30 percent Hokkien, 17 percent Teochew, 15 percent Cantonese, 5 percent Hainanese and 5 percent Hakka (Clammer 1985: 91). The “Indian” category reflects all of the national, religious, and ethnic diversity of South Asia. Malays are not marked by religious or linguistic diversity. Despite the name, the small Eurasian group consists of the eclectic group of Portuguese, British, Arab, South-East Asians, and mixed-race individuals that used to be referred to as “Other.” 2 Note that race is not the only important category within which disparity exists. Within the Chinese and Indian groups there is strong division along linguistic and religious lines. An exploration of Singapore’s religious and linguistic hierarchy also would be useful; however, since the focus of government programs and popular sentiment is on race, so too is the focus of this chapter. 3 Reporting income by household hides some of the inter-racial income gap for Malays, as the mean household size for Malays was 4.7 in 1990 v. 4.2 for both Chinese and Indians (Department of Statistics 1993b: xv). 4 See Department of Statistics 1992: 69–78. Table 6.1 does not show the under $500 per month category because the 1980 Census did not report income by race and the 1990 Census reported only the 1980 figures given. 5 Indian and Chinese Ginis also dropped (from 0.490 to 0.423 and from 0.477 to 0.423, respectively) (Department of Statistics 1992: 10). 6 The Indian labor force participation rate was 70.4 percent in 1990, up from 67.6 percent in 1980. The Chinese rate increased from 62.6 percent to 65.1 percent while the Malay rate fell from 64.7 to 62.9 percent (Department of Statistics 1993b: xvi). The drop in Malay labor force participation makes their rise in household income even more impressive. 7 Income per worker is available in the 1990 Census, but it includes nonresident migrant workers which exaggerates the gap between Indian and Chinese wages.
108 R. Quinn Moore 8 This also is shown more clearly with the complete income data available in the 1990 Census reports, which provide categories up to $7,000 per month. These tables show that the proportion of Chinese households increases in each ascending income category (Department of Statistics 1992: 69–78). The 1980 Census did not report income by race and the 1990 Census reported only the 1980 figures given. 9 This is reinforced by the belief that the economic success of the Chinese is based on genetic superiority. This belief has manifested itself in several eugenics programs (Tamney 1996), led to the dysfunction of numerous ostensibly raceneutral policies and is undoubtedly a source of economic discrimination against Malays and Indians. 10 See Tremewan (1994: 95); Hill and Lian (1995: 84); Clammer (1985: 144); Li (1989: 108), etc. 11 See Vasil (1995: 119) and Tamney (1996: 102) among others. 12 Severe racial tension surrounded separation from the Federation of Malaya. In the resulting incidents of racial violence in 1950, 1964, and 1969, Singapore experienced what the government classifies as “race riots.” For more on these riots see Hill and Lian (1995). 13 For discussions related to this decentralization see Li (l989); Brown (1993); Lai (1995); Tamney (1996). 14 The precursors to community-based self-help organizations emerged in the late 1960s, soon after Singapore separated from the Federation of Malaya in 1965 (see Tan 1995: 343). 15 For a more complete discussion of Mendaki’s history and current projects see their web site (Mendaki 1999). Information in this discussion was also drawn from Li (1989); Lai (1995); Tan (1995); Vasil (1995). 16 These donations are technically voluntary since workers can have the deductions stopped. 17 Because of reorganization, Mendaki now has three divisions: Education, Social and Cultural Affairs, and Economic Development. One significant change is that responsibility for the free tertiary education program, a relic from the Federation of Malaya years, has been transferred to Mendaki. A one-time sum was given to Mendaki by the government, which was then used to set up the Tertiary Tuition Fee Subsidy. Instead of giving free education to all Malays, this subsidy pays 100 percent of fees for families whose monthly income is below $2,000 and 70 percent of fees for families whose monthly income is between $2,000 and $3,000 (Mendaki 1999). This transfer represented the next step in eliminating perceived Malay dependence and in fostering community responsibility. It also allowed the government to shed itself of a pre-independence political anachronism that had become increasingly expensive with growing Malay tertiary enrollment 18 For example, SINDA’s total budget in 1997 was S$5,529,511, of which 59.6 percent came from CPF deductions, 27.1 percent from government subvention, 11.0 percent from tutorial fees, and 2.3 percent came from other sources (SINDALink 1999). 19 The educational program, which is generally considered to be the most important function of self-help groups in terms of alleviating future disparity, serves as a good point of comparison. CDAC’s educational program revolves around its seven Student Service Centers (SSCs), all established between November 1993 and November 1996. These centers now serve 12,695 student and offer arts and craft classes, planned outings, homework clinics, and tutorial programs at all levels in all subjects. In addition to the SSCs, tutorials are available at public schools for those who are failing or nearly failing a subject or for those whose household monthly income is less than $2,000 (CDAC 1999). Neither Mendaki nor SINDA have SSCs. The tutorial programs offered by Mendaki and SINDA,
Singapore’s approach to race and inequality 109
20 21
22 23
24
25 26 27
28
which are comparable to CDAC’s school-based tutorial program, serve 9,500 and 2,800 students, respectively. It is both impressive and suggestive that in three years CDAC established the facilities to serve more students in its SSC program alone than even Mendaki, which has conducted tutorial programs since 1981. For further discussion of the political reasoning behind HDB policy, see Hill and Lian (1995). HDB policy offered a solution to the lack of inherent national loyalty by facilitating the purchase of a home. The government felt that “if one owns an asset in the country, one would stand to defend it” (Wong and Yeh 1985: 231). Moreover, the PAP felt that Singapore must develop a thoroughly disciplined workforce that would both attract foreign capital and encourage domestic capital formation. An efficient way to encourage this discipline was to encourage the population to place itself in debt to the government (Tremewan 1994: 58; Hill and Lian 1995: 121). This long-term financial commitment also ensured a strong incentive to seek and maintain full-time wage labor. After all, “the painless road to property ownership ties a family into debt and credit relations that require them to work steadily for years to come” (Salaff 1988: 243). In addition to creating a commitment to working, the PAP felt that giving people something concrete to work toward would give them focus, drive, and a greater capacity for hard work. A stable, high-quality living environment also was believed to have a positive effect on worker attitudes. Hill and Lian (1995: 135). This subsidy applies only to new flats as only new flats are purchased directly from HDB. It is difficult to assess the amount of this subsidy as HDB flats can not be sold on the open market until the owner has occupied the flat for at least 5 years. For a rough approximation, the market valuation for flats at the most recently built HDB estate in which owners can sell their property averaged S$293,400 for 4-room flats and S$413,800 for 5-room flats in the third quarter of 1998. The average HDB selling price for new flats ranged fromS$137,900 to S$158,500 for 4room flats and from S$233,500 to $270,300 for 5-room flats (HDB InfoWEB 1999). A much smaller subsidy is available for open market purchases. This subsidy is set at S$39,000 for families or S$49,000 for families using the subsidy to move near parents or children. In addition to these subsidies, loans are available up to 80 percent of the purchase price (HDB InfoWEB 1999). Three-room flats are being phased out by HDB, as no new HDB estates have 3room flats. The subsidized 3-room flat program involves HDB repurchasing 3room flats on the open market and then reselling them to low-income families at a subsidized rate. With the exception of low-income programs, the household income ceiling is set at the relatively high rate of S$8,000 per month. This ceiling applies to families purchasing flats on the open market as well. There is also a requirement that no neighborhood be more than 84 percent Chinese, 22 percent Malay or 10 percent Indian and Eurasian. See Lai (1995: 122). The restriction operates by allowing members of the overrepresented group to sell their housing unit to anyone, while members of the other groups can sell only to the non-over-represented groups. Thus the ethnic make up is not permitted to worsen. The policy structure can make it more difficult for minorities living in a Chinese enclave to find a buyer since they are restricted to selling only to non-Chinese. It should be noted that the policy of racial housing quotas also serves to break up the minority electorate and also could be seen as part of a government effort to prevent the development of a Malay-led opposition. See Tremewan (1994: 143) for further discussion of the government stance toward minority opposition. Location is one of several factors that play a role in determining which school a child attends. Test scores play perhaps the most important role.
110 R. Quinn Moore 29 See Tremewan (1994: 84). 30 See Tremewan (1994: 111). 31 PSLE rates can be broken down by subject. Although gaps have narrowed remarkably in English since 1990, Chinese students receive by far the highest scores in math and science, followed by Indians and then Malays. Since these subjects are the focus of the educational system and become increasingly more so as students progress, pass rate gaps may illuminate significant skill differentials belied by the convergence of ethnic qualification for secondary school. 32 It is also worth noting that Malays and Indians that do go to university in Singapore are over-represented in the much less prestigious Arts and Social Sciences faculty. See Department of Statistics (1994a: 15). 33 The information on funding of tertiary education comes from Shantakumar (1992). 34 Department of Statistics (1993a: 21). Chinese students make up 85.3 percent of the population studying in universities abroad.
References Ang, I. and J. Stratton (1995) “The Singapore Way of Multiculturalism: Western Concepts/Asian Cultures,” SOJOURN, 10: 1, 65–89. Asher, M. (1993) “Planning for the Future: The Welfare System in a New Phase of Development,” in Gary Rodan (ed.), Singapore Changes Guard: Social, Political and Economic Direction in the 1990’s, Longman Cheshire, New York. Barth, J. I. (1996) “A Context to Take for Granted? Literary Negotiations of Eurasian Identity,” Masters Thesis, Murdoch University. Brown, D. (1993) “The Corporatist Management of Ethnicity in Contemporary Singapore,” in Gary Rodan (ed.), Singapore Changes Guard: Social, Political and Economic Direction in the 1990’s, Longman Cheshire, New York. Chinese Development Assistance Council (1999)
Clammer, J. (1985) “Ethnicity and the Classification of Social Differences in Plural Societies: A Perspective from Singapore,” Journal of Asian and African Studies, 20: 3–4, 141–55. Department of Statistics (1981) Singapore Census of Population 1980, Department of Statistics, Singapore. Department of Statistics (1992) Census of Population 1990: Households and Housing: Statistical Release 2, SNP Publishers, Singapore. Department of Statistics (1993a) Census of Population 1990: Literacy, Languages Spoken and Education: Statistical Release 3, SNP Publishers, Singapore. Department of Statistics (1993b) Census of Population 1990: Economic Characteristics: Statistical Release 4, SNP Publishers, Singapore. Department of Statistics (1994a) Singapore Census of Population 1990: Transport and Geographic Distribution: Statistical Release 5, SNP Publishers, Singapore. Department of Statistics (1994b) Singapore Census of Population 1990: Religion, Childcare and Leisure Activities: Statistical Release 6, SNP Publishers, Singapore. HDB InfoWEB (1999)
Hill, M. and Lian Kwen Fee (1995) The Politics of Nation Building and Citizenship in Singapore, Routledge, London. Lai Ah Eng (1995) Meanings of Multiethnicity: A Case Study of Ethnicity and Ethnic Relations in Singapore, Oxford University Press, Kuala Lumpur.
Singapore’s approach to race and inequality 111 Li, Tania (1989) Malays in Singapore: Culture, Economy, and Ideology, Oxford University Press, Singapore. Lim, Linda Yuen-Ching (1989) “Social Welfare,” in K. S. Sandhu and P. Wheatley (eds), Management of Success: The Moulding of Modern Singapore, Institute of Southeast Asian Studies, Singapore. Mendaki (1999)
Salaff, J. W. (1988) State and Family in Singapore: Restructuring an Industrial Society, Institute of Southeast Asian Studies, Singapore. Tamney, J. B. (1996) The Struggle Over Singapore’s Soul: Western Modernization and Asian Culture, Walter de Gruyter, Berlin. Tan, J. (1995) “Joint Government–Malay Community Efforts to Improve Malay Educational Achievement in Singapore,” Comparative Education, 31: 3, 339–53. Tremewan, C. (1994) The Political Economy of Social Control in Singapore, St Martin’s Press, New York. Shantakumar, G. (1992) “Student Loans for Higher Education in Singapore: Some Observations,” Higher Education, 23, 405–24. SINDALink (1999)
Vasil, R. K. (1995) Asianising Singapore: The PAP’s Management of Ethnicity, Heinemann Asia, Singapore. Wong, A. K. and Yeh, S. H. K. (1985) Housing a Nation: 25 Years of Public Housing in Singapore, Maruzen Asia, Singapore.
7
Recasting economic inequality Ashwini Deshpande*
Introduction Insights into the economic features of the Indian caste system, in its changing manifestations from the ancient through the colonial to the contemporary, come primarily from the vast pool of research that has been undertaken by sociologists, historians, political scientists – almost all social scientists except economists. One would have expected economists to seize upon the unique economic features of the system as tools for theoretical modeling or as the subject matter for empirical work to examine the continuing relevance, or otherwise, of the occupational structure dictated by the caste system. Faced with analyzing persistent under-development in India, the primary focus of economic research on inequality and poverty has been on the overall trends. Inter-group disparity is just about coming to the fore in shaping the contours of research on inequality so as to gain deeper insights into the pattern of stratification. Inter-group disparity in India is multifaceted: religion, and region, not to mention gender and class, are all very important descriptors of inter-group disparity. I focus on caste because of the enduring relevance of caste categories in contemporary India, and the presence of caste-based affirmative action policies enshrined in the Constitution of independent India. Also, while caste is conventionally associated with Hinduism, all major religions in India exhibit features of caste divisions. In other papers (Deshpande 2000, 2001a, 2001b), I examine empirically the economic aspects of caste inequality in independent India. This companion study critically reviews the existing economic literature that provides a backdrop for the empirical investigation.
What contribution can economists make? Deshpande (2001a) outlines the imperatives behind an economic enquiry, arguing that the (non-economic) literature frequently makes economic assertions while defining the contemporary nature of caste inequality. The validity of these propositions is not always apparent on the basis of evidence presented. For instance, Mayer (1996) asserts that “All this has meant a general disengagement of occupation from its association with a particular
Recasting economic inequality 113 caste, and with any ranking which might stem from this” (1996: 49). While it is true that occupational structure has over time undergone a profound change, the caste divisions have remained more or less the same. Additionally, the post-independence Constitution guarantees each Indian the freedom of choice of occupations. Without fear of contradiction, one can uphold this statement for several castes; the erstwhile warrior castes will not necessarily choose the military as a career, and the military is no longer the preserve of certain castes. It is also true that any kind of skill acquisition (for example, admission to a management or a computer course, or to a dental school) is not contingent upon one’s caste. However, at a deeper level, to gain insight into the nature of change in the caste system an investigation into ancient occupations that have survived changes in economic structure ( i.e. priests in temples, scavengers, traditional moneylenders, and the whole spectrum of agricultural jobs) is required. Are these jobs still performed by castes to whom they were traditionally allocated, or is the reshuffling of the deck total – i.e. is the modern occupational structure randomly distributed across castes? It is likely that we may find more continuity than change. What happens to those who are released from traditional jobs because those occupations are vanishing? Is it true that lower castes tend to get absorbed into lower-paying and less prestigious modern occupations and higher castes get concentrated at the upper end of the modern spectrum? If this is happening, we would be witnessing the result of what can be termed “cumulation of advantage or privilege” over the years (or its reverse, disadvantage or denial of privilege). The following quote from Mencher (1974: 472) illustrates this dichotomy: “present day Chamars . . . though known as leather workers . . . only a small proportion of caste members do this work . . . their major function . . . to serve as a source of agricultural labor.” The link between caste and occupation can be broken, yet the overlap between caste and class can be very strong.1 Also, why does the link break – does the “pull” of economic opportunities or the “push” of economic deprivation compel caste members to seek other jobs? This issue is additionally complicated by the gender angle. In Deshpande (2001b) I discuss how the responsibility of preserving traditional occupations often falls on women while men seek alternative employment. In this case, the contemporary situation could be regarded as a permutation of an earlier caste structure where the link between caste and occupation may be strong for some castes, weak for others, but the association between caste and status – or, more correctly, between caste and privilege – persists. The cumulative advantage of the upper castes has been so strong that they no longer need an institutional structure of hereditary reservations in order to perpetuate their privilege. An economic investigation into the caste composition of the occupational structure can contribute to an objective picture of the nature and degree of change. Caste as an institution has several other facets that standard of living indicators will not be able to capture. Since urban settings may witness far
114 Ashwini Deshpande fewer overt instances of untouchability than more traditional rural settings, it can be argued that caste is irrelevant. However, in a society in which untouchability has been formally abolished for half a century, this should be the least of the outcomes expected. It is thus not an exaggeration to state that caste remains a powerful and potent force in Indian society, decisively shaping the contours of social and political development.
What is “caste inequality?” Before starting, it is necessary to clarify what I mean by “caste inequality”. Caste in English translates two distinct concepts – the Varna and the Jati. Briefly, the Varna system divided the ancient Hindu society into initially four (later five) distinct Varna (castes), that are mutually exclusive, hereditary, endogamous and occupation-specific: Brahmins (priests and teachers), Kshatriya (warriors and royalty), Vaisya (traders, merchants, moneylenders), Sudras (those engaged in menial, lowly jobs) and those doing the most despicable menial jobs, the Ati Sudra or the former “untouchables”. The operative category that determines the contemporary social code, however, is the Jati. There exist 2,000–3,000 Jatis, that are also called castes (and share the basic characteristics of the Varna), and it is tempting to think of Jatis as mere sub-sets of Varna. However, Jatis follow a much more complex system of hierarchy and rules of conduct towards each other. A one-to-one correspondence between Jati and Varna (note the uncertainty in the number of Jatis as opposed to the certainty in the number of Varnas) does not always exist and thus it is not unusual for a given Jati to claim a coveted Varna status nor for this claim to be disputed by other Jatis. Since caste divisions are not dichotomous, the meaning of caste inequality is not obvious analytically. Are we advocating pair-wise comparisons, technically possible for the Varnas, but quite mind-boggling for the Jatis? And, for the former, if people report the Jati as their caste, then we are left with the herculean task of unraveling the complexity of the web of relationships between individual Jatis and their Varna counterparts. Or, are we making a plea for forcing a hierarchical ordering of the Jatis based on an economic criterion alone – for example, on the basis of a definition of standard of living?2 I would like to suggest a third course: that we can characterize inequality by focusing on the sharpest contradiction, between those at the top and those at the bottom of the caste pyramid (using either the Jati or the Varna criterion). Data availability does not allow us to do that directly; however, there are three broad divisions for which data are available: the Scheduled Castes (SCs), Scheduled Tribes (STs) and Others (everyone else).3 Analytically, this three-way division of the data is appealing for the convenience of making pair-wise comparisons. Its weakness lies in underestimating the relative disadvantage of the SCs since the “Others” is a very large, heterogeneous category containing a whole range of castes, including castes that are socially and economically not necessarily very distinct from the
Recasting economic inequality 115 SCs. If empirical studies establish inter-caste disparity between SCs and Others it is reasonable to infer an even greater disparity between castes at the two polar ends.
The economic literature on caste inequality The literature on poverty and inequality in India is divided into two bodies of work. One stream addresses issues related to poverty and inequality, but is silent on the question of inter-group or inter-caste disparity.4 The other stream focuses on caste and therefore, perforce, addresses certain aspects of inequality, but offers few insights into the overall pattern of stratification.5 There is a third body of work that focuses on affirmative action, that would benefit from quantitative studies, but given that few all-India studies exist it relies on either case studies or state-level commission reports. Identity, discrimination, and economic outcomes The theoretical models that exist represent an eclectic mix, ranging from statistical discrimination to Leontief-style input–output modeling. I will make a brief attempt to link them together in the “new” conceptual framework of neoclassical economics. The field called the “economics of rural organization” that emerged as the new neoclassical paradigm in the 1960s highlighted the role of institutions when faced with transaction costs and imperfect information. The paper by Akerlof (1984) falls into this tradition. Meanwhile, Hoff et al. (1993), suggest that changes in the field of development economics since the 1960s can be summed up as broadly constituting three traditions – planning, the Institutionalist tradition, and the Chicago School. The “economics of rural organization” can be seen filling the gap between the latter two competing traditions, within the overall neoclassical tradition. Becker’s work on discrimination is a legendary representative of the Chicago school; however, the reason that it is not discussed in detail here is that it does not really focus on the Indian caste system. Akerlof (1984) provides, within a modified Arrow–Debreu framework, an explanation of segregated or caste economy which may be self -perpetuating. It falls in the class of models that focus on identity and economic outcomes, i.e. statistical discrimination through use of indicators. The paper discusses distortions to the Arrow–Debreu framework by the use of indicators which owe their existence to social convention. This is to be distinguished from the Chicago School that explains discrimination by a “taste for discrimination” (Becker 1971: 14). An individual X will discriminate against Y simply because he has a taste for it and he “must act as if he were willing to pay something, either directly or in the form of a reduced income, to be associated with some person instead of others,” emphasis in the original (1971: 14).6 In the Akerlofian statistical discrimination, all members of a given group
116 Ashwini Deshpande (race or caste) are perceived as having equal ability, so that in a caste economy “the behavior of one member of society toward another is predicted by their respective caste statuses” (Akerlof 1984: 24). The identity of the agent as perceived by other agents is seen as an indicator of merit and, in turn, determines outcomes (italics mine). In a system where there are social costs (for instance, sanctions in the form of being declared an outcaste) associated with breaking traditional norms and practices, Akerlof’s model demonstrates the tendency to thwart change to the social code of a segregated society.7 This model is closer to the ‘disadvantage model’ which is used to explain racial disparity – identity is seen as a set of characteristics attributed to an individual that either explains how others would behave towards the individual (Akerlof 1984), or how the individual would behave in society (Akerlof and Kranton 1998). These models do not address the fundamental question of how these assessments are formed. Are they based on averages that the group is presumed to possess? Assuming, temporarily, that the averages are “accurately” estimated, then this means that the outliers in the group, specifically those with attributes much higher than average, will suffer. However, beliefs about the group frequency distribution and the true group frequency distribution may differ widely. This difference would be driven by prejudice, but the imperfect theoretical apparatus does not allow an evaluation of the process by which indicators are formed, left as they are to “social convention”. Turning to these models and the Indian caste system, one finds a whole range of questions that are left unanswered. Why are the attitudes of the upper castes towards the Dalits derogatory? Are they due to the fact that the Dalits are genuinely “inferior”? If Dalits acquired superior human capital indicators over time, would these attitudes change accordingly? Why are the upper castes “superior” anyway? Is it due to their inherent characteristics, or to a social institution that was created by the privileged to maintain their status? If it is the latter, then the existence of discrimination would have very little to do with either presumed or actual characteristics of the Dalits. By focusing on a given individual (Akerlof and Kranton 1998), we overlook conflicting social prescriptions. Social prescriptions are defined by the authors as “what actions are . . . appropriate” and function as “powerful motivations to behavior” (1998: 1). Are social prescriptions an aggregate of individual prescriptions? Are there dominant prescriptions of privilege that determine what social codes or norms ought to be? This is the classic problem of interpersonal comparisons. Then comes the question of the identity A would like to possess, versus the identity that society bestows upon A – in the contemporary context of caste, excellently summarized by the juxtaposition of the terms “dalit” and “harijan” (the former a term of pride for untouchables, the latter, coined by Gandhi, considered patronizing). Further, if A chooses to be nonconformist, an issue that Akerlof and Kranton (1998) address, in adopting a deviant behavior in terms of the prevalent social code, he or she may be acting true to their self-
Recasting economic inequality 117 perceived identity. Here we are entering a grey area. Rebellion and protest take a myriad forms – almost all forms are “socially” unacceptable, although the degrees of unacceptability vary with the particular form. Continuity and change In the Akerlof (1984) model, while there is a theoretical possibility of an anticaste coalition succeeding in breaking free of the code, this possibility falls victim to the free-rider problem. Akerlof writes “usually the greatest rewards go to those who do not break social customs . . . the models of statistical discrimination and caste explain why economic rewards may follow those who follow prevailing social customs.” Lal (1988), in developing an economic rationale for the Hindu social system, uses essentially the Akerlofian argument (indeed, his model is a variant of the Akerlof model) to explain the relative stability in the caste system.8 One can see other more powerful disincentives to the formation of such a coalition: prejudice and the desire to perpetuate their domination and the power to prevent such a coalition on the part of the upper castes, coupled with fear of a backlash on the part of the lower castes. In this context, Kuran (1987) argues that the system continues because the most oppressed are in fact its supporters. This support could either be forced because of fear of reprisal, or genuine, due to a mistaken fatalism. This formulation ignores huge chapters of India’s history that is replete with social reform and religious protest against the caste system (see Deshpande 2001b for details, of the Bhakti movement that started in the eighth–ninth century AD). The Sikh revolt against Hinduism was initially anti-caste, but with the formation of castes within the new religion, Sikhism ended up with a situation no different from before. It is also argued that a strong caste consciousness prevents the formation of a class consciousness. In general, if construction of identity flows from a set of presumed characteristics, then can social change come if subjects of discrimination acquire the socially desirable characteristics (assuming, of course, the highly unlikely possibility that a well-formulated consensus exists on this)? Or would victims of discrimination have to resort to protest (perhaps violent)? Can either legal reform or external force (or both) be agents of change? We would like to know how the Akerlof (1984) equilibrium would change if the indicators for the Dalits improved over time. The Akerlof model assumes a market setting. But Scoville’s exercise (1996: 385–6) exercise looks at caste as a “system of human resource allocation as one alternative to reliance on market mechanisms,” arguing that this is a situation where “strongly non competitive labor market institutions have long prevailed, . . . occupations are hereditary, compulsory and endogamous.” Scoville (1991) sought to formalize the relationships in such a caste economy. While Akerlof’s work focuses on the existence of a caste-ridden equilibrium even under competitive conditions, Scoville’s (1991) paper is concerned with the “production and distribution workings of such a caste economy, much in
118 Ashwini Deshpande the fashion of Leontief, and with equilibrating adjustments taking place in the size of several castes” (1991: 49). Scoville (1991) constructs a “Jajmani matrix” capturing some of the reciprocal obligations of the caste system.9 The use of reciprocity has connotations of fairness or a fair exchange. The question of production of surplus and who (which castes) appropriates it is completely outside the purview of this model, as is the hierarchy and the exploitation inherent in the caste system. A basic assumption of Scoville’s (1991) model is that demand for most traditional goods and services is primarily driven by population. This ignores the role played by purchasing power as a determinant of the size of the market. It is difficult to claim that everyone in the Indian population has adequate clothing, yet an increasing number of textile mills are closing because of a lack of sufficient demand for basic types of cloth. The dynamic version of the model focuses on population growth of different castes as a driving force behind determining the elements of the matrix. While population growth is undoubtedly important, it is difficult to be persuaded that it provides the key dynamic behind the matrix – assuming of course, that such an exercise can adequately capture the essential features of the complex network of relationships structuring the caste system. Population growth in Scoville’s (1991) model is seen as a dynamic force determining demand for goods and services. This is not a discussion about SC/ST/Other differentials in birth and age specific death rates, or speed of demographic transition, etc., so there are no insights into the trend in inter-caste inequality. What is intriguing to observers is the degree of stability in caste relationships or the “absence of institutional change” (Scoville 1996: 390) where, in terms of his earlier model, institutional change is defined as the change in the definitions of the rows/columns or changes in the elements of the Jajmani matrix. Scoville identifies three characteristics of labor market barriers that ensure that institutional change in the caste labor market will be minimal or nil. However, his matrix is based on traditional occupations; in the modern occupational structure, heredity plays a much smaller direct role (in the sense of directing the exact profession that will be chosen by a given individual) and labor market barriers work differently. In general, unless a change is fundamental and complete, are we to conclude that there is no change at all? How does one assess change that takes place in degrees? Reservation of electorates for SCs and STs has led to the presence of low-caste legislators in decision making bodies that were historically the preserve of the upper castes. By law, untouchability has been abolished. Some have chosen to break the traditional association between caste and occupation. All these indicate some change. Yet, in numerous other spheres the change is not so rapid. Social networks reflect an underlying segregation; upper- and lower-caste inter-marriage is still rare; instances of untouchability are reported (and several others go unreported); ghastly crimes against Dalits continue on grounds of their caste alone. How does one characterize the whole picture? Scoville’s model does not allow us to answer this.10
Recasting economic inequality 119 Caste and patronage Platteau (1992) attempts to tread a completely different path by exploring caste relationships as a system of “aristocratic patronage”, where relations between upper and lower castes have elements of patronage.11 He realizes and admits that the Jajmani system cannot be equated with patron–client relationships but feels it contains such elements. An untouchable’s dependants may have hereditary relationships with several members of upper castes (several generations of a given untouchable family work for corresponding generations of one or more upper-caste families and receive remuneration), implying the presence of non-exclusive, non-dyadic clientilist relationships. Contrary to the inter-linked rural market models that assume competition, Platteau’s (1992) system assumes very stable relationships, blocking the development of competition and formalizing a stable heirarchical scheme based on servitude and coerced labor. The instrument of patronage in the models is the provision of land plots to the untouchable clients to ensure compliance and docility. While social insurance to the clients does exist in India, it could take a variety of forms other than provision of land. In view of the antagonism and tension in upper- and lower-caste relations there exists a very high degree of landlessness among the SCs that this model does not treat. Platteau’s paper models caste relationships as an informal system of indentured servitude. The Jajmani system is far more complex; in addition to land-based work, the Dalits under the traditional Jajmani system performed jobs that were completely divorced from land – such as working dead animals (removal and leather making), lifting human feces, cremating the dead, sweeping and so on. In terms of the spectrum of occupations that each of them focuses on, Platteau’s work is totally opposite to that of Scoville (who does not consider land-based production at all). Despite these serious limitations, Platteau’s paper does address the link between land ownership and caste status. This is an important facet of caste inequality. His models suggest that radical land reform would destroy the root of the untouchables’ dependence on their upper-caste landowning masters. The long unfinished agenda of land reform in India could provide a clue to one of the important causes of the perpetuation of caste inequality in the rural areas.12 This still leaves open the issue of low-caste status and consequent discrimination that stems from traditional menial jobs. In Platteau’s (1992) dynamic models, the Jajmani system does not turn out to be robust in the face of a number of changes. A weakening or even the end of Jajmani may not mean the end of casteism. To understand this, note the continuation of inequality and discrimination towards those seen as descendants of slaves in the USA where slavery has been abolished for over 130 years.13 These models confirm the traditional positive association between caste hierarchy and economic status. In contrast, in a somewhat bizarre exercise, Rao (1992) examines “compensating differentials” in moving to less
120 Ashwini Deshpande prestigious jobs. Following Dumont (1980), “prestige” is defined, in the context of the occupational structure of the caste system with castes ordered hierarchically, by considerations of ritual purity. The highest status is accorded to castes that are considered the most pure. The hypothesis, for which Rao (1992) says he finds support, is that if individuals valued prestige, they would be willing to take a cut in their income to have the traditional occupation of a caste higher ranked than their own (emphasis added). What Rao (1992) completely fails to address is the more common case of prestigious occupations simultaneously being the higher-paid of caste occupations. His paper focuses on a narrow segment of occupations held by higher-caste Indians. If his analysis were valid, then we should be able to conclude that an untouchable would give up his “high-paying” menial job for a “low-paying” high-caste job! The absurdity is obvious. The only context under which the argument of the paper appears plausible would be for a shift from a higher-paying upper-caste job such as that of a trader to an even more highcaste, say, a Brahminical occupation, that may be lower-paying. The actual scenario may be the reverse – in the tussle between “prestige” and monetary gain, the latter may win easily, especially if the “loss in prestige” is going to be very small. Indeed, Yadava and Chauhan (1997), in a study of Eastern Uttar Pradesh, find that among the upper and middle castes, the shift between 1978 and 1990 has been towards “business” occupations (occupations traditionally associated with Vaisyas, very much part of the high castes). Social mobility Are, as Rao (1992) suggests, more members of the upper castes moving into low-caste jobs? At the time of India’s independence in 1947 there was a belief that modern industrial development and urbanization would gradually loosen the web of caste stratification and eventually lead to its demise.14 Have the most deprived been able to move into the uppermost echelons of the economy? Nafziger (1975), in an investigation into caste origins of industrialists in certain regions of South India, rejects the Horatio Alger model and finds a low degree of both caste and class mobility. He finds overlap in feudal dominance and prestige with capitalist control of business, and hence a continuation of the privilege and social prestige of the high-income upper-caste families (fitting in with the trend of low class mobility historically and internationally). Mayoux (1993: 563, 556), in a case study of silk reeling in Karnataka – a small-scale industry, supported and promoted by the government targeting disadvantaged groups – finds limited evidence of upward mobility (though “not for the poorest of the poor”) and finds “structural disadvantages for those with little capital persisting in the industry”. Those at the bottom attributed their lack of success not only to fate but also to their inability to get credit. “[I]n some cases, reluctance to lend . . . based on prejudice . . . is certainly an element in the lower levels of lending to Scheduled Castes” (Mayoux 1993: 557).The significance of this finding cannot be overemphasized. Lanjouw and
Recasting economic inequality 121 Stern (1998: 37) discuss the poor access to credit for the lowest castes (Jatabs) in Palanpur and suggest that this may be the reason why “Jatabs sometimes lease out their land on cash rent, despite the unattractive terms of cash rent contracts”. Chandra (1997), examining the migration patterns of the Kanbis ( a low cultivator caste) from Gujarat to Kenya between 1911 and 1939, argues that caste-acquired wealth abroad and the adoption of Brahminical practices upon their return to India, meant that they could advance in the caste hierarchy to the middle range with the new name “Patidar”. This could be a case illustrating the validity of the specific process of “Sanskritization” or a more general one of wealth leading to a higher-caste status.15 It challenges the notion of the Indian society as rigid and inflexible. Jayaraman and Lanjouw (1998: 38) report that “several village studies find that the turbulence surrounding caste relations at the middle and upper levels of the social distribution is less marked among the lowest castes”. They also raise the larger question of whether “Sanskritization should be seen as contributing to the breakdown of the caste based patterns of behavior, or rather the opposite” (Jayaraman and Lanjouw 1998: 46). Is discrimination an obstacle to mobility? If successful self-employment is seen as a tall order, what about recruitment as wage labor, where presumably the classic capitalist incentives of profit maximization would over-ride all other non-economic considerations, such as the caste identity of the worker? Bhattacharjee (1985) tries to assess caste discrimination, over and above “institutional factors” such as unequal access to education and industrial training, and finds evidence of discrimination in the form of unequal pay for equal work in the modern urban labor market. It could be argued that human capital characteristics (such as education) could explain earning differences and that discrimination against SCs begins earlier – in unequal access to education. This is the so-called “pre-market” discrimination, which even the most ardent supporters of the market will acknowledge. Dhesi and Singh (1988), in a sample study of Delhi, find evidence pointing to differential access to education among different religion/ caste categories, as well as evidence of wage discrimination. The high incidence of illiteracy among SCs explains a significant portion of their lower earnings.16 Banerjee and Knight (1985) examine the crucial issue of whether labor market discrimination takes the form of wage discrimination or job discrimination.17 They find evidence of differences in the earning functions for SCs and non-SCs that can not be explained by characteristics and this they take as a measure of wage discrimination. Their data also suggest that caste discrimination may be a formal sector phenomenon because of the fact that formal sector jobs are prized jobs and hence resistance to hiring scheduled castes is greater. They find that “it is in the allocation of workers to jobs that
122 Ashwini Deshpande discrimination is most likely to be practiced. An employer would have no aversion to employing an untouchable provided that he worked in an untouchable’s job” (Banerjee and Knight 1985: 301). Lakshmanasamy and Madheswaran (1995) examine data on technical and scientific manpower in the four southern states of India. The paper looks at evidence of discrimination in a sample of 67,927 workers. What they fail to point out is the fact that the SCs were only 5.3 percent of the sample – much below their proportion in the population – which indicates discriminatory exclusion. They find a statistically significant difference in earnings between the SCs and the others. They also suggest that the level of earnings of the SCs may be due to the reservation policy, implying that without the reservation policy the earnings disadvantage would be even greater. An odd note in the paper comes in the authors’ uncritical acceptance of statistical discrimination: “ it is possible that profit maximizing employers use caste as a screening device for differences in productivity in the absence of perfect information” (Lakshmanasamy and Madheswaran 1995: 75). Here all the questions that we raised about the Akerlof model become relevant. What needs to be asked is why this imperfection of information becomes critical only vis-à-vis an SC employee. What if, owing to the same imperfect information, an upper-caste employee turns out to be less productive than expected? What insurance do the employees seek to acquire against this risk? Discrimination can take other forms, too. Banerjee and Bucci (1994), in an analysis of on-the-job search after entering urban employment, find that SC migrants displayed a greater propensity than non-SC migrants for on-the-job search in the formal sector but not in the formal sector. This seems surprising in view of the fact that the government policy of reserving jobs for the SCs applies in the public sector establishments of the formal sector. But they interpret this as evidence of discrimination, based on the results of an earnings function analysis (in another paper) of the same sample that found that in the formal sector, earnings were lower for the SCs. They point out that “the continuation of the search efforts shows that the SCs did not necessarily have lower expectations and were not prepared meekly to accept their economic lot” (Banerjee and Bucci 1994: 42). Jayaraj and Subramanian (1994) propose a number of real-valued indices of discrimination and link them with measures of inequality. They also provide estimates for caste-based disparity in the distribution of consumption expenditures in rural India, based on NSS data, “perhaps constitut[ing] not so much ‘findings’, properly speaking, as a confirmation of one’s worst suspicions – namely, that in the matter of caste discrimination in India, there is much cause for disquiet” (1994: 19). They find evidence of “systematically inferior status experienced by the Scheduled Castes and Tribes” (1994: 14). Thorat (1997) provides a comprehensive critique of the Hindu social order and lays out the links between the caste system and economic inequality. His account is affirmed by case studies (for instance, Mishra 1979; Sharma 1986; Chaubisa 1988), casual empiricism and accounts of atrocities (Krishnan 1993;
Recasting economic inequality 123 Jain 1997) and rigorous statistical calculations. Nayak and Prasad (1984), looking at differences in consumption levels between the SCs and STs and others for the state of Karnataka between two points five years apart, and Saggar and Pan (1994), analyzing consumption expenditure in four Eastern states for one time period, find conclusive evidence of inter-caste disparity. Even in the absence of a systematic, rigorous all-India study, this small body of literature does suggest the presence of ongoing inter-caste disparity and discrimination towards the lowest castes. A brief look at the affirmative action literature Like the bulk of the literature on the caste system in general, there is a gap between the economic quantitative studies and the affirmative action literature, most of which comes from sociologists and political scientists. For instance, Pai Panandiker (1997) and Chopra (1997) make comments on the nature of the affirmative action program in India that are thought-provoking, but do not provide any data to help us assess the validity of their claims. Chitnis (1997) suggests that “SCs and STs . . . [are] not uniformly as backward as they were” (1997: 91). How does one establish the validity of this, if not by all-India quantitative analysis? In fact, the Jayaraj and Subramanian (1994) study, mentioned above, suggests that Chitnis’ argument may not be borne out by the facts. The present chapter does not attempt to summarize all aspects of the affirmative action literature, since that debate goes beyond the mere establishment of economic backwardness. Meerman (1999), in a study of four “hardcore minorities” from different parts of the world presents evidence of economic deprivation, but sounds a skeptical note on the question of affirmative action. In Darity and Deshpande (2000), we discuss some evidence regarding the persistent disparity of SCs and STs, based upon the available evidence. Nesiah (1997) outlines the poor track record of SC–ST recruitment in public employment. Galanter (1997) outlines the larger problem of discrimination: preferential treatment has kept the beneficiary groups and their problems visible to the educated public, it has not stimulated widespread concern to provide for their inclusion, apart from what is mandated by government policy . . . [T]his lack of concern is manifest in the record of private sector employment [where the reservation system does not apply in India]. (Galanter 1997: 191) Galanter discusses the broader (and in a sense more crucial) question of whether affirmative action in India has succeeded in integrating the most marginalized groups into the mainstream or whether beneficiaries of affirmative action still face rejection in the set up to which they are admitted. These debates are extremely contentious and complex; an in-depth critique
124 Ashwini Deshpande requires, at the very least, another paper, if not more. The reason for introducing this topic is to establish (yet another) rationale for economic investigation of inter-group disparity.
Conclusion In a country with persistent and widespread poverty such as India, the preoccupation with research on overall poverty and disparity is natural. But as a result of this, in the economic scholarship on Indian inequality, identification of sources of inter-group disparity and understanding its causes, such as prejudice and discrimination, is still in its infancy. A critical review of the available literature suggests a prima facie case exists for considering caste as an important ingredient of stratification. The literature review also opens up a range of questions that can serve as the agenda for future work.
Notes * I am grateful to Sandy Darity for inviting me to talk to his class at the University of North Carolina (both the preparation for the lectures and the students’ responses helped shape many of the ideas in this chapter) and for comments on an earlier draft. I am also grateful to participants at the National Economic Association Meeting, New York, January 1999, and at the Mellon seminar at the Carolina Population Center, University of North Carolina, Chapel Hill where a preliminary version of this chapter was presented, and to the CPC library courier service for allowing me to focus on the pleasures of reading. 1 The issue of the overlap between caste and class is complex and is not discussed here in detail. For instance, while untouchable castes have often turned to “jobs which could be done without coming into close physical contact with caste Hindus” (Mencher 1974: 473) and thus form a large proportion of landless labor, not all landless labourers are untouchables (as Mencher discusses). There are issues about the growing proletarianization and the role of economic policy that are fascinating, but are beyond the scope of this chapter. 2 This would be highly questionable, given the debate surrounding the validity of a strict hierarchical ordering of castes (See, for instance, Dumont 1980; Gupta 1984; Chatterjee 1997; to get a flavor of the debate). 3 More than 50 million Indians belong to tribal communities which are distinct from Hindu caste society. These are the Adivasis, who have origins which precede the Aryans and even the Dravidians of the South. Many have lifestyles and languages that are distinct from any of the known religions in India. At the time of formulating the affirmative action policy, Jatis and tribes that were economically the weakest and historically subjected to discrimination and deprivation were identified in a government schedule as the target group of the reservation policy. These were called the Scheduled Castes (SCs) and Scheduled Tribes (STs). The former untouchable castes often identify themselves by the Marathi word Dalit (meaning “the oppressed”), employed as a term of pride. While the SC/ST nomenclature has grown out of government policy, Dalit is a more loosely defined social category. I use both the words in the chapter, and the context makes their usage clear. 4 The literature on poverty and inequality in India is vast and I make no attempt to provide a comprehensive list. To mention a few of the important works in this
Recasting economic inequality 125
5
6 7
8
9 10
11
area: the various essays in Srinivasan and Bardhan (1974, 1988); Tendulkar (1983, 1992); Chambers (1992); Gaiha (1992); Gangopadhyay and Subramanian (1992); Guhan (1992); Mohan and Thottan (1992); Vaidyanathan (1992). Jayaraman and Lanjouw (1998), Lanjouw and Stern (1998) and World Bank (1998) are some of the mild exceptions to this rule. While the focus of these works continues to be on poverty in general, the former two intersperse their analysis with a discussion of changes in the traditional caste hierarchy in the context of economic development in Palanpur, India. The latter notes the role of caste in discussing the poverty of SCs and STs under the head “who is the poor” (1998: 5). Both the Chicago school (Becker) and the economics of rural organization (Akerlof) have been criticized for an excessive focus on questions of efficiency at the expense of distribution. See Hoff et al. (1993) for a more detailed discussion. An objection to this from a sociological perspective could be that the contemporary meaning of “belonging to a caste” is not clear – for instance, to what extent does caste affiliation determine the behavior of its members? Or, what exactly is the contemporary nature of sanctions – do they apply only to marriage or to other social behaviors? All these questions are important but outside the purview of economic enquiry. Lal’s argument (1988: 72) is that given a set of problems that the ancient Indians were facing, such as political instability, the need for a secure labor supply for labor intensive settled agriculture in the Indo-Gangetic plains, uncertainty concerning outputs and so forth, the caste system was a “second best optimal response”. An analysis of this argument necessitates forays into ancient history that are well beyond the brief of this chapter. The traditional caste divisions implied a hereditary work allocation, where the specified arrangement of the flow of goods and services between the individuals in the system was called the Jajmani System. Lanjouw and Stern (1998) report on perceptions of change in Palanpur, where people they talked to felt that caste-based distinctions had become less important in recent decades (1998: 212). Such perceptions would find no place in the Scoville model. Platteau argues that patronage relationships display four main characteristics, which very briefly can be stated as follows: a b c d
they are highly asymmetrical; contain a strong element of affection; are comparatively stable; involve multiple facets of the actors concerned and imply a set of reciprocal obligations which stretches over a wide and loosely defined domain, including some degree of social security to the client, which could be important to poor villagers deprived of significant access to land.
The rationale of patronage from the point of view of the patron is made explicit later – basically he is assured of a pool of readily available trustworthy and compliant labor for agricultural tasks and for ritual, social and political activities or duties. 12 Struggles for greater equality in land holdings were a part of the independence movement and their strength varied across regions. Land reform after independence has been under the purview of state governments, thus depending entirely on the political will of a given state government. These two factors together contributed to the lopsided nature of land reforms. This is discussed in some detail in Deshpande (2001a). 13 For a comprehensive examination of the economic consequences of contemporary racism in the USA, see Darity and Myers (1998). 14 Parallel claims have been made by Brazilian scholars about the impact of
126 Ashwini Deshpande industrialization on racial attitudes in their country. For a discussion of some of the theories and the “dissonance between theory and data,” see Lovell (1994). 15 This term is due to Srinivas (1962), who believed that “Sanskritization is both a part of the process of social mobility as well as the idiom in which mobility expresses itself . . . can also occur independently of the acquisition of political and economic power” (1962: 9). This is how he describes the process: “A low caste was able, in a generation or two, to rise to a higher position in the hierarchy by adopting vegetarianism and teetotalism, and by Sanskritizing its ritual and pantheon. In short, it took over, as far as possible, the customs, rites, and beliefs of the Brahmins, and the adoption of the Brahminic way of life by a low caste seems to have been frequent, although theoretically forbidden” (1962: 42). 16 The main results of the Dhesi and Singh (1988) paper are summarized in Dhesi (1996). 17 Wage discrimination is defined as “unequal pay for workers with the same economic characteristics even within the same job” and job discrimination is defined as “unequal pay for workers with the same economic characteristics which results from their being employed in different jobs” (Banerjee and Knight 1985: 278).
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128 Ashwini Deshpande Lanjouw, P. and N. Stern (1998) Economic Development in Palanpur Over Five Decades, Clarendon Press, Oxford. Lovell, P. A. (1994) “Race, Gender, and Development in Brazil,” Latin American Research Review, 29: 3, 1–36. Mayer, A. (1996) “Caste in an Indian Village: Change and Continuity 1954–1992,” in C. J. Fuller (ed.) Caste Today, Oxford University Press, Delhi, 32–64. Mayoux, L. (1993) “A Development Success Story? Low Caste Entrepreneurship and Inequality: An Indian Case Study,” Development and Change, 24: 3, 541–68. Meerman, J. (1999) “Slow Roads to Equality: Persistent Poverty in Four Low Status Minorities,” mimeo. Mencher, J. (1974) “The Caste System Upside Down: Or the Not So Mysterious East,” Current Anthropology, 15: 4, 469–94. Mishra, G. P. (1979) “Bondage of Poverty: A Case Study of Scheduled Caste Households in Three Villages of Karnataka,” Economic Affairs, 24: 1–4, 9–15. Mohan, R. and P. Thottan (1992) “The Regional Spread of Urbanisation, Industrialisation and Urban Poverty,” in B. Hariss, S. Guhan and R. H. Cassen (eds), Poverty in India: Research and Policy, Oxford University Press, Bombay, 76– 141. Nafziger, E. W. (1975) “Class, Caste and Community of South Indian Industrialists: An Examination of the Horatio Alger Model,” Journal of Development Studies, 11: 2, 131–48. Nayak, V. and S. Prasad (1984) “On Levels of Living of Scheduled Castes and Scheduled Tribes,” Economic and Political Weekly, 19: 30, 1205–13. Nesiah, D. (1997) Discrimination With Reason? The Policy of Reservations in the United States, India and Malaysia, Oxford University Press, Delhi. Pai Panandiker, V. A. (ed.) (1997) The Politics of Backwardness: Reservation Policy in India, Konark Publishers, Delhi. Platteau, J.-Ph. (1992) “Aristocratic Patronage as an Ingredient of the Caste System: Formal Analysis and Dynamic Considerations,” STICERD Discussion Paper, No. 36, London School of Economics. Rao, V. (1992) “Does ‘Prestige’ matter? Compensating Differentials for Social Mobility in the Indian Caste System,” Economics Research Center, Working Paper, University of Chicago (PRC, 92–6). Saggar, M. and I. Pan (1994) “SCs and STs in Eastern India: Inequality and Poverty Estimates,” Economic and Political Weekly, 29: 10, 567–74. Scoville, J. (1991) “Towards a Formal Model of a Caste Economy,” in J. Scoville (ed.), Status Influences in Third World Labour Markets: Caste, Gender and Custom, de Gruyter Studies in Organisation, No. 32,Walter de Gruyter, Berlin and NY, 49–59. Scoville, J. (1996) “Labour Market Underpinnings of a Caste Economy: Foiling the Coase Theorem,” American Journal of Economics and Sociology, 55: 4, 385–94. Sharma, S. S. (1986) “Untouchability, a Myth or a Reality: a Study of Interaction between Scheduled Castes and Brahmins in a Western UP Village,” Sociological Bulletin, 35: 1, 68–79. Srinivas, M. N. (1962) Caste in Modern India and Other Essays, Asia Publishing House, New York. Srinivasan, T. and, P. K. Bardhan (eds) (1974) Poverty and Income Distribution in India, Statistical Publishing Society, Calcutta. Srinivasan, T. N. and P. K. Bardhan (eds) (1988) Rural Poverty in South Asia, Columbia University Press, New York.
Recasting economic inequality 129 Tendulkar, S. (1983) “Economic Inequality in an Indian Perspective,” in A. Beteille (ed.), Equality and Inequality: Theory and Practice, Oxford University Press, Delhi. Tendulkar, S. (1992) “Economic Growth and Poverty,” in B. Hariss, S. Guhan and R. H. Cassen (eds), Poverty in India: Research and Policy, Oxford University Press, Bombay, 27–57. Thorat, S. (1997) “Caste System and Economic Inequality: Some Unexplained Disparities,” unpublished manuscript. Vaidyanathan, A. (1992) “Poverty and Economy: The Regional Dimension,” in B. Hariss, S. Guhan and R. H. Cassen (eds), Poverty in India: Research and Policy, Oxford University Press, Bombay, 58–75. World Bank (1998) Reducing Poverty in India: Options for More Effective Public Service, World Bank Country Study, World Bank, Washington, DC. Yadava, R. C. and S. N. Chauhan (1997) “A Study of Occupational Mobility in Eastern Uttar Pradesh,” in K. Gupta and A. Pandey (eds), Population and Development in Uttar Pradesh, B. R. Publishing Corporation, Delhi, 61–81.
8
The mobility of Japan’s Burakumin Militant advocacy and government response Jacob Meerman
Not alien, just profoundly alienated. (Loury 1997: 154)
Introduction Japan’s Burakumin are a low-status minority of 2 or 3 million out of a total population of 130 million. They remain near the bottom of Japan’s class structure, although they are identical genetically and culturally (same language, religion, and customs) with other Japanese. Centuries ago, they originated as eta, those occupied in ‘polluting’ occupations (animal slaughter, leather work, disposal of the dead) and hinin, social deviants such as vagrants, unemployables, but also impoverished peasants who had threatened the authorities (Donoghue 1978: 27–8; Hirasawa 1989: 31). By and large only the memory of these groups remains, but the Burakumin still live in areas that only yesterday were segregated and decrepit ghettos, and still work in low-skill, blue-collar occupations. Long-standing discrimination by Japan’s majority explains their continuing existence as a low-status, low-income group. Since the 1970s, partly because of the militant advocacy of the Buraku Liberation League (BLL), an organization of and for the Burakumin, Japan’s governments invested the equivalent of tens of billion of dollars in ghetto rehabilitation and education. This “big push” dramatically reduced the gap in socio-economic status between mainline Japanese and the Buraku minority, although the latter are still far from parity with the majority. (In this chapter, “Buraku” means “of the Burakumin,” and the uncapitalized, “buraku” means those village(s) that had once been the exclusive residence of the Burakumin. “Burakumin” is a euphemism that literally means village (buraku) people (min).)1 Buraku mobility history is instructive for three reasons: the unusual manner in which the BLL has induced the government to promote “Buraku liberation”; the extraordinary manner in which the government has responded; and the question of the degree to which the Burkau minority is integrating into the larger society. The condensed account that follows concentrates on these three themes.2
The mobility of Japan’s Burakumin 131
Buraku history The institutionalization of the Buraku minority as polluted, endogamous, “ghettoized,” and exploited took place during the period of Tokugawa dominion (1603–1867). To promote social stability, the Tokugawa formalized Japan’s class structure into four quasi-castes: samurai, farmers, artisans, and finally merchants. Birth determined to which group one belonged. The Shogunate also “undertook to regulate the morals of the people and to prescribe their behaviour in the minutest detail” (Samson 1950: 192). The status and required behavior of the non-class, the outcast remainder, today’s Burakumin, was also defined. The Tokugawa segregated and regulated Buraku families in their buraku (i.e. villages, although today many are in urban areas) frequently in undesirable areas, e.g. on steep hillsides, river flood plains and other waste lands. Many maps deliberately omitted these settlements, although the authorities recorded the address of each buraku and the vital statistics of their inhabitants on an individual basis (as they did for all other citizens). Marriage was permitted only within the group. Over time, Tokugawan sumptuary regulation of Buraku dress and behavior became ever more humiliating. In some periods they were required to wear distinctive clothing such as blue collars; or were forced to keep their hair cut short. At times, their heads had to remain uncovered in all weather and women were not allowed to shave their eyebrows or blacken their teeth (Japan, An Illustrated Encyclopedia 1993: 535). By the eighteenth century they were prohibited from entering public places including shrines and temples or even the homes of common citizens. They were not permitted to attend school. Access to occupations was also regulated, although permitted occupations varied regionally, and over time. The de facto Buraku (i.e. the eta) monopoly of butchery, tanning and leather-work was formalized. Other occupations included roadwork, stonecutting, bamboo manufactures, subsistence farming, sweeping, fish-mongering, night-soil and garbage disposal, cremation and burial (Meerman 2002a). During the Tokugawa period, many desperate, nearly starving, rural people were dispossessed of their land (frequently for inability to pay taxes, or for revolting against their lords). These new Burakumin (or hinin) fled to towns in an attempt to earn a living, or in extremis, to beg, although even begging might be limited by local authorities (Groemer 2001: 263ff). During the nineteenth century Buraku children and adolescents commonly worked in factories or as baby-sitters and house servants for the better off (Hirasawa 1989: 47). Some Buraku residents were forced to operate leper or prison hospitals deliberately located within the buraku. The myths of the Burakumin as unclean, genetically inferior, and even as non-Japanese developed around the historical role of Japan’s leather workers (kawata, or pejoratively and less precisely, eta). The introduction and spread of Buddhism in Japan, prior to the first millennium, led to condemnation of meat eating and to the activities associated with it. Later the Shinto
132 Jacob Meerman association of pollution with death was linked with the Buddhist prohibition against killing animals. Hence, butchery, tanning, and leather work were condemned as polluting, and “this defilement was considered contagious” (Japan, An Illustrated Encyclopedia 1993: 146). The eta, the “filthy lot,” who practiced such occupations were isolated from the rest of society and condemned as morally, and intellectually tainted. Some of today’s Buraku minority trace their origins to villages of such leather workers. During Tokugawa rule, the buraku also absorbed a wide range and large number of social deviants These “new” buraku residents, or hinin (nonpeople, therefore animal) were usually forced into Buraku occupations and became tarred with the same brush: in the minds of the majority, those forced to live in burakus were blemished and contaminated. The authorities also encouraged many of the hinin to settle new ghettos and these also became “buraku”of the polluted and impure (Kitaguchi 1999: 78 ff; Groemer 2001: 274). Today the working definition of a member of the Burakumin is whether one lives in a buraku, or is descended from a Buraku family. Because the influx of “new blood’ during the Tokugawa was so large, relative to the traditional leather workers, few Burakumin today have any significant genetic connection with the medieval leather workers. The Tokugawa quarantine of the “unfit” also ensured that the Buraku population increased rapidly. The conversion of class to quasi-caste eliminated most upward social mobility including that of the leather workers, or those of hinin origin. By the last century of Tokugawa rule, it was very difficult for a Buraku resident to regain the status of a common citizen. Hence the influx of “hinin,” plus the natural increase in the established buraku, led to a large increase in the number of Buraku people. Overall, the Buraku population may have increased threefold from 1720 to the mid-nineteenth century, a period when Japan’s total population stagnated (Neary 1997: 54). The Tokugawa also assured the economic livelihood of the kawata Burakumin by supporting their leatherwork as an essential “war industry,” producing saddles, harnesses, bowstrings, leather-shields, and drums. (The Shogunates prohibited the use of firearms throughout Japan until their demise in the late nineteenth century!) Burakumin (both eta and hinin) also performed many other roles in support of the regime. They were occasionally used as militia to put down peasant revolts. Some became jailers, judicial torturers, and executioners. They were generally charged with disposing of the bodies of those executed. Some acted as government “look-outs” on roads or as gatekeepers who controlled entrance to towns (Acitelli-Donoghue 1978: 29). So, the Tokugawa “re-designed” the Burakumin as a means to maintaining power and, in the process, deliberately exacerbated prejudice and intolerance (Taira 1970; Groemer 2001). To this end they fostered the myth of Buraku impurity and blemished faculties. Because these defects were believed to be hereditary, it was necessary to isolate the Burakumin from society. They also used their creation in a police and military capacity (Neary 1989: Chapter 1).
The mobility of Japan’s Burakumin 133 The resulting association of the Burakumin with violent and vile duties increased the commoner’s fear and contempt of them. Today, much of the antipathy of mainline Japanese to the Burakumin has its roots in Tokugawa policy. Indeed, “Of all those special measurers which were created to help maintain the power base of the Tokugawa Shogunate, anti-Buraku discrimination is the only one which remains today” (Kitaguchi 1999: 133). In 1871, after deposing the shogunate, the Imperial Meiji Government issued the Emancipation Edict that ended outcaste status and converted the Burakumin to “new common citizens.” Occasionally described as a paper emancipation, the political decree had little beneficial impact for the Buraku population. On the contrary, farmers (humiliated because the Burakumin now had equal legal status) undertook “a series of pogroms aimed at exterminating the new commoners in 1872–3 and village governments moved to exclude them from all access to held in common village land” (Upham 1987: 80). Emancipation also ended the Burakumin monopoly on certain occupations (Donoghue 1978: 33); for example, Buraku shoe production soon proved unable to compete with newly introduced mass-production technology. In the ensuing decades progress to socio-economic parity with the majority was slow. De jure legal equality did little to overcome the many disadvantages of Buraku life and less to overcome the widespread discrimination against them. Although by 1912 many Buraku children attended primary schools, usually segregated, they rarely advanced beyond the primary level. Even in integrated schools, Burakumin were seated apart from other children at the back or side of the classroom. Play groups, eating utensils and toilets were usually kept separate (Neary 1989: 3). During the Meiji Period, Buraku leaders pursued a policy of reconciliation that stressed formal petitions for governmental relief, but little relief was forthcoming. By the 1920s, militant, young Buraku organizers, much influenced by Marxism and by Christian doctrines, had founded Shuheisha (the Levelers’ Society) to promote Buraku “liberation.” From its very beginning the new organization pursued a policy of confrontation of those responsible for discriminatory actions by condemning such actions and demanding apologies. In some cases the discriminators were pushed into measures to redress the discriminatory act, e.g. removal of the guilty person(s) from authority. Protested actions covered a wide range, although many involved no more than discriminatory speech. “The chief character of these early denunciations was their spontaneity and anger” and many actions ended in injury or destruction of property, or in fights with rightist groups. By the 1930s, Suheisha had gained widespread respect within the Buraku community and was planning campaigns with a view to maximum political impact (Upham 1987: 81–5). In 1937, however, Japan’s expansionist and militarist government simply closed down Suheisha as destructive of national unity. Following the Pacific War, Suiheisha re-emerged in 1947 as the National Committee for Buraku Liberation with strong backing from Japan’s Communist and Socialist political parties. In 1955, the Committee became the
134 Jacob Meerman Buraku Liberation League (BLL) and undertook a series of mass demonstrations and protests that increased public recognition of Buraku claims and sympathy for their plight. As a consequence, during the 1960s, many Japanese, perhaps a majority, became aware of the shocking physical environment of the Buraku ghettos, the poor education of Buraku youth and the Buraku pattern of employment, with its preponderance of low-paid day-laborers, cottage industries, and high unemployment. In 1969, the national government had established a nation-wide program of Buraku reconstruction and education by means of the “Special Measures Laws.” By then the BLL had over 2,000 branches and close to 200,000 members.
Economic and social status Economic and social data concerning the Buraku population are misleading, for three reasons. First, government Buraku statistics are based on surveys of the Burakumin residents of only those buraku classified as “dowa [integration] districts,”3 i.e. the 4,603 buraku that participated in the programs providing benefits under the Special Measures Laws. This dowa-district universe (also translated from the Japanese as dowa areas) excludes about one-eighth of the approximately 5,300 burakus identified by the government in the 1935 count (Su-Lan Reber 1999: n. 82). Second, currently less than half the population in the dowa districts is classified as Burakumin in government surveys. Within each district, the BLL and local authorities, and occasionally local political parties, have certified who is Burakumin and therefore eligible to receive targeted government benefits. The error rate in assigning Burakumin identity is unknown (Upham 1987: 113).4 Third, the estimates necessarily exclude the bona fide Burakumin that have emigrated from the burakus. In Tables 8.1– 8.4, the universe of Burakumin is defined as those residents in the burakus included in the dowa districts at the time of the survey that were certified as eligible to receive benefits under the special benefit legislation. A caveat, therefore, is needed in working with the statistics in the following tables: they apply, with some error, only to the Burakumin in the buraku, and exclude the Burakumin who no longer live in buraku. (Important implications of this shortcoming are taken up in the final section of the chapter.) Table 8.1 shows the large lag in Burakumin tertiary education compared to the entire population in 1976. In Table 8.2 the high rate of welfare payments suggests persistence of Table 8.1 Educational achievement, Buraku population and all-Japan, 1976
% completed College % attending prestigious Universities
Buraku population
All-Japan
3.4 3
13.7 21
Sources: Kirasawa (1989: 12, 13), except row 2 which is from Clear (1991: 87), original Japanese sources are listed in both dissertations.
The mobility of Japan’s Burakumin 135 Table 8.2 Selected survey results, Burakumin compared to total population, 1993 (percent)
Receive welfare payments (“livelihood security support”)a Own their own homes Long-term absentees from Junior High School Cohort entry into Senior High School
Burakub
All-Japan
52 63 5 92
7 60 2 96
Sources: Japan Government Somucho (1995), Surveys to Assess Conditions in the Dowa Districts, 1–31. The above data are cited by Neary (1997: 70–1). Notes a In 1979, 76 percent of the Burakumin received livelihood security support. b Burakumin in this table refers solely to Burakumin living in buraku classified as “dowa areas.”
Table 8.3 Highest level of education attained by Dowa-district Burakumin (1993) and total population (1990) (percent)
Primary School certification Secondary School certification Higher education certification (Of which University graduation) Non-attendance and drops-outs at primary level
Burakumin, 1993
National Census, 1990
55 32 8 (3) 4
32 45 21 (12) 0.2
Source: Somucho,1995, Actual Situation of Life Survey, 72. Note Data apply only to those who have completed their education.
Table 8.4 Highest education attained by Dowa-district Burakumin (1993) and all-Japan (1990), by age groups (percent) Age (years)
Completed elementary only Burakumin
Completed elementary only all-Japan
Completed secondary only Burakumin
Completed Completed Completed secondary advanced advanced only all-Japan Burakumin all-Japan
60–64 50–54 40–44 30–34 20–24 Total
80.3 73.0 45.6 17.5 16.5 55
49.0 39.5 22.1 8.2 8.7 32
12.5 20.4 43.9 60.4 63.8 32
38.8 45.3 49.2 49.1 58.1 45
1.5 2.0 8.5 19.8 17.3 8
10.4 13.3 23.2 41.1 31.0 21
Source: Kyo no Buraku Sabetsu, Kaiho Shuppan (1996), as derived from McLauchlan (1999: 14–15).
136 Jacob Meerman poverty for many Burakumin. Table 8.3 indicates that the dowa-district Burakumin today continue to lag behind the general population in educational attainment. It understates the gap in educational attainment because at all levels, Buraku students attend schools of poorer quality than mainliners. Table 8.3’s indication of the educational gap of the Buraku population is also misleading because educational attainment varies inversely with age, particularly with respect to the Burakumin. Table 8.4 eliminates this by providing data by age cohorts. Table 8.4 shows that for those in the age group 60–64, 14 percent completed secondary school, while the all-Japan total was 49 percent, a gap of 35 percentage points. For the most recent graduates, the age group 20–24, the data show that 81 percent of the Buraku minority completed secondary school, compared to an all-Japan total of 89 percent, an 8 percentage point gap. So through the secondary level the reduction in educational disparity has been dramatic. At the tertiary level the data are ambiguous. There has been an enormous expansion in the number of Buraku persons who have completed advanced education. Yet measured in percentage points, the gap between majority and Burakumin has increased from 9 percentage points for those in the 60–64 age cohort to 14 points for those in the 20–24 age cohort. Moreover, compared to the majority, very few Burakumin have graduated from a university (see Table 8.3) or other high-prestige institution while they are “over-enrolled” in the equivalent of American junior colleges. At the secondary level, too, Burakumin attended poorer quality schools. Review of the occupational and employment profiles of the Buraku population compared to those of the majority also indicates continued intergroup disparity. At the national level, Buraku populations have lower labor force participation rates than the majority, partly owing to higher rates of disability particularly among older workers, often the consequence of a childhood of poor nutrition and years of very hard labor. But even those in the labor force have a lower rate of employment than the majority. Most Buraku employees work in small and medium-size companies as blue-collar workers, frequently as temporary workers or day-laborers (Tomonaga 1993: 12). Few have ever had employment as permanent staff of the large modern corporations that pay the highest wages and offer life-time employment. A review of the occupational distribution of Buraku employees from an Osaka buraku (that has developed into a urban neighborhood) illustrates these findings. About one-third are low-wage, blue-collar government employees, e.g. janitors and cafeteria staff, water supply workers and railroad hands. Another third work in small companies (defined as having less than 30 workers) where employment fluctuates substantially. Many of the last third are self-employed, e.g. engaged in buying used materials for recycling or in labor-intensive, small-scale construction. (Su-Lan Reber 1999: 323). Consistent with this labor force account, estimates of comparative incomes since 1970 invariably conclude that mean Buraku incomes are 60 to 70 percent of those of the majority.5
The mobility of Japan’s Burakumin 137
Discrimination against Burakumin On-going and past discrimination explains the lag of the Buraku population in income and status behind the Japanese majority. But statistical inference that attempts to gauge the degree to which current discrimination (above all in labor markets and education) causes the lag does not exist. This section therefore describes the basic kinds of discrimination and indicates their impact. A few historical illustrations provide a perspective on the virulence of anti-Buraku discrimination: ●
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In 1880, the Ministry of Justice, in its Handbook of Japanese Customs and Folkways, described the Burakumin as “the lowliest of people, resembling animals.” In 1922, in Beppu, Oita Prefecture, the local police had a buraku burned down because of its proximity to the railroad line. Destruction was deemed necessary since part of the slum would have been visible from the Crown Prince’s Train as it passed through the town of Beppu. Prefectural authorities asserted that demolition was necessary because the buraku was a health hazard, and home to criminals and drifters (Neary 1989: 87). In 1933, the District Court of Takamatsu ruled that a Burakumin had committed a crime in marrying without disclosing his origins to his spouse (Su-Lan Reber 1999: 305). During the Pacific War, Buraku servicemen consistently received the lowest-status assignments. In the 1980s, the BLL documented many graffiti. They included “Kill Burakumin, Buraku people are human garbage” on a bridge pillar in Osaka; a pamphlet that circulated at Osaka’s University of Fine Arts declaring inter alia, “to protect the natural superiority of all decent Japanese citizens . . . no possible concession must be made towards eta filth”; in an Osaka primary school the graffiti was: “To the eta staff at this School. We won’t eat anything you have made . . . go and cook the dregs of hell . . . maggots” (Kitaguchi 1999: 142–4). In the 1990s electronic media were used to circulate “discriminatory documents” to recipients of electronic mail or on web pages (Tomonaga 1998: 25).
A key instrument in Buraku discrimination is the background investigation of genealogy and socio-economic status used to ferret out Buraku identity. Its use is most clearly documented with respect to marriage and employment decisions. Examination of family background to determine whether the candidate is of sound lineage and adequate status is common in Japanese marriage decisions. It is also a good way to avoid marriage with Burakumin. Employment discrimination is a most serious obstacle in the efforts of Burakumin to achieve parity with the majority. In taking employment decisions, Japan’s large modern corporations are particularly concerned that
138 Jacob Meerman those invited to “join the company family” will fit in harmoniously with other employees (Upham 1980: 66–7). Formerly, many companies explicitly stated “that they will not hire Burakumin” (Japan, An Illustrated Encyclopedia 1993: 146). Hence, the family history of candidates for employment is likely to be closely examined particularly with respect to the Buraku connection. Universities also have rejected Buraku applicants on the basis of family history (Upham 1993: 327). Numerous detective agencies conduct such background investigations, relying on at least nine different Burakumin lists that provide the addresses of present and former Buraku ghettos.6 Over 200 corporations in Japan, including most of Japan’s largest and most modern firms have purchased these lists and have used them to exclude job applicants of buraku origin, whether or not they belonged to the Burakumin minority. The use and sale of such chimei sokan (comprehensive guides to place names) is now illegal, although they still have a large sub rosa circulation. Investigators have also relied on the registrations of births and deaths by family (koseki), with their addresses in municipality offices. These provide information on the place of birth, parentage, and current residence of all individuals born in Japan.7 Until 1976 the koseki were open to the public. Today, would-be viewers or those requesting an abstract must explain the reason for the request, which the municipal authority may refuse. Nevertheless these restrictions are frequently ignored and discrimination based on koseki records remains common. During Tokugawa rule, Buddhist temples (which also own and manage associated cemeteries) were required to record vital statistics on their members, both alive and deceased. Most continue the practice and may provide the information to investigators (Japan, An Illustrated Encyclopedia 1993: 147; Su-Lan Reber 1999: 312, 358) In the “buraku hunts,” the acid test of Burakumin identity is evidence of having lived in a buraku or of being descended from families who were buraku residents. Buraku residence has been the only outward sign of the contaminated bloodline of the individual Burakumin that supposedly arose in the feudal past of the hereditary eta caste. This belief persists despite overwhelming evidence that most individuals with a current or genealogical history of buraku residence have no connection with the leather workers of the Tokugawa or earlier periods (Kitaguchi 1999: 81).8 Buraku discrimination persists notwithstanding Constitutional guarantees. Japan’s Constitution prohibits discrimination based on race, creed, sex, social status or family origin (Article 14), guarantees the free choice of occupation (Article 22), of marriage (Article 24), right to work (Article 27), and access to education correspondent to each person’s ability (Article 26). (Upham 1987: 105). Nevertheless, discrimination in labor markets is de facto “legal.” Japan never has had legislation that made discrimination against individuals or groups in the labor market or school admissions a punishable offense9 (Upham 1993: 327). During the late 1970s, as the BLL pressed for prohibition of the
The mobility of Japan’s Burakumin 139 lists used to identify individual Burakumin, the question of the need for specific legislation prohibiting employment discrimination came to the fore. The Minister of Justice stated that discrimination was a “matter of the heart” and not suitable for legal attention (Upham 1987: 117). A frequent response to the demand that firms not discriminate against Buraku and other minorities (Koreans, returnees of Japanese origin from China and other countries) is that this would interfere with their right to select employees and would have an injurious impact on firm operations.
The response of the Buraku Liberation League Both governmental authorities and the BLL emphasize the need to change mainline beliefs and attitudes about the Buraku minority, rather than to attempt to “legislate behavior.” The BLL has contended that prejudice against the Buraku minority and the irrationality and superstition that give rise to it are so pervasive among all classes in Japan that enforceable legislation against Buraku discrimination has not been feasible. Instead, the BLL has relied on “self-help.” Publications and conferences are part of the repertoire, but the League has also organized protests, street demonstrations and picketing by members for many reasons, including targeting discriminators, e.g. schools, teachers, firms, and publishing houses that print distortions and ‘discriminatory phrases’ in books or magazines” (Far East Economic Review 1992: 28–9). However kyudan toso (denunciation struggle) has long been the League’s most effective tactic (Upham 1987: 97). In the words of Ian Neary, kyudan toso is to the BLL what the strike has been to the labor union. Denunciation involves confrontation and judgment against the institutional or individual perpetrator of discrimination, generally followed by the discriminator’s apology and plan of remedial actions. In the event of presumptive discrimination (discriminatory language, discrimination in the workplace or school, breaking off a marriage engagement, publication of a controversial analysis of a Buraku issue, use of Buraku lists) the BLL may initiate a denunciation procedure that starts with a session designed to reach agreement between the BLL and the accused on the nature and content of the incident. The BLL usually finds that wrong has been done and the “denunciation session” follows. At both sessions the discriminators and their supervising authorities (if any) will be present. An incident involving a school teacher will require the presence of the teacher, his/her supervisors, but may also involve a representative from a higher level of government. In the denunciation campaign the target may not be so much the offender as the institutions seen as responsible for the offender’s behavior. Sessions take place in rooms or even halls in which the alleged discriminator and BLL face each other. The number of League participants typically exceeds that of the “defendants.” The responsible parties rarely justify their actions but are apologetic and deferential to the BLL. League speakers energetically
140 Jacob Meerman interrogate those considered responsible, directly or indirectly, for the discriminatory action. Usually the latter agree to rectify their behavior, stress their determination not to repeat it, and indicate measures that will be taken to avoid poor behavior in the future. Confession, self-criticism and resolution to do better in the future are the essential elements. The session may well end with an expression of thanks by the defendants to the BLL officials for having shown them the error of their ways (Otake 1997: 181ff). The foregoing gives a stylized version of kyudan, at least as it was practiced before the 1990s. During the 1970s and 1980s, kyudan was usually menacing and extremely humiliating for the defendants. Rohlen’s description conveys these aspects well: Suspected persons . . . are surrounded by League members and sympathizers and subjected to accusations and questioning, usually in very insulting language. The purpose is to shock and anger people so deeply that at last their eyes are opened to the reality of their “racist” thinking. Confrontations can last for hours and are often repeated over many weeks. The person surrounded almost inevitably breaks down under the pressure and yields to the insistent accusations and demands of those confronting him. At times the initial shock treatment includes dancing and chanting around the person, a technique known as “Indian style confrontation”; however the intensity of the assault varies greatly with the people involved and with the degree of resistance given. Some people following the trauma of thus being confronted, say it was a deeply moving and worthwhile experience, similar to a religious conversion, but others despise the technique [since it ] assumes the individual’s guilt and leaves no room for self-defense. The Communist party calls it a “kangaroo court” and a “violent assault on individual rights.” Clearly it can shatter a person and suicides have occasionally resulted from such treatment, especially when the confrontations are extended to relatives of officials. On the other hand, the League’s assertion that discrimination will not end short of such shock treatment also seems reasonable. (Rohlen 1976: 692) One, presumably atypical denunciation, and possibly the most extreme in the entire history of kyudan toso, went well beyond this description. In 1974, at Yoka High School in rural Hyogo Prefecture, 52 teachers were confined to school premises by supporters of the League to persuade them to start a Buraku study club at the school in cooperation with the League. The teachers were humiliated, intimidated and finally beaten during the 12 hours of their detention; 43 were hospitalized with broken bones and other serious injuries; 13 remained in hospital from 3–6 weeks (Rohlen 1976: 982–9). Denunciation sessions have been used as the principal tactic in elaborate campaigns covering entire regions, including efforts to enhance access to educational opportunities, improve infrastructure in Buraku settlements, and denounce those responsible for the Buraku blacklists (an undertaking that
The mobility of Japan’s Burakumin 141 continued for 10 years). In 1975, the League launched a major denunciation campaign for equal employment opportunity (Upham 1987: 107). Fear of denunciation sessions and other actions have made public discussion of Buraku issues close to taboo in Japan. For the same reasons, within Japan, non-partisan research on the Burakumin has been constrained. Japan’s mass media “avoid the issue as much as possible” (Masayuki, 1991: 284). Discrimination in word and deed has long gone underground.10 Consequently since the early 1980s documentation of discrimination is rare. Moreover, systematic measures of the scale and impact of denunciation actions are not documented. Although denunciation is often initially directed at individuals and associated institutions, such as schools or firms, it has probably been most effective when directed at government to force action on specific problems. Perhaps it has been most successful in helping to induce the government to undertake a vast program of rehabilitation of Buraku ghettos and of promotion of Buraku education with the introduction of the Special Measures Laws discussed in the following section. The failure of the national government to challenge kyudan toso suggests that Japan’s powerful national bureaucracy and other authorities accept it. Indeed, by the 1980s the judiciary had explicitly legitimized denunciation. There have been very few occasions (one of these was the successful suit for personal injuries filed on behalf of the Yoka high-school teachers) when subjects of BLL denunciations have filed a criminal complaint, despite obvious violations of the criminal code.11 During such suits the judiciary has accepted the BLL argument that denunciation is legal. In the Yata Middle School Case (1975)12 the Osaka District Court concluded that “it’s justifiable for society to accept the process called denunciation against discrimination as long as the methods and tactics don’t exceed reasonable limits.” In ruling on the appeal of this decision in 1981, the Osaka High Court affirmed the existence of “an abstract right of denunciation” as claimed by the BLL during its defense but also set limits in stating that denunciation is “cruel and soon becomes a form of private punishment that can not receive the full approval of the law” (Upham 1987: 96–8, 101; Neary 1997: 68). The BLL responded by asserting that “Charges that denunciation is intimidation are countered by the assertion that discrimination is intimidation, denunciation only its answer” and because the most fundamental human rights are invaded, denunciation is only a form of self-defense (Upham 1987: 108). The League’s denunciation tactics have become less aggressive since 1990, perhaps because of belief that old-fashioned kyudan toso has serious shortcomings and reduced public support. In the 1990s the League worked with international human rights groups and stressed international human rights declarations and treaties to which Japan has subscribed to structure the ongoing “struggle.” Moving the discussion into the international human rights arena may partly be due to the League’s conviction that legislation specifically prohibiting and punishing the various forms of discrimination commonly used against the Burakumin is highly unlikely (Buraku Liberation News, passim, in editions appearing since 1990).
142 Jacob Meerman
Government programs to reduce discrimination In 1961 the central government created a council to study the Buraku situation and to develop an anti-discrimination policy. The council’s report, completed in 1965, stressed that the Burakumin were identical to other Japanese, and that their origins had in no way tainted or polluted them. The report saw Buraku condemnation and discrimination as deeply ingrained in majority thinking, and as an expression of irrational and superstitious beliefs. The accompanying survey of burakus described “ghetto-like communities located on land liable to flooding . . . with poor housing . . . often lacking in such public services as sewers, tap water, streetlights and fire protection.” The shortfall in education was highlighted. It concluded that the deplorable state of the burakus had to be eliminated and that a large program of education needed to be undertaken (Neary 1997: 63). Moreover it was “the state’s duty to resolve the problem fundamentally and promptly,” and an enabling statute was needed to encourage governments to legislate special measures for the Buraku problem (Upham 1987: 85–6). In 1969, the Diet passed the first Special Measures Law (SML) for Assimilation (Dowa) Projects. It was succeeded by similar legislation in 1982, and by a third law in 1987 that expired in 2002. The SML financed three kinds of expenditure: capital outlays to improve buraku infrastructure; financial grants for Buraku families; and educational outlays. Prefectural and local governments carried out SML projects as agents of the state, i.e. the national government, but bore most of the financial costs. 13 Usually the state was to pay two-thirds or even a larger share, since Buraku discrimination was a “primary responsibility of the nation as a whole.” Rarely did the state keep its part of the bargain. Nor has it intervened in project implementation, nor taken part in the bitter political fights (frequently between the Communist Party and the BLL) that ensued over allocation of funds and distribution of benefits among the Buraku population (Upham 1980: 48; Upham1987: 86; Neary 1997: 61–5). Upham provides an excellent description of the programs, as they existed at about 1979: Streets are paved and widened; sewage and water systems are installed; public facilities such as schools, clinics and government offices are built; settlement houses, homes for the elderly and community centers are built and turned over to the B.L.L. to manage; and perhaps most important to the residents, a large amount of high-rise public housing is constructed. These programs are essentially urban renewal but with no attempt to change the demographic character of the neighborhood. It remains a Burakumin neighborhood and relatively poor although some of the public facilities are new and there may be marginally more open space . . . A second component of most programs consists of financial grants paid directly to Buraku families . . . The Osaka City program, although more generous than most, can serve as an example . . . When a Burakumin
The mobility of Japan’s Burakumin 143 marries, he or she receives ¥75,000. The birth of a child brings another ¥215,000, with the cost of milk subsidized during nursing. There is an elaborate and generous program of grants rewarding school attendance. From entry into day care through university, Buraku children receive annual grants plus an additional bonus at entry into elementary, middle, and high schools and university . . . School expenses are also covered. Those enrolled in vocational training receive similar treatment. Osaka and other local governments offer other programs not listed. A family with two children for example could easily receive more than ¥400,000 annually in Osaka, probably somewhat less in most other areas. This figure does not include indirect benefits such as subsidized rents . . . easy access to state-subsidized day-care and the convenient availability of public recreational and community facilities . . . The school programs . . . are two-fold. First schools in areas are more heavily staffed with smaller classes and extra tutoring for Buraku students. Second all schools both within and without the ghetto have instructional programs to explain the origin of Burakumin, the problem of discrimination, and the responsibility of the society under the new constitution to eliminate it. Posters criticizing discrimination . . . are placed in buses, subways and public offices. Speeches are given to unions, schools, neighborhood associations etc. by public employees specifically trained to present the correct view of the Buraku problem. The emphasis though is on the evil of discrimination and the democratic ideals of the constitution. The content is heavily moralistic and didactic, in many ways reminiscent of moral campaigns in Taiwan or China. (Upham 1980: 38–9) Additional aspects of educational support are noteworthy. In the 1970s and 1980s, many teachers made special efforts on behalf of the Burakumin. These included visits to the homes of Buraku pupils and development of measures to provide financial assistance to cover the costs of school supplies and uniforms.14 In some school systems, “welfare teachers” were employed on a full-time basis inter alia to encourage Buraku parents to send truant children back to school (Hirasawa 1989: 44, 65–9). Many of the welfare teachers “served the bridging function between Buraku communities and schools. They conducted seminars to improve teachers’ recognition of Buraku discrimination problems. They suggested reforms in school curricula and activities to ‘welcome’ absentee students to school” (1989: 69). During the 1970s, the newly constructed Buraku community centers were often the scene of supplementary schooling and adult literacy classes.15 A few Buraku children up to the third grade participate in supplementary academic classes provided at the centers; in the past such classes were often run by volunteer teachers of Buraku origins. They frequently emphasized the most difficult Japanese-language arts, such as use of kanji (Chinese characters), a competence that is of crucial importance in gaining admission to higher education (Clear 1991: 98ff). Since 1980, most of the cash subsidies of the SML have ceased. Some of
144 Jacob Meerman those that provided an incentive for higher school attendance now take the form of loans. One Buraku innovation has become universal: free textbooks in the public schools are now the nation-wide norm. In the early 1990s, according to BLL estimates, less than 1 percent of “finance [provided under the SML] is used for educational purposes” (Buraku Kaiho Shimbun, July 1997, as reported in Kitaguchi 1999: 8). The rent subsidies have continued and there are also important implicit subsidies to the activities carried out in the “new” community centers, e.g. day care for working parents. In general, however, the willingness of both the Japanese government, and the public, to subsidize the Burakumin had decreased substantially, even before the beginning of the economic crisis of the 1990s. How large have been the expenditures under the SML? In 1993, the National Government carried out a series of surveys of the 4,442 burakus designated as the dowa districts that benefited from SML programs. The surveys directly sampled about 60,000 Buraku households and 24,000 majority households. It published the findings in 1995, as a report in four volumes. The report concluded, “between 1969 and 1993 the total amount spent on SML projects was ¥13,880 billion” (Japan, Government 1995: 7; Neary 1997: 65). This multi-year aggregate was something like 5–10 percent of Japan’s annual GNP in the 1970s. Since 1979–80 (arbitrarily assumed to be the average-price year for the period during which SML expenditures took place), Japan’s consumer price index has increased about a third (Japan Government 1999: Table 15-9A). Expressing the total in today’s consumer prices gives ¥18,502 billion. The World Bank estimates that the purchasing-power-parity (PPP) rate of exchange between the yen and the US dollar in 2000 was ¥138 per dollar (World Bank 2002: 232ff), so the PPP total in US dollars comes to US$134 billion.16 The total number of Burakumin certified as eligible for such benefits was nearly a million. Were it a million, the total would imply outlays per Buraku person in PPP US dollars for 2000 of $134,000, extremely high support per Buraku person. In addition to these benefits, in 1993, 53 percent of Buraku households in the dowa districts received ‘livelihood security support,’ well above the national average of 7 percent, and roughly twice the proportion of non-Buraku households in the same districts that received security support. Moreover about a third of the same Buraku population received more than two-thirds of their rent payments as subsidies (Japan Government, Somucho 1995: 4, 21–2, as cited by Neary 1997: 70). The course of the SML brings to mind the concept of “reparations” in the meaning that the word has assumed for many in the USA: compensation for historical injury and injustice, that would not necessarily resolve the problem of poverty within the US African American community. Thus Upham concluded that: The ringing language of the S.M.L. and the conspicuous urban renewal projects serve as highly visible symbols of the government’s commitment
The mobility of Japan’s Burakumin 145 to social justice while simultaneously leaving the basic structure of discrimination untouched . . . The Japanese seem more comfortable, therefore, with giving Burkumin significant amounts of money than in trying to force employers to hire them. (Upham 1980: 72) In a similar vein, Su-lan Reber concluded that the special measures laws were “more like status-based welfare policies than laws that restrict discrimination” (1999: 348). But the welfare argument should not be exaggerated. It is obvious that most of the financial resources of the SML were used not for welfare purposes but to eliminate the intolerable physical state of the buraku ghettos (and one cause of majority prejudice against the Burakumin) and for education. Discrimination persists, most obviously with respect to marriage and employment decisions, as indicated by the persistent use of Burakumin blacklists by numerous private investigators. Both Upham and Su-Lan Reber propose a solution built around a law against discrimination, above all in employment, but also in school admissions. Su-Lan Reber suggests that “discrimination be made a civil instead of a criminal offense” since a “lower standard of proof would be required” and a “civil offense would most likely result in settlements out-of-court, which would be more suitable to Japan’s judicial system and culture.” Moreover, “Perhaps a body like the Equal Employment Opportunity Commission in the USA would be a valuable and appropriate entity to examine views of discrimination in the first instance.” In addition: “A law should be created to outlaw the use of buraku lists for discriminatory purposes; further a government body should be assigned the role of overseeing businesses and other organizations that are susceptible to using these lists for damaging purposes” (Su-Lan Reber 1999: 348–57).
The “passing” of the Burakumin? Notwithstanding the persistence of discrimination, it is probably also true that in about three decades the SML have facilitated an impressive reduction in socio-economic disparity between the Buraku minority and the majority. This is clearly signaled by the reduction in the education gap at secondary level. Before passage of the SML, few Buraku children received more than the compulsory 10 years of schooling; currently more than 80 percent of Buraku youth in the dowa districts complete high school (13 years of schooling). However, drawing the balance solely with the Buraku population of the dowa districts gives a very distorted picture of Buraku progress to parity in that it ignores the entire mobility history of those Burakumin who have passed out of the buraku into the larger society. Before one can draw the balance on the mobility progress of the Buraku minority it is necessary to come to grips both with the ambiguities in the very concept of the “Buraku minority” and, as a consequence, the difficulties in developing what might be called a “mobility metric” that fits the Buraku case.
146 Jacob Meerman Serious difficulties come to the fore with every attempt to estimate who is Burakumin. The government’s current definition, used to determine who benefits from the SML, has a two-step test: first the Burakumin lives in the former ghettos or special buraku, today’s dowa districts, and second the buraku resident is a descendant of the eta/hinin. This definition will “capture” all of the Burakumin if and only if there is complete endogamy within the Buraku population and there has been no Buraku emigration from the buraku. Neither assumption is true. There always has been substantial movement of Burakumin out of the buraku. At the moment of emancipation (1871) many of the hinin were quickly able to leave their buraku for mainline communities. But there was also a large influx of people into new burakus between 1871 and 1920. The coal mining industry greatly expanded after 1871, for example, and miners very often became buraku residents. (It is not known to what degree offspring of these new buraku dwellers, were certified as bona fide Burakumin.) Neary reviewed several reports and noted that: A survey of conditions in Kyoto in 1938 found that only 57% of those living within the Buraku areas had been born there and over 60% who had moved into the Buraku had migrated since 1932. Further, we are told, that the rate of migration into Kyoto was not as high as in other cities. (Neary 1989: 149) It is possible that many of those born in dowa districts and certified as bona fide Burakumin are descendants of people who moved into the buraku after 1871. It is likely that the pace of Burakumin out-migration greatly accelerated after the passage of the SML. The laws promoted a very large increase in educational attainment among the Buraku minority while the booming Japanese economy dramatically increased middle-class and other job opportunities for the newly educated Buraku minority. More education also promoted positive changes in basic attitudes of the more successful Buraku students (reduction of oppositional identity) and self-perception (increased self-esteem and confidence) but also reduction of distinctive Buraku speech patterns and behaviors. All of this probably facilitated the out-migration and integration of a large number of Burakumin into mainline Japanese society. Presumably this emigration is the reason why the average age of the Buraku population within the dowa districts is now above the Japanese mean, while the Burakumin share of total dowa district population decreased from 72 percent in 1971 to 41 percent in 1993 (Buraku Liberation News, No. 97, July, 1997, 9; Neary 1997: 70). The data on Buraku inter-marriage within the buraku also indicates an increasing degree of integration. Somucho survey data from 1993 found that only one-quarter of Buraku married couples living in a dowa district and under the age of thirty were endogamous, that is consisted of two spouses who were bona fide Burakumin, while 79 percent of marriages with husband aged 75 or older were endogamous (Japan, Government, Somucho 1995: Life Style Research Survey, Table 2–9). The BLL also insists that many Burakumin have left the burakus and
The mobility of Japan’s Burakumin 147 attempted to pass as majority Japanese and estimates that there are 3 million Burakumin alive today. Since the total of those Burakumin still resident in the 6,000 special buraku is estimated at 1.2 million,17 the League estimate implies that 1.8 million Burakumin have “passed” into the larger society (Buraku Liberation News, No. 96, May 1997: 8) and that the Burakumin are 2.4 percent of the total population. In contrast, the five government estimates made between 1871 and 1993 estimated a proportion that varied from 1.1 to 1.5 percent, albeit while defining the Burakumin solely in terms of buraku residency (Meerman 2002b). A crucial unresolved issue in this estimation exercise is the treatment of inter-marriage by Burakumin who have “passed.” At what point, in succeeding generations, do offspring with a single Burakumin ancestor become identified as being mainline Japanese? The discussion leads to an important conclusion. It is impossible to gauge the progress to parity with the majority of the Buraku minority (as measured by income or other marker of socio-economic status) because membership in that minority is undefined. Parity could also be measured by the increasing degree of exogamy over time, since exogamy is the acid test of a minority’s acceptance by and integration into the larger society.18 But this also has not been studied. Nevertheless, given the high degree of mobility into and out of the buraku it is probable that a large part of the Buraku minority has been integrated into the larger society. Perhaps, on average, the integrated Burakumin enjoy higher income and status than those who have remained in the dowa districts owing to reduced discrimination, access to better education, greater prevalence of a mobility-promoting family culture, better peer culture, etc. If this is true, redesigning the statistical and other data on the Burakumin to include information on those Burakumin who have “passed” would reduce the status and income disparity of Burakumin with mainline Japanese. Some scholars conclude that widespread “passing” by the (presumably) more upward mobile Burakumin suggests that meaningful comparison of dowa district Burakumin would be with blue-collar Japanese rather than with the entire Japanese population (Taira 1970).
Issues for further analysis High mobility into and out of the buraku also suggests that the Burakumin might be considered as a segment of a Japanese under-class, rather than the successors to an historical out-caste. Or consistent with mainline views of the buraku population as identical with Burakumin, the official definition of Burakumin could be stretched to include all who are poverty-stricken and long-term residents of the buraku. Defining bona fide Burakumin strictly as those of eta/hinin origins now makes the Burakumin a decreasing minority even within the buraku. Nevertheless, many buraku have retained their character as reservoirs for low-income segments of the population because of the inflow of “new” low-income minorities: Koreans, foreign workers, vagrants, descendants of Japanese returning from China and other countries, etc. In the
148 Jacob Meerman realm of public policy, perhaps what is needed is a focus on the buraku population per se, rather than continuing concentration on an ever-more elusive target, the descendants of the historical eta/hinin. In this way those Burakumin most in need, still “stuck” in the buraku, would not be neglected, while Japan’s other highly disadvantaged minorities could receive assistance. 19 It would be instructive to ascertain the degree to which that part of the dowa district Burakumin population, clearly descended from the Burakumin at the time of the Emancipation Proclamation, is in some sense caught in a poverty trap.20Analysis that seeks to understand why they remain in the buraku, while the other “historical” Burakumin have integrated into the larger society, could be helpful in advancing work addressing the general problem of the concentration of poverty in low-status minorities whose history of exploitation and of low mobility somewhat parallels that of the Burakumin; e.g. African Americans in the Western Hemisphere or the Dalits of India or native peoples long over-run by European colonizers as in Australasia. Further Buraku analysis could build on the work of George De Vos and others who made a start with this endeavor in their analysis of Buraku sub-culture (itself a consequence of earlier exploitation) as contributing to the persistence of the low status and income of the dowa-district Burakumin vis-à-vis the larger Japanese population (De Vos 1992). Some political scientists believe that a deprived minority will rarely be able to move to parity with the majority without serious political agitation and frequently the threat of violence by the minority itself. This suggests that the very militant tactics and strategy of the BLL may have been a necessary element in accelerating the pace of Buraku integration into the larger Japanese community. Specifically, without the BLL history of kyudan toso, and various other techniques of intimidation, mass protest, and energetic picketing, the SML would never have been undertaken and the Burakumin would be on average worse off than they are today. A difficult thesis to prove, but certainly one that merits further attention.
Notes 1 The word Burakumin has long been used as a euphemism to substitute for the traditional names of the two derivative groups of the Burakumin, the eta (filthy) and the hinin (less than human), two extremely derogative nouns. The usage makes sense since the eta/hinin were confined to ghetto villages that became known as special buraku. Recently the word Burakumin has also become less correct and has been eschewed by government, and by many writers. Circumlocutions are used instead, e.g. “Buraku people,” “Buraku struggle,” etc. In these, “Buraku” becomes an adjective meaning “of the Burakumin”. This leads to confusion since sometimes buraku means solely the village or villages of the Burakumin. It is also misleading since the majority of those living in the historical buraku are no longer Burakumin. Most recently, some writers in English use Buraku as a noun meaning Burakumin, compounding the confusion. Moreover, the Buraku Liberation League (BLL) has started to substitute the use the word burakujumin (residents of the buraku(s)) for Burakumin (McLauchlan 2001: 1). In this chapter, “Burakumin” may be used for brevity or to avoid ambiguity.
The mobility of Japan’s Burakumin 149 2 The implicit model that underpins this chapter is part of a research program that compares the mobility experience of four low-status minorities in normative perspective (Meerman forthcoming). A brief summary of this research is included in Meerman (2001). 3 The word is made of the kanji characters for “same” and “harmony.” It has been long used by government and others to identify programs designed to reduce Buraku discrimination. 4 The League gives the following definition of Burakumin: “Dowa-related residents [i.e. Burakumin] are defined as people living in Dowa areas and situated in poor conditions economically, socially, and culturally and whose socio-economic positions are considered to be unjustly hampered by discrimination based on the social class system institutionalized in the historical process of the development of Japanese society.” Using this definition, the League also states that 41 percent of the residents of the dowa districts are Burakumin (Buraku Liberation News, No. 97, July 1997). 5 For detailed comparison involving a single buraku see Su-Lan Reber (1999: 321). 6 One of the most widely used was based on the National Census of 1872–3 that listed the names and addresses of “all new commoners,” i.e. Burakumin. From this it was possible to derive the addresses of all burakus. The address list was updated with the publication of the “General List of Buraku Districts,” compiled by the government in 1935. A more recent list, of more than 200 pages, purports to provide an up-to-date list of all burakus including the number of households per buraku, and the occupations of their residents (Su-Lan Reber 1999: 311–12). 7 The right to school attendance and other social benefits requires registration of the new-borne in a koseki. 8 Tomohiko Harada’s definition is precise: “those people who were born, brought up and living in buraku, those who were not from burakumin family but came to live in buraku in the recent past and those who are living outside the buraku but have blood relationship with burakumin – all these are considered the burakumin minority by the majority Japanese,” Harada, Tomohiko, “Discrimination Against Buraku – Present conditions and problems to be solved,” in Long Suffering Brothers and Sisters Unite! (Buraku Liberation Research Institute (ed.) 1981 cited by Su-Lan Reber 1999: 300. 9 The 1947 Labor Standards Act prohibits wage and other forms of labor discrimination but is not enforceable. 10 It is possible that independent research on the Burakumin reported in English is further developed than similar work published in Japanese. 11 In US law these might include battery, kidnapping, and slander. 12 Several teachers at the Yata Middle School supported a candidate for political office who had circulated an election pamphlet that the BLL considered discriminatory. In the course of the denunciation procedure the teachers were held against their will until 3 in the morning, were intimidated in many ways and described by League officers as rats, and prejudiced bigots, inter alia. However food was provided, rest periods taken, and the rest room was available (Upham, 1987: 87–9, 99). 13 In 1973, for example, the Prefecture of Osaka budgeted $245 million for Burakumin improvements (Rohlen 1976: 689). 14 Zendokyo, a national advocacy organization of teachers, officials, and parents has been particularly active in working with Japan’s disadvantaged students, above all the Burakumin (Hirasawa 1989: 100, 104) . 15 In Osaka prefecture, which accounts for a tenth of the Burakumin, 51 percent of those taking literacy classes in Buraku community centers in the 1980s were adults in their forties and fifties (Kirasawa 1989: 59). 16 This presumes that the PPP rate of exchange is stable over time. 17 The BLL asserts that in addition to the 4,442 dowa districts with a Burakumin population estimated in the Somucho surveys in 1993 as 892,751, there are (or
150 Jacob Meerman were) another 1,558 special buraku with similar Burakumin populations that for one reason or another did not opt to participate in the SML programs as dowa districts. See Buraku Liberation News, No. 96, May 1997: 8. 18 “Intermarriage may well be considered the last step in assimilation. Sociologists have so considered it . . . Intermarriage is so crucial a final step, because it marks the highest degree of social acceptance . . . it is an indication that everything else in bringing groups together is working” (Glazer 1997: 128). 19 The BLL, which increasingly emphasizes human rights in its advocacy work, now seeks to define those of Korean descendant as Burakumin at least in some dowa districts (Communication from Alastair McLauchlan, 2001). 20 “The percentage of high-achiever buraku children is similar to the national average, but there is a significantly high proportion of low achievers and a relatively small number of middle-range performers in relation to the national average” (Okano and Motonori 1999: 125).
References Acitelli-Donoghue, A. (1978) “The Origin and Development of the Japanese Pariah,” Chapter 2 in J. D. Donaghue, Pariah Persistance in Changing Japan: A Case Study, University Press of America, Washington, DC. Buraku Liberation (and Human Rights) Research Institute (ed.) (1981) Long Suffering Brothers and Sisters Unite, Liberation Publishing House, Osaka. Buraku Liberation (and Human Rights) Research Institute (1983) The Road to a Discrimination Free Future, Liberation Publishing House, Osaka. Buraku Liberation (and Human Rights) Research Institute (1991) The Reality of Buraku Discrimination in Japan, Liberation Publishing House, Osaka. Buraku Liberation (and Human Rights) Research Institute (various) Buraku Liberation News (Buraku Kaiho Shinbun). Clear, L. (1991) Education for Social Change: The Case of Japan’s Buraku Liberation Movement, unpublished PhD dissertation, University of California at Los Angeles. De Vos, G. A. (1992) Social Cohesion and Alienation: Minorities in the United States and Japan, Westview Press, Boulder, CO. Donoghue, J. D. (1978) Pariah Persistence in Changing Japan: A Case Study, University Press of America, Washington, DC. Glazer, N. (1997) We Are All Multiculturalists Now, Harvard University Press, Cambridge, MA. Groemer, G. (2001) “The Creation of the Edo Outcaste Order,” Journal of Japanese Studies, 27: 2, 263–93. Japan, An Illustrated Encyclopedia (1993), Kodansha Ltd, Tokyo. Japan, Government (1999) Statistical Yearbook, Bureau of Statistics, Management and Coordination Agency, Tokyo. Japan, Government, Somucho (1995) Heisei Gonendo Dowachiku Jittai Haakuto Chosakekka no Gaiyo (Surveys to Assess Conditions in the Dowa Areas), 1–31. Somuchokan Kanbo Chiiki Kaizen Taisakushitsu (Report by the Management and Coordination Agency of the Prime Minister’s Office), 4 volumes, Tokyo. Kirasawa, Y. (1989) A Policy Study of the Evolution of Dowa Education in Japan, unpublished PhD dissertation, Harvard University. Loury, G. C. (1997) “The Conservative Line on Race, Review Article of America in Black and White,” The Atlantic Monthly, November.
The mobility of Japan’s Burakumin 151 Masayuki, T. (1991) “A Living Legacy of Discrimination,” Japan Quarterly, July– September, 283–90. McLauchlin, A. (1999) “Introduction,” in S. Kilaguchi, An Introduction to the Buraku Issue, Questions and Answers, Japan Library, Curzon Press, Richmond, Surrey, UK. McLauchlin, A. (2001) An Ethnographic Report on Fieldwork in a Japanese Buraku Community, Christ Church Polytechnic Institute of Technology, New Zealand, unpublished. Meerman, J. (2001) “Poverty and Mobility in Low-Status Minorities: The Cuban Case in International Perspective,” World Development, 29: 9, 1457–82. Meerman, J. (2002a) Description of Buraku Occupations and Corresponding References, mimeo. Meerman, J. (2002b) Detailed Estimates of the Total Buraku Population, mimeo. Meerman, J. (forthcoming) Slow Roads to Equality, Poverty and Mobility in Four LowStatus Minorities, manuscript. Neary, I. (1989) Political Protest and Social Control in Pre-War Japan, The Origins of Buraku Liberation, Humanities Press International, Atlantic Highlands, NJ. Neary, I. (1997) “Burakumin in Contemporary Japan,” in M. Weiner (ed.), Japan’s Minorities, The illusion of Homogeneity, Routledge, New York. Okano, K. and T. Motonori (1999) Education in Contemporary Japan: Inequality and Diversity, Cambridge University Press, Cambridge. Otake, E. (1997) Ayabe Life: Its Dimension of Buraku and Buraku-Min, unpublished PhD dissertation, University of Indiana. Rohlen, T. P. (1976) “Violence at Yoka High School: The Implications for Japanese Coalition Politics of the Confrontation between the Communist Party and the Buraku Liberation League,” Asian Survey, 16: 7, 682–99. Samson, G. B. (1950) The Western World and Japan: A Study in the Interaction of European and Asian Cultures, Knopf, New York, quoted by J. Keegan, A History of Warfare, Vintage Books, New York. Su-Lan Reber, E. (1999) “Buraku Mondai in Japan: Historical and Modern Perspectives and Directions for the Future,” Harvard Human Rights Journal, 12: 297–359. Taira, K. (1970) “Review Article: Japan’s Invisible Race Made Visible?,” Economic Development and Cultural Change, 19: 1, 663–8. Tomonaga, K. (1993) “From Partial Solution to Radical Solution of the Buraku Issue: A Critique Based on the Reality of Discrimination Against Buraku People,” in Human Rights in Japan from the Perspective of the International Covenant on Civil and Political Rights: Counter-Report to the Third Japanese Government Report, Buraku Liberation Research Institute, Osaka. Tomonaga, K. (1998) “A Critique Based on the Present State of Discrimination Against Buraku People,” Buraku Liberation News, No. 104. Upham F. K. (1980) “Ten Years of Affirmative Action for Japanese Burakumin: A Preliminary Report on the Law on Special Measures for Dowa Projects,” Law in Japan Annual, 13, 39–73. Upham F. K. (1987) Law and Social Change in Postwar Japan, Harvard University Press, Cambridge MA. Upham F. K. (1993) “Unplaced Persons and Movements for Place,” in A. Gordon (ed.), Postwar Japan as History, University of California Press, Berkeley. World Bank (2002) World Development Report 2002, Oxford University Press for the World Bank, New York.
9
Malaysia’s New Economic Policy Has it been a success? Faridah Jamaludin
Introduction This chapter aims to analyze the New Economic Policy (NEP), a program which was introduced in Malaysia in the early 1970s to improve socioeconomic conditions and racial divisions in income disparity. It examines how subsequent policy makers adapted to market dynamics by formulating policies that were essentially based on the principles espoused in the formation of the NEP, and how successful this was in ensuring that the end objectives of the policy were achieved. Malaysia is very dependent on human capital to achieve strong economic growth. Its multi-ethnic population gives rise to a variety of socio-political issues that have a direct effect on its economic development, as elaborated further below. Certainly it is not the only country to have undertaken specific government-mandated measures to increase economic growth while maintaining political stability. The NEP was launched in 1971 to protect the economic interests of the indigenous Bumiputera community, which comprises twenty races and ethnic groups, most notably the Malays. It was aimed at reducing poverty and interracial income inequality while maintaining stability and balance in the country, so that subsequent economic policies might have a more equitable effect.
The groundwork for progress: history and background of Malaysia More than anything else, the racial composition of Malaysia is the key to understanding the whole picture. It dictates the pattern of the economy, has helped to shape the constitution, and has influenced the democratic process and the party system. (Milne 1967) Malaysia’s blessing of natural resources can be deemed indirectly responsible for its racial composition. The heavy dependence of the country’s economy on commodities during the era of British colonization led to a dire need for workers in the various sectors of the economy, particularly paddy cultivation,
Malaysia’s New Economic Policy 153 tin mining, and rubber tapping. The period of British colonization also saw an increase in the numbers of Malays working as civil servants, particularly in more urban areas. This resulted in a shortage of workers to assist in the extraction of the two other important commodities – tin and rubber, which led to the importation of foreign workers from China and India. Today’s demographic patterns still exemplify the colonial model of industrial segregation, with the Chinese mainly concentrated in mining and the Indians in rubber tapping. Malaysia is today a multi-racial country made up of people who come from different backgrounds of race and religion and who speak different languages. The ethnic composition of the country was further influenced by the 1957 Constitution which set lenient immigration laws, awarding citizenship by jus soli to every person born in the country after Independence. In return for this liberal citizenship policy, the Malays received certain benefits which gave them special rights and privileges in the form of subsidies, scholarships, quotas, licensing, and trade concessions. Some Chinese leaders claimed that their acceptance of Malay ‘special rights’ was conditional on the understanding that they would be removed once the Malay/Bumiputera community was on par economically with the Chinese community. The Malay elite, on the other hand, claim that acceptance of “special rights” was forever (Chin 2000). Despite an impressive growth of 6.1 percent and a total increase in per capita income of over 30 percent over the decade ending in 1970, the demographics of Malaysia were still characterized by strong economic imbalances between urban and rural areas, between agriculture and nonagriculture, as well as between paddy farmers, fishermen, rubber smallholders, and the modern rubber estates. Unemployment rose at an average rate of 3.7 percent while the labor force increase grew at 2.9 percent (Malaysia 1971). Even though there was an increase in job creation in mining, manufacturing, government employment, oil palm, and forestry sectors, unemployment still was high in the agriculture sector owing to a reduction of employment in rubber estates which lost a fifth of their workforce between 1962 and 1967. The heavy concentration of the Bumiputera in the low-income agricultural sector accentuated a widening gap with the non-Bumiputera. Poverty amongst the Malays was at a much higher level than that of the Chinese and over the years this gap became more and more visible. British colonial policies tended to encourage the Malays to maintain their long-standing location in the traditional agricultural sector of the economy, including the least productive areas of fishing and rice cultivation. However, the Chinese were engaged in the more lucrative, highly efficient and productive commercial and industrial sectors. Growing industrial demand for tin, coupled with the discovery of large and rich deposits in Larut and Kinta in the state of Perak in the early nineteenth century had given rise to Chinese investment, British intervention and domination and finally, injection of foreign, mainly British capital and technology into the Peninsular. By 1883, Malaysia had become the largest tin
154 Faridah Jamaludin Table 9.1 Race, poverty, and family income Race
Poverty rate (%)
Average monthly family income (RM)
Malay Chinese Indian Others
64.8 26.0 39.2 44.8
172.00 394.00 304.00 813.00
producer in the world, supplying about 55 percent of the world’s tin. Although the Malays held a political stronghold in the country, economically they were very far behind the Chinese. Income disparity was not the only source of concern. Overall poverty levels were also high. In 1970, 49.3 percent of all families in Peninsular Malaysia were in an income bracket below the poverty level, with rates as high as 86 percent in rural areas. The incidence of poverty was especially prevalent amongst the Malays who had an average monthly income of about half that of the Chinese (Table 9.1). In the late 1960s, Malay frustration over the continuing economic imbalances, not only in income but in employment patterns grew, as government pledges for greater Malay participation remained unfulfilled. Exacerbating this discomfort was the failure of the government to secure an overall twothirds majority in the 1969 general elections, which produced fear of a political weakening of the National Front, a three-party coalition comprising The United Malays National Organisation (UMNO), The Malaysian Chinese Association (MCA) and The Malaysian Indian Congress (MIC). The Front had defended the existing Malay “special rights” guaranteed in Article 153 of the Malaysian Constitution. With the loss of the secure foothold in government, communal unease grew and racial tensions finally ignited into a riot on May 13, 1969, in which 169 people were killed. As a crisis response, the government met to identify the problems and remedy the disturbing economic and political conditions. Income disparity and different levels of growth among the various races were cited as the main sources of the inter-ethnic strife. After a series of short- and medium-term plans the NEP was finally formulated in the Second Malaysia Plan.
“A blueprint for the progress and unity of our nation”: formulation and implementation of the NEP Todaro (1997) believes that planning in developing countries is made necessary by the inadequacies of the market as a mechanism to ensure that individual decisions will optimize economic performance in terms of society’s preferences and economic goals. This clearly applies to Malaysia – prevailing dissatisfaction with the economic imbalance reached a climax in the 1969 racial riots in Kuala Lumpur. It was recognized that the period of British
Malaysia’s New Economic Policy 155 colonization had left a fragmented economic organization in the country which needed repair. The government launched the NEP in 1971, during the Second Malaysia Plan spanning the years 1971–5. Rather than constituting a single economic reform per se, it functioned more as a set of objectives and resulting policies. The NEP represents a dynamic set of policies that were continually amended to take account of changing external conditions as well as the program’s own successes and failures (Stafford 1997). The NEP, which was necessary to break the link between racial identification and occupational niches, also was an attempt by the government to achieve a more equitable distribution of income among the various ethnic groups. Its launch marked a period of heavy government intervention and planning in the economy. The two-pronged policy sought “to eradicate poverty among all Malaysians and to restructure Malaysian society so that the identification of race with economic function and geographical location is reduced and eventually eliminated, both objectives being realized through rapid expansion of the economy over time” (Malaysia 1971). The policy was designed to span a period of 20 years. The target was to have the the Bumiputera own 30 percent of the country’s wealth by 1990, an increase from about 2 percent in 1970. The Outline Perspective Plan (OPP), 1970–90, provided a series of long-term targets designed to help restructure the racial composition of employment and the ownership of wealth. It specified goals for corporate ownership and employment by racial group in 1990, with an emphasis on corporate assets, presumably to expand Malay participation in the modern non-agricultural sectors in which Malay ownership was markedly under-represented. The government emphasized that the restructuring of the economy was to be undertaken by rapid expansion, and therefore there should be “no grounds for fear or anxiety on the part of other Malaysians that government intervention in the private sector on behalf of the Malay community will lead to a deprivation of the rights or prospects of non-Malays” (Malaysia 1973). Only by the launch of the Third Malaysia Plan (1976–80) (Malaysia 1976, 1979) did the government have sufficient data for more specific planning. The Third Plan projected that the aims of the NEP could be achieved in quantitative terms: 1 2
The incidence of poverty was to be reduced from 49.3 percent in 1970 to 16.7 percent in 1990; The ownership pattern of share capital in limited companies was to change from the ratio of 2.4: 34.3: 63.3 (Bumiputera: Non-Bumiputera: Foreign) in 1970 to 30: 40: 30 by 1990.
Through the NEP, the government adopted a Harrod–Domar growth outlook, concentrating on investment with the expectation that industrialization would pull the rest of the economy along. Under the leadership of Tun Abdul Razak, the government pursued the following four main strategies:
156 Faridah Jamaludin 1
2 3 4
Increasing productivity and living standards of the poor through rural area urbanization (Rural Development Policies) and developing backward states and areas through new territory development programs. Reducing imbalance steadily and progressively, through overall economic development and direct income transfers. Increasing Bumiputera asset ownership by stock allocations and public ownership through intervention in commodity markets. Shaping a Bumiputera culture inclined towards commerce and industry by establishing agencies entrusted with promoting greater commerciality among the Bumiputera such as Bank Pembangunan (Development Bank), Bank Bumiputera (Indigenous Bank), and Amanah Saham Nasional (National Share Ownership Trust). The latter was a scheme for mobilizing Malay savings for equity investment by transferring corporate assets held under trusteeship to the Bumiputera.
Various institutions were set up under the NEP to oversee the implementation of these policies. In 1970 the Agricultural Bank of Malaysia was established to provide agricultural loans and credit. During 1971–80, a total of RM642 million loans was approved by the bank, mainly for paddy production, tobacco production and marketing. The Federal Agricultural Marketing Authority (FAMA) was reorganized in the 1970s as an advisory service agency disseminating market information. The Rubber Industry Smallholders’ Development Authority (RISDA) was established in 1972 to administer a replanting subsidy scheme. The task of restructuring equity distribution fell heavily on PERNAS (National Corporation) and the PNB (National Equity Corporation). PERNAS concentrated on building up companies for its own-account trading and the PNB was a holding company which held assets worth RM10 billion in 1990, investing in areas such as industry and commerce, mining, properties and plantations, most of which will eventually be transferred to Bumiputera individuals through a unit trust scheme, Amanah Saham Nasional. The NEP concentrated on development by “trusteeship.” The trustees were a small group of political decision makers whose visions determined the formulation of the policies, and there was a large body of officials and public service staff responsible for the execution of these policies and programs. Mehmet (1986) believes that under trusteeship, politicization has been given official sanction and has been institutionalized within the entire spectrum of the fight against rural poverty. Under the policy, the Bumiputera received favorable treatment under licensing and franchising regulations, quotas in jobs and university places, concessional loans and grants to enter industry and trade and privileged access to capital markets in line with the goal of equity restructuring. In mid-1980s, under the Mahathir government, the “Look East” policy was launched; foreign investors were encouraged to conduct joint ventures with the Bumiputera. Big government projects were developed, such as the
Malaysia’s New Economic Policy 157 national car, Proton, and Perwaja, a steel industry company. A bold policy of heavy industrialization also was initiated, with an emphasis on the oil refining sector.
“Active participation, not disruptive redistribution”: the economic consequences of the NEP This section examines the effects and changes in several areas of the economy during and after the NEP policy period. It attempts to evaluate the success of the policy in alleviating poverty and ameliorating income inequality during this period while examining the overall impact on the economy. Poverty alleviation under the NEP Table 9.2 shows that by 1987, poverty levels were declining at a promising rate, well on the way to achieving the targets set out under the NEP. Among the various races conditions had also improved; according to official statistics there had been a 41 percent reduction in poverty levels among the Malays, a 19 percent reduction among the Chinese and a 30 percent reduction among the Indians. As a result, the gap between inter-racial poverty levels narrowed, a trend that assisted in achieving the second target of the NEP, reducing income inequality. A breakdown of poverty levels within the economy show that between the years 1970 and 1984 the overall poverty level in the rural strata declined by 34 percent and in the urban strata by 13 percent. Table 9.3 provides a detailed insight into poverty trends within the various economic sectors. From the data it can be seen that the poverty rate for all main poverty groups, except that of small coconut growers, fell steadily throughout the period. However, it should be noted that this does not necessarily imply that all members of the rural strata experienced an improvement in their standards of living. There had been a reduction in absolute numbers of the rural working population over the years as the workforce composition had shifted in favor
Table 9.2 Incidence of poverty, 1957–87 (percent)
Rural Urban Total Malay Chinese Indian
Pre-NEP (actual)
NEP targets
NEP results (actual)
1957–8
1970
1980
1990
1980
1984
1987
59.6 29.7 51.2 70.5 27.4 35.7
58.7 21.3 49.3 64.8 26.0 39.2
43.1 23.0 15.8 9.1 33.8 16.7 Decline Decline Decline
37.7 12.6 29.2 39.3 16.5 20.5
24.7 8.2 18.4 25.8 7.8 10.1
22.4 8.1 17.3 23.8 7.1 9.7
Sources: Malaysia (1976, 1981, 1986, 1989).
158 Faridah Jamaludin Table 9.3 Peninsular Malaysia: poverty levels according to urban–rural areas, 1970, 1976, 1984 Strata
1970 Poverty rate (%)
1976 Poverty rate (%)
1984 Poverty rate (%)
Rural Small rubber tappers Rice farmers Estate workers Fishermen Small coconut growers Other farmers Other industries
58.70 64.70 88.10 40.00 73.20 52.80 89.00 35.20
47.80 58.20 80.30 – 62.70 64.00 52.10 27.30
24.70 43.40 57.70 19.70 27.70 46.90 34.20 10.00
Urban Agriculture Mining Manufacturing Construction Transportation and public amenities Trading and services Unspecified sectors
21.30 – 33.30 23.50 30.20
17.90 40.20 10.10 17.10 17.70
8.20 23.80 3.40 8.50 6.10
30.90 18.10 –
17.10 13.90 22.40
3.60 4.60 17.10
Total
49.30
39.60
18.40
Sources: Department of Statistics, Investigation after Survey (1970); Agricultural Survey (1977); Household Income Investigation (1984).
of urban employment sectors such as manufacturing, an area in which Bumiputera involvement rose from 29 to 33 percent. Amelioration of income inequality The NEP period also saw a successful reduction in income disparities among the various ethnic groups. The Gini coefficient figures for the period 1970–87 show an overall decline from 0.50 to 0.46, indicating a positive trend in the reduction of income inequality. Table 9.4 provides a detailed breakdown of the Gini coefficient figures. However, it is interesting to note that the coefficient figures of the rural Malays showed little improvement, rising from 0.42 in 1970 to 0.43 to 1987. Despite a higher concentration of wealth amongst the more influential Malay businessmen who benefitted from the NEP policies, a trickle-down effect to the rest of the community was not achieved. The phenomenon of intra-ethnic inequality led to intense debate over the benefits of the NEP. A deeper analysis of this will be conducted below. Equity restructuring One of the central concerns of the NEP was wealth distribution and corporate ownership. The Bumiputera in particular were encouraged to obtain shares in
Malaysia’s New Economic Policy 159 Table 9.4 Peninsular Malaysia: Gini coefficients, 1970–87 Ethnicity
Strata
1970
1976
1984
1987
Malay
Rural Urban Total Rural Urban Total Rural Urban Total
0.42 0.45 0.47 0.40 0.47 0.46 0.36 0.50 0.46 0.50
0.47 0.48 0.49 0.49 0.51 0.51 0.39 0.50 0.46 0.53
0.45 0.46 0.47 0.41 0.46 0.45 0.35 0.44 0.42 0.48
0.43 0.44 0.45 0.40 0.44 0.43 0.35 0.44 0.40 0.46
Chinese Indian All
Source: Osman-Rani (1990).
corporate assets to increase their participation in modern non-agricultural sectors. The distribution of corporate assets among the various races between 1970 and 1990 is captured in Table 9.5. Despite a 17 percent increase in Bumiputera share ownership, it can be seen that the wealth restructuring targets of the NEP had not been achieved by the end of the policy period. However, although Bumiputera ownership was still short of policy targets, other Malaysians, namely the Chinese, had not lost out, as their share ownership exceeded the estimated target by 12 percent. On the whole the only group to have lost out from this policy were foreign residents, who experienced an actual reduction in their share in the wealth pie. Nevertheless, owing to its focus on one ethnic group, the NEP was a controversial policy that was resented by the non-Bumiputera in Malaysia. Chinese complaints included allegations that the second prong, the restructuring of the economy to help the Bumiputera, was given too much priority over the first prong, eradication of income regardless of race. Table 9.6 illustrates the growth rates of income levels among the various races between 1979 and 1984 so that we may examine the basis of these allegations. Official statistics indicate that the Bumiputera community benefitted most from the policies implemented under the NEP. The average growth rate of the Bumiputera income was 1.6 percent more than that of the Chinese and 3.6 percent more than that of the Indians. In real terms, their average income increased by about 30 percent, whereas incomes of the Chinese and Indians increased by 20 percent and 9 percent, respectively. With the positive average growth rates of Chinese and Indian income, it cannot be said that the other races suffered as a result of the NEP policies, even though they were not given the preferential treatment that the Bumiputera were. Nevertheless, the emphasis on the economic status of the Bumiputera led to a reduction in disparity between the ethnic groups. The average Bumiputera household income increased from 52 percent of Chinese income to almost 57 percent, and from 65 percent to 78 percent of the Indian
160 Faridah Jamaludin Table 9.5 Ownership of share capital in limited companies, 1970–90 (percent)
Bumiputera Individuals Trust agencies Other Malaysians Foreign residents
Pre-NEP (actual) 1970
Estimated targets 1980
Estimated targets 1990
(Actual NEP results) 1980
1985
1988
2.4 1.6 0.8 34.3 63.3
16.0 3.4 12.6 40.4 43.6
30.0 7.4 22.6 40.0 30.0
12.5 5.8 6.7 44.6 42.9
17.8 10.1 7.7 56.7 25.5
19.4 13.0 6.4 56.0 24.6
Source: Osman-Rani (1990).
Table 9.6 Peninsular Malaysia: average monthly household income according to ethnic groupings, 1979 and 1984 1970 base price
Current prices
Ethnic group
1979
1984
Average growth rate 1980–4 (%)
1979
1984
Average growth rate 1980–4 (%)
Bumiputera Chinese Indian All ethnic groups
296 565 455 417
384 678 494 494
5.3 3.7 1.7 3.4
492 938 756 693
852 1,502 1,094 1,095
11.6 9.8 7.7 9.6
Source: Department of Statistics, Labour/Household Income Investigation (1980); Household Income Investigation (1984).
income. It can thus be concluded that although on a social front the second prong was not widely accepted, it nonetheless succeeded in achieving its main aim of reducing inter-ethnic income inequality.
The National Development Plan (1990) The post-NEP policy period At the end of the NEP period, despite significant improvements in poverty levels and income inequality trends, the full objectives of the NEP had not been achieved: the Bumiputera were in control of only 19 percent of the total corporate equity, 11 percent short of the intended target. Income disparities had also failed to decline to target levels. Structural and sectoral constraints still existed where the industrial base was restricted and limited the prospects of growth. There were shortfalls in the availability of infrastructure, industrial land, water and energy, exacerbated by a recession in the economy in the late 1980s which resulted in mass retrenchment and thus a slowing down of growth. In the last five years of the NEP, it was apparent that the improvements in the socio-economic conditions were meagre in comparison to what had been
Malaysia’s New Economic Policy 161 targeted. The Fifth Malaysia Plan (1986–90) reported that despite improvements in the national poverty level and the reduction of income disparity, achieving NEP targets of a 30 percent Bumiputera equity ownership and eradication of poverty by the end of the policy period were unlikely. In February 1991, Prime Minister Mahathir Mohamad introduced Vision 2020, a long-term plan which provided a framework for achieving socio-economic targets within a 30-year time period. Medium-term targets were set when the Sixth Malaysia Plan (1991–5) (Malaysia 1991) was embodied within the Outline Perspective Plan 2 (OPP2), a blueprint which encompassed a 10-year time frame for unified development towards 2020, outlining the targets for visible accomplishments. As part of OPP2 and to continue the efforts of the government in achieving further reduction in poverty levels and income inequality, the National Development Plan was launched in 1991, formulating the subsequent economic development of the economy. The National Development Plan The National Development Plan (NDP) did not differ greatly from the NEP, as the Bumiputera still receive favourable treatment in rights to land, employment in the public services, placement in higher education establishments, licences and scholarships. However, a major feature of the NDP was that it set no time frame for the attainment of the 30 percent Bumiputera ownership target, and priority was instead placed on a 7 percent annual growth target believed necessary for Malaysia to achieve “an economy that is competitive, dynamic, robust and resilient.” The NDP also aimed to set the pace to enable Malaysia to become a fully developed nation by the year 2020. The new policy reiterated the government’s commitment to the economic liberalization measures introduced in the mid-1980s. Its new dimensions comprised: 1
2 3
Attempts to eradicate hardcore poverty while at the same time reducing relative poverty. “Hardcore poverty” was estimated using half the povertyline income, which in 1995 was RM425 per month for a household size of 4.6 in Peninsular Malaysia, as a benchmark. The development of an active Bumiputera Commercial and Industrial Community (BCIC). Greater reliance on the private sector’s involvement in the restructuring process.
This section will now examine the first two dimensions. Development strategies for the Sixth Plan The emphasis in the Sixth Malaysia Plan was placed on the success already achieved during the NEP period and this enhanced the growth momentum to
162 Faridah Jamaludin bring about a better distribution of income. However, a main difference in this new policy was that owing to the improvements in poverty levels over the previous 20 years, the NDP would encompass methods that would ensure that poverty alleviation programs were targeted to the most poverty-stricken group of the population as a whole, regardless of race. “Hardcore poverty” was prioritized and this step was made possible because the NEP, although not entirely successful in achieving its targets, had managed to secure a platform from which economic growth and income distribution policies could be effectively implemented. In an attempt to move away from a planned economy and allow market forces to determine demand and supply of goods and services, the government launched numerous programs and schemes to encourage and develop a wider strata of entrepreneurs, especially among the Bumiputera. The implementation of the BCIC programmes gave Bumiputera entrepreneurs an opportunity to gain a strategic foothold in business and industry through the implementation of schemes such as the vendor development program, the franchize development program, and the venture capital scheme. Poverty eradication under the NDP As stated above, the NDP was primarily concerned with the reduction of “hardcore poverty.” Two years after its implementation there had been a further fall in poverty levels, the incidence of poverty in Malaysia declining significantly from 42.4 percent in 1976 to 13.5 percent in 1993. The “hardcore poverty” rate had also declined from 19.6 percent in 1976 to 3 percent in 1993. Reflecting the progress achieved in poverty alleviation, the mean monthly household income for Malaysia in current prices had, in general, improved from RM505 per month in 1976 to RM1,563 per month in 1993. Government allocations for the “hardcore poverty” programs in 1993 were RM280 million. The number of poor and “hardcore poor” households in Malaysia was considerably reduced, from about 975,800 and 415,300 households in 1976 to 517,200 and 116,400 households, respectively, in 1993, and by the end of 1995, the poverty rate as a percentage of total households had significantly improved (Table 9.7).
Table 9.7 Poverty rate as a percentage of total households, 1995 Poverty
1970
1980
1990
1995
Hardcore Urban Rural Overall
24.6 58.6 49.3
12.6 37.7 29.2
4.0 7.5 21.8 17.1
2.2 4.1 6.1 9.6
Source: Malaysia’s Socio-Economic Development (Presentation Slides), Economic Planning Unit, Prime Minister’s Department, Kuala Lumpur (1996).
Malaysia’s New Economic Policy 163 Bumiputera Commercial and Industrial Community The new dimensions of the NDP also emphasized the acceleration in the growth of an active Bumiputera BCIC. In an effort to create an active BCIC capable of competing in strategic industries and sectors of the economy, several new entrepreneurial development programs were introduced while the practice of allocating a portion of new issues of corporate equity to Bumiputera investors was continued. Between 1991 and 1995 the ownership of share capital of limited companies rose considerably among the Bumiputera, with an average annual growth rate of 12.1 percent. However, despite an equity ownership that was 77 percent higher in 1995 than it was in 1990, the government felt that the figures still demonstrated an inadequate Bumiputera share in corporate equity. This was primarily owing to the rapid growth in the acquisition of corporate equity, particularly by foreigners, consistent with the relaxation in regulations pertaining to corporate ownership introduced to attract foreign direct investment (FDI). The non-Bumiputera also reaped the benefits of a larger total corporate equity, which increased from RM108,377.4 million in 1990 to RM 179,792.2 million in 1995 (Table 9.8). It can be seen that the policies undertaken under the NDP by no means only rewarded the Bumiputera. Non-Bumiputera ownership of share capital grew significantly, and a negative growth was apparent only in the case of the trust agencies which was in line with the government’s move to reduce state intervention in the share allocation programs. As part of the BCIC program, the government in the Seventh Malaysia Plan (1996–2000) continued efforts to assist the entry of Bumiputera entrepreneurs into the business sector by providing one-off assistance in the forms of training, research and development (R&D) and technical support, credit and business infrastructure facilities and product promotion. JVs among Bumiputera, non-Bumiputera and foreign entrepreneurs were also an important aspect of the program, with a financing facility fund amounting to Table 9.8 Annual growth rate of share capital ownership of limited companies, 1990 and 1995 Ownership group
Average annual growth rate (%)
Bumiputera Individuals and institutions Trust agencies Non-Bumiputera Chinese Indians Others Foreigners Nominee companies Total
12.1 16.8 –8.2 9.0 8.3 20.6 35.1 12.6 10.2 10.7
Source: Malaysia (1996).
164 Faridah Jamaludin RM280 million provided by a consortium of banks. Efforts were geared toward increasing and mobilizing Bumiputera savings more effectively through institutions such as Amanah Saham Nasional, Amanah Saham Bumiputera and state unit trust schemes.
Higher education policies in Malaysia Education was another important area during the NEP period. As in most developing countries, improving human capital was a main objective, as well as improving “the quality of education for the building of a progressive society oriented towards modern science and technology” (Malaysia 1971). Higher education was an important tool for achieving policy targets, as a key policy measure in the formulation of the NEP, it involved controversial implications for the socio-economic front. Education as a policy tool The Second Malaysia Plan saw continued stress on education as one of the key means of developing human capital and expertise. One of the fundamental aims of the plan was the promotion of equal opportunities for people of all races to benefit from the modernization of the economy. Education was seen as a powerful measure in reaching this aim and its development was given priority to insure availability and wider access. Higher education was a very salient equity issue as it was often perceived as a means of restructuring Malaysian society to eliminate the identification of ethnic communities with restricted economic functions (Lee 1996). The implication of education policies Under the Second Malaysia Plan, investment programs in higher education were continued in the six colleges and universities. Between 1970 and 1990 Majlis Amanah Rakyat (Indigenous Trust Council) allotted RM700 million, or 67 percent of its total budget, for educational development. In order to insure greater Bumiputera representation in various professions and occupations in the modern sector, the government implemented a racial quota system: the ethnic composition of the students in the universities and faculties was to reflect the ethnic composition of the country as a whole. When admission to the University of Malaya was determined solely on the basis of examination results, only 20 percent of the students admitted were Malays, with most of the non-Malays being Chinese (Hashim). In 1975, amendments were made to the 1971 Universities and Universities Colleges Act whereby universities and tertiary institutions had to admit more Bumiputera students to redress the chronic imbalances between the Bumiputera and non-Bumiputera (Malaysia 1975). There is presently a 55:45 percent Bumiputera:non-Bumiputera quota system in local public institutions.
Malaysia’s New Economic Policy 165 Table 9.9 Racial composition of university students, 1966–7 and 1985 Bumiputera
Chinese
Indians and others
Total
University Malaya (1966–7) (%)
1,038 28.8
2,034 56.5
521 14.7
3,603 100.0
All Universities (1985) (%)
23,841 63.0
11,241 29.7
2,756 7.2
37,838 100.0
Source: Karthigesu (1986).
This step was not taken without opposition; opponents argued that it was a biased and unfair university entrance selection system, leading to lower educational standards. Selvaratnam (1989) believes that the implementation of this policy eroded a deeply entrenched university tradition, admission of students based exclusively on merit. Table 9.9 shows that prior to the NEP period, the number of Bumiputera students in University Malaya was less than half of the total student population and Chinese students were the majority. By 1985, the pattern had drastically changed: 63 percent of the students were Bumiputera and more than 95 percent of government scholarships for overseas tertiary education were awarded to Bumiputera students. On top of the quota restrictions, the government established MARA (Majlis Amanah Rakyat/Council of Indigenous Trust) institutes and colleges throughout the country; these offered employment-related courses such as accountancy and admitted mainly Bumiputera students. This illustrates the greater opportunities available for Bumiputera students, but their placement was at the expense of the Chinese and Indians. Each year thousands of Chinese students go abroad for their tertiary education, creating deep resentment owing to the high costs involved. However, in the mid-1990s the government decided to let foreign universities set up branches in Malaysia to give more non-Bumiputera students access to tertiary education inside the country. The number of Bumiputera students in local universities pursuing economics and management courses at degree level increased from 7,188 or 16.6 percent of the total number of students in local universities in 1990 to 12,700 or 20.5 percent in 1995. In technical-type courses, there was an increase from 3,835 students in 1990 to 5,500 in 1995. Out of a total of 50,600 Malaysian students studying abroad in 1995, about 20,000, or 39.5 percent, were Bumiputera students, majoring mostly in subjects such as science, engineering, medicine, economics, business, and management. Socio-economic consequences of education policies Not surprisingly, this preferential treatment in favor of Bumiputera students resulted in polarization of the races rather than racial harmony. Many
166 Faridah Jamaludin academically qualified non-Bumiputera are denied entry into local universities and have had to go overseas or seek further education at private colleges. Young and Ng (1992) find that in 1985, out of a total of 22,684 students studying overseas, 73.4 percent were non-Bumiputera who had failed to gain admission to local public institutions of higher learning or who had been offered places in courses not of their choice. Lee (1996) believes that polarization was perpetuated as a result of different ethnic groups seeking higher education at different institutions. A further dichotomy exists within the Bumiputera: results of government examination equivalent to Britain’s O and A Levels show that among the top 10 percent, Malays number only 3 percent and of the bottom 20 percent they account for almost 80 percent (Ungku Abdul Aziz 1989). Aziz believes that the source of the problem lies in the village schools, which lack basic facilities and amenities; as a result there is a growing split within the Malay community between the English-educated, urban-born and bred and the Malay-educated, recent arrivals to the towns. Findings by Mehmet and Yip (1985) show that the Malaysia scholarship policy discriminates in favor of richer households, where a more affluent Bumiputera is 21 times more likely than a poor one to be awarded a scholarship. They show that intra-Malay inequality of opportunity in higher education is significant, and conclude that scholarships are regressively distributed among all ethnic groups, favoring richer households. Selvaratnam (1989) believes that this implies that the scholarship policy has contributed to reproducing and maintaining a socioeconomic stratification within the Malay community, rather than promoting the upward social mobility of the poor Malays. This inevitably leads to a ‘dualism’ within the Bumiputera themselves as well as Malaysians in higher education as a whole. The educational policies adopted during the NEP period can thus be seen to have had both positive and negative repercussions. The policies permitted incorporation of a greater number of students into the higher educational system, both locally and abroad, which led to a higher trained workforce. However, a policy which was formulated to solve a problem of racial crisis and inequality paradoxically resulted in a more divided Malaysian community at both an inter-ethnic and intra-ethnic level. The dualism that exists as a result of the government-assisted steering of educational paths for the different races as well as within the Bumiputera community itself has led to a more divided nation with different mentalities and perspectives. While the impact is not seen in terms of violence or tension, it propagates a a dichotomy akin to a class system which contradicts the over-riding aim of the NEP and NDP of promoting national unity. The education policies therefore require refinement to ensure that the gain in the quantity of Bumiputera graduates is not at the expense of meritocracy and international competitiveness, as well as a cooperative and integrated Malaysian society.
Malaysia’s New Economic Policy 167
Analytical review The NEP and NDP periods: impact on the socio-economy since 1970 It could be surmised that the NEP and NDP were both successes. Based on empirical evidence, by the end of the NEP period poverty had been reduced to more than half of its level in 1970, and by 1987 rural poverty had decreased by 36.3 percent and urban poverty by 13.2 percent, resulting in a total reduction of well over 30 percent for the entire population. In terms of the second prong of the policy, wealth restructuring among the races, the Fourth (Malaysia 1981) and Fifth Malaysia Plans illustrate success since larger percentage of income was held by Malays during the period of the NEP policy (Table 9.10). However, statistics can be interpreted in many ways to produce a desired outcome. It is possible to downplay the significance of the figures, especially since Malay urbanization increased from 27 percent in 1970 to 37 percent in 1985. Furthermore, the population composition of the country has evolved; with the Chinese sending their capital and young abroad, it is difficult to ascertain the extent to which the increase in Malay income percentage can be attributed to the policies undertaken during the NEP period. In his book The Malay Dilemma, Mahathir Mohamad (1970) was fixated on establishing a middle-class Malay entrepreneurship. The NEP was seen as a mechanism of channeling state-owned enterprises into the hands of a larger proportion of the Bumiputera which would then ostensibly lead to an equality between the races. The 1975 Industrial Coordination Act (ICA) made unexempted companies ensure that there was at least 30 percent Bumiputera participation in their ventures. Specific projects approved by the Government qualify for an exemption, such as acquisitions by ministries and government departments, by Ministry of Finance Incorporated, by Menteri Besar Incorporated, and by State Secretary Incorporated, and privatization projects, whether at the Federal or State level, are considered as approved by the Government and therefore exempted from the guidelines of the Foreign Investment Committee governing the ICA. An investigation by Yasuda (1991) on the effects of the ICA on the Bumiputera between 1975 and 1985 discovered that Bumiputera ownership of corporate stock grew from 2.4 percent in 1970 to 7.5 percent in 1975, and from 12.5 percent in 1980 to 19.1 percent in 1985. Table 9.10 Malay median income as a percentage of Chinese median income, 1970–84 (percent) 1970
1973
1976
1979
1984
44
45
44
47
57
Sources: Malaysia (1981: 56); Fifth Malaysia Plan: 99.
168 Faridah Jamaludin However, what is seldom mentioned are the NEP ground rules that were established to prevent bloodshed. Few Malaysians, Malays or otherwise, challenge the notion that Malaysia is a Malay-dominated country where the political culture favors the majority. Nevertheless, there is a safety-valve in the form of a provision that allows non-Malays a free hand in business, provided they do so with a Malay partner. This gives the minorities a non-violent avenue for their energies and also provides Malaysia a chance to learn the business skills of their Chinese partners (Pillai 1996). A phenomenon generally known as the “Ali Baba business concept” began during the NEP period where in the early 1980s, despite a considerable number of Malays obtaining top positions in major corporations, their contributions to the businesses were often nominal. Most of the Malays who were active in the corporate sector were merely playing high-profile roles in their companies, with their Chinese partners often running the actual operations behind the scenes (Hing 1984). Malaysian economic statistics show that there was an increase in the overall standard of living in the country during the NEP period, while absolute poverty was reduced and inter-ethnic inequality improved. Overall, interethnic income inequality was reduced, the Gini coefficient decreasing from 0.50 in 1970 to 0.46 in 1987. The implementation of the NEP was not without its share of costs, however. Although it cannot be denied that the NEP was relatively successful in reducing poverty and ameliorating inter-ethnic income inequality, it also led to an exacerbation of intra-ethnic income inequality among the Bumiputera. Puthucheary (1984) finds that among Malays, the income share of the top 10 percent rose from 42 percent to 53 percent of income received by all Malays. He concludes that “at most 5 percent” of Malays benefited from such policies. As the economy of Malaysia is highly politicized, the success and failures of the NEP, despite its name, cannot be measured solely on economic statistics. Critics of the policy believe that it has resulted in the creation of a substandard and subsidy-dependent Bumiputera community, an example being in the quota system and scholarships granted in the education system which has led to dualism at both an inter-ethnic and an intra-ethnic level. Osman-Rani (1990) believes that the effects of the NEP also include the creation of a rentier entrepreneurial class based more on political connections than on competence and efficiency. This phenomenon is otherwise known as “cronyism” (a word coined in the US Truman administration in the 1950s which was accused of appointing friends of the President to government posts without regard to their qualifications). This derogatory term has frequently been used to characterize the modus operandi of the Malaysian government and large corporations often, but not necessarily, fronted by Malay businessmen with important political connections. There also has been an increased resentment among the non-Bumiputera for whom the achievement of the NEP objectives has been costly and discriminatory. The Chinese believe that the NEP quota system should be abolished and government intervention in
Malaysia’s New Economic Policy 169 favor of one ethnic group hostile towards them ended. In the words of Suhaini and McDonald: The NEP has been almost exclusively directed at getting more Malays into the modern economy, more Malays into urban professional and executive jobs, and more private-sector capital under Malay ownership; there are still not many Chinese senior officials, diplomats, soldiers or policemen; the Indian share of the corporate sector remains a little over 1 per cent after 20 years of the NEP, and some 96 percent of the landless settled on new rubber and oil palm schemes are ethnic-Malay. (1989: 00) The effects of discrimination are especially noticable in the non-public sector. The Chinese continue to outnumber the Malays in the private sector fields of doctors, dentists, engineers, accountants, architects, and lawyers, although between 1990 and 1995, the average annual growth rate of the Bumiputera in both public and private sector accountancy, medicine, law, and surveying were much higher than those of the Chinese and Indians. The NEP as an “infant industry” The Bumiputera ‘special rights’ entrenched in the NEP are comparable to Frederich List’s venerable “infant industry” argument. The positive discrimination applied in the policy can be likened to domestic infant industries being awarded special protection from international competition in terms of tariffs, subsidies and embargoes. To assist in creating a Bumiputera commercial and industrial community, the government participated directly in commercial and industrial undertakings. This was carried out through joint ventures (JVs) with the private sector and wholly owned enterprises, by constructing business premises, investing directly in productive commercial and industrial enterprises which were to be controled and managed by the Bumiputera and promoting in-service training programs and other activities covering financial and technical assistance. An unavoidable outcome has been a proliferation of state-owned enterprises (SOEs), especially “state-owned companies,” established under the 1965 Companies Act (Osman-Rani 1990). These include PERNAS and the PNB which have powers to establish subsidiaries to allow them to vary ownership structure in accordance with the requirements of the NEP (Puthucheary 1984). The justification for these agencies can be found in Skrentny’s (1996) arguments for the need of governmental agencies in carrying out the affirmative action policies in the United States: The question remains why a technical discourse emphasising efficacy and efficiency would be persuasive in the advocacy of a controversial if not illegitimate model of justice. The answer requires attention be paid to the
170 Faridah Jamaludin broader historical context of the civil rights enforcement agencies . . . administrative agencies themselves were created as part of an increasing emphasis on the efficient realisation of a just society, on solving social problems. The raison d’être of the agencies was problem solution, not institutionalisation of a model of procedural justice. The drawback of these enterprises in Malaysia is that they lack accountability. Their semi-autonomous status excludes them from being subjected to parliamentary scrutiny, which results in an inefficient system which could prove uncompetitive and dampen economic growth. As the infant matures . . . Like any infant industry, government support has to cease at a certain point to prevent over-reliance, complacency, and non-competitiveness in the economy. In the case of the NEP, 1990 was the initial cut-off point of government aid, but the failure to achieve fully the desired outcome of the policy led to its indefinite extension, albeit under another name and focusing on different priorities. The flexibility of the NEP and NDP has allowed the economy to mature and evolve into a more open economy with a more global outlook. Malaysian economic policy makers are now more influenced by international economic affairs in shaping their views by concentrating on FDI, increasing global competitiveness and an export-oriented economy. One of the most important changes that affected the role of Malaysia’s economy was the Plaza Accords agreed to by Japan and the USA in 1985, which realigned dollar–yen exchange rates. The strengthening of the yen caused production costs to skyrocket in East Asia, which led to a hunt by companies for a cheaper production base. With the opening of Communist economies such as China and Vietnam to foreign investment, Malaysia faced greater competition for the available capital, which forced its economy to be more efficient and competitive while limiting assistance from the government. This Doi Moi and liberalization concept also permitted greater regional trading, especially in the oil markets industry. Stafford (1997) believes that the desire to take advantage of global opportunities and the need for greater operating efficiency also led the government to take a more liberal approach in supporting Malaysia’s own companies, both at home and abroad. The country’s small domestic market necessitates international competition in order to survive. The implementation of the Asean Free Trade Area (AFTA) in the 1990s further increased the need for a robust economy able to compete regionally. In response to the dynamism of the regional economy, the government took a more ethnically neutral stance in supporting Malaysian companies overseas and locally by relaxing the Industrial Coordination Act. Owing to the need for local companies to be regionally competitive the government, despite its continuation and support of Bumiputera businesses and entrepreneurs, has been forced to alter its NEP-era views to meet the challenges of a more open economy.
Malaysia’s New Economic Policy 171
Has the NEP failed? The NEP, and its successor, the NDP, were tools utilized as a response to the racial tensions and economic disparity that were prevalent at the end of the 1960s. As a vision it was a structured plan to resolve the main overriding social tensions while at the same time taking care of the economy’s needs, preparing the nation for its race in a competitive global economy. On the whole, the agenda was carried out beyond its main two prongs, encompassing human resource development (HRD), privatization policies, public sector financing, regional development, industrial development, agricultural growth, energy, tourism and science and technology policies, among others. But the emotional and philosophical maturity of a country is something that cannot be easily quantified, much less planned at a national level. It is a by-product of all the structured policies that have been planned, yet plays an important role in determining the direction in which the country is heading. In the current global economic slowdown, Malaysia is facing a critical time; it is virtually impossible to have strong economic growth, particularly in a country which is at a developing stage, without strong political backing and support. The two issues are strongly bound together and Malaysia has not been spared external pressures. The 1998 dismissal of then Deputy Prime Minister Anwar Ibrahim sparked significant social unrest, resulting in the formation of new Opposition party which gained the biggest support ever in Malaysian history for a non-ruling political group. This, together with several major failures of companies that have a reputation of being given political favor by the Government, led to a loss of confidence in and credibility of the Mahathir government. The government buy-out of Malaysia Airlines in 2001 and the subsequent collapse of Renong, companies which were managed by NEP “baby-boomers,” demonstrated the fundamental weaknesses still prevalent in the system. Political freedom and freedom of speech, the two basic tenets of democracy, still exist in only limited form. With the Government practicing a paternal “controlled” democracy, it will be a long time before Malaysia can fully mature and embark upon the life cycle of social development – not unlike a rowdy teenager evolving into a mature adult, going through a period of criticism, making some necessary mistakes and eventually aware and acute enough to acquire social maturity. Not all governments which permit such freedom produce a more coherent and mature population, but perhaps create one that is more perceptive, which is one of the unmeasurable qualities of the human development index (HDI). The growth plan of a country as diverse and fragile as Malaysia should be two-pronged – economic as well as social. Social policies should go beyond the obvious issues already covered in Malaysian Plans – they should also cover the freedom of the people to voice their views and make their own decisions. Malaysia is a country that is liberal by Asian standards, but it expects to be fully economically developed and as competitive as First World countries, while not allowing the population to “ripen” and evolve to adjust to economic
172 Faridah Jamaludin liberalization. As illustrated earlier, there is already a dichotomy between local- and foreign-educated students. Apart from the typical “brain drain” prevalent in many developing countries, many are frustrated at their inability to practice the basic tenets of freedom such as media freedom, freedom of speech, and the right to assemble. Not able to indulge in their own beliefs and thinking, they have little choice but to borrow from others, and there are a lot of examples to follow, not all of which are healthy. Foreign influences abound and the “MTV culture” is typified in the younger generation, many of whom are unaware of how the NEP has affected their lives, knowing just that they are wealthier than their parents were. They are more content materially, they eat better, live longer and are better educated, but they do not have any more political freedom than their fathers did, nor any more original thoughts. These factors result in a schizophrenic society which has one foot in an economically developed county and the other stuck in trepidation in a political backwater. There is no doubt that Malaysia provides a case study of a Third World country which is faced with the stark issues of how far progress can be denied if the country is to be given any chance of reaching the much-sought-after status of a “developed nation.” There is a lot to learn about how such a multi-ethnic society can manage to live together in harmony and little, if any, bloodshed. While the people are no longer hungry, fewer are living in poverty, fewer are illiterate and most live longer, there is a danger of too high a dependence being placed on the Government to determine economic and market forces, thus hampering Malaysia’s chances of competing on the international front. The private sector, required to be competitive, is always the best representative in the global market, for it can generate enough funds and profit for new investments, R&D, and growth, money that the Government should be required to spend on public amenities such as health and utilities. Prolonged support of private bodies inevitably leads to a misallocation of resources as well as complacency on the part of the private sector as it is being upheld not by market competitiveness but by a life support machine; this is the key aspect which needs to be addressed and rectified. The criteria for judging the NEP’s success rate have to be clearly defined. The second prong has obviously been achieved. The first, however, has backfired. Given the current trepidation felt on the global economic front and the buy out and collapse of two major Bumiputera companies, it is becoming more difficult for the government to remove this support without defeating its first NEP objective – a more equitable redistribution of income. With a lower percentage of Bumiputera ownership in the country’s corporate wealth, will the issue of income disparity again repeat itself? Will there be another May 13? It is important to note that the objective of the NEP was to create an overall improvement in income distribution, not just for the select few. The 1998 Asian Financial Crisis was an impetus for a series of shake ups that sifted the able from the weak, the self-reliant from the dependent. The Bumiputera community cannot deny that it has not been given a chance to compete against the Chinese, yet it cannot claim that it has utilized this opportunity with the
Malaysia’s New Economic Policy 173 wisest of decisions. The NEP is still an ongoing process whose success rate can be determined only in the future. The 2020 Vision sounds good on paper, but Malaysia is still a long way from reaching the maturity levels so beautifully expressed in the country’s “wish-list” of long-term desires.
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174 Faridah Jamaludin Milne, R. S. (1991) “The Politics of Privatisation in the ASEAN States,” ASEAN Economic Bulletin, 7: 3, 322–33. Mohamad, M. (1970) The Malay Dilemma, Times Editions, Kuala Lumpur. National Economic Action Council (1998) National Economic Recovery Plan, Economic Planning Unit, Kuala Lumpur, July 31. Osman-Rani, H. (1990) “Malaysia’s New Economic Policy – After 1990,” Southeast Asian Affairs, 204–26. Pillai, M. G. G. (1996) “Best Practices,” http://www.worldpaper.com/Sept96/pillai. html Puthucheary, M. (1984) “Public Policies Relating to Business and Land, and the Impact on Ethnic Relations in Peninsular Malaysia,” in R. B. Goldman and A. J. Wilson (eds), From Independence to Statehood – Managing Ethnic Conflict in Five African and Asian States, Frances Pinter, 163. Puthucheary, M. (1984) “The Political Economy of Public Enterprises in Malaysia,” in L. L. Lim and P. L. Chee (eds), The Malaysian Economy at the Crossroads: Policy Adjustment or Structural Transformation?, Malaysian Economic Association and Organizational Resources, Kuala Lumpur. Selvaratnam, V. (1989) “Change Amidst Continuity: University Development in Malaysia,” in P. Altback and V. Selvaratnam (eds), From Dependence to Autonomy: The Development of Asian Universities, Kulwer Academic, Dordrecht. Skrentny, J. D. (1996) The Ironies of Affirmative Action: Politics, Culture and Justice in America, University of Chicago Press, Chicago, 142. Stafford, G. (1997) “Malaysia’s New Economic Policy and the Global Economy: The Evolution of Ethnic Accommodation,” Pacific Review, 10: 4, 556–80. Suhaini, A. and H. McDonald (1989) “The Corporate Cake,” Far Eastern Economic Review, June 22, 29. Todaro, M. P. (1997) Economic Development, 6th edn, Longman, USA, 573–600. Ungku Abdul Aziz (1964) “Poverty and Rural Development,” Kajian Economi Malaysia, I: 1, 70–105. Ungku Abdul Aziz (1989) “The Diploma Disease,” Far Eastern Economic Review, June, 31. Yasuda, N. (1991) “Malaysia’s New Economic Policy and the Industrial Coordination Act,” Developing Economies, 29: 4, 330. Young M. L. and S. K. Ng (1992) “Balancing the Roles of Public and Private Sectors in Education and Training,” Paper presented at Seminar on Educational Restructuring and Economic Growth: Role of the Private Sector, Malaysian Institute of Economic Research, Kuala Lumpur, November.
Index Abella, R.S. 43 Abella Report, The 43 Aboriginal and Torres Strait Islander Social Justice Commission (Australia) 71, 73, 79, 88n.4, 88n.5, 88n.7 aboriginals 10, 36–7, 40, 41, 43, 44, 45, 70–89 aborigines see aboriginals ABSTUDY 71 Actual Situation of Life Study (Japan) 135 Adivasis see scheduled tribes; tribals affirmative action 2, 53, 57, 65, 79–80, 81, 85, 86, 88n.8, 88n.10, 88n.15, 96, 106, 112, 123, 124n.3, 169–70 Africa 4, 78 African Americans 53–67, 144, 148; see also blacks Afro-Brazilians 9, 14–25; see also blacks Afro-Canadians 38–40; see also blacks Agricultural Bank of Malaysia 156 agriculture 113, 152–3, 170 Akerlof, G.A. 115–17, 125n.6 alcoholism 71 A Levels 102, 106 “Ali Baba businesses” 168 Altman, J.C. 76, 77 Amanah Saham Nasional (National Share Ownership Trust) (Malaysia) 156 Ambedkar, B.R. 6, 7 amerelos 17 Americas 4 Anderson, B. 65 Andrews, G.R. 25n.3 Ang, I. 96 anti-discrimination laws 56 apartheid 72 Araújo Costa, T.C.N. 15 Armed Forces Qualifications Test (AFQT) 54, 55–6, 65–6 Armed Forces Vocational Aptitude Test (ASVAB) 55 Armentrout, K.S. 56 Arrow–Debreu model 115 Arthur, W.S. 77 artisans 131 ASEAN Free Trade Area 170 Asian financial crisis 171 Asians 82, 86 Ati-Sudras see Dalits atrocities 122–3 Australia 1, 3, 10, 70–89 Australasia 148 Australian Bureau of Statistics 71, 72, 76–7, 78, 86n.2 Australian Parliament 88n.12 Ayrans 6–7, 124 Baer, W. 15 Bahía (Brazil) 15–25 Baker, M. 40, 48n.3 Balkan crisis 1
Banerjee, B. 121–2, 126n.17 Bank Bumiputera (Malaysia) 156 Bank Pembangunan (Malaysia) 156 Bardhan, P.K. 124n.4 Beaujot, R.P. 48n.1 Becker, G.A. 115, 125n.6 Belize 1, 3 Benjamin, A. 40 Beppu Oita Prefecture (Japan) 137 Bhakti movement 117 Bhattarcharjee, D. 121 Black, D.A. 68n.2 Black Power 53 blacks 2, 10, 14–25, 38–40, 52–67, 86, 144, 148 Blinder-Oaxaca decomposition 22–3, 25n.6, 35–48 Borjas, G. 61–2 Borland, J. 58 Bound, J. 58 Bourke C. 71 Brahmins 7–8, 114, 120, 125–6n.15 Bratsberg, B. 57 Brazil 9, 14–25, 101, 106, 125n.14 Brazilian Demographic Censuses 17–25 Breslaw, J.A. 48n.5 Breton, R. 37, 38, 48n.6 British Canadians 27–48 British colonization 152–3 Bucci, G.A. 122 Buddhism 131–2, 138 bumiputera see Malays, native (Malaysia) Bumiputera Commercial and Industrial Community 161–4 “buraku hunts” 137–9 Buraku Liberation League 11, 130, 133–4, 137, 138–42, 146–7, 148, 148n.1, 148n.8, 149–50n.17, 150n.19 buraku liberation movement 11, 130, 133–4, 138–42 Buraku Liberation News 142, 146–7 buraku lists 137–8, 145, 149n.4, 149n.6, 149n.12, 149–50n.17 burakumin 5, 11, 130–50 Burden, J. 71 Burundi 2, 5 Bush, G.W. 85 Byrne, B. 17 Cacon, N. 37 Canada 1, 3, 4, 9–10, 27–48 Canadian censuses 28–35 cancer 71 capitalism 120 Captain Cook 72 Carvalho, J.A. 14, 15 casinos 74 caste 2, 3, 5–9, 10, 112–26, 131 caste inequality see caste “Caucasian type” 8 Central Provident Fund 98 Chamars 113
176
Index
Chambers, R. 124n.4 Chanra, V.P. 121 Chaterjee, P. 124n.2 Chaubisa, M.L. 122–3 Chaubun, S.N. 120 Chaykowski, R.P. 48n.3 Chicago School 115, 125n.6 China 147, 170 Chinese Canadians 38–42 Chinese Development Assistance Council (Singapore) 99, 107, 108–9n.19 Chinese Malaysians 11, 152–173 Chinese Singaporeans 94–110 Chitnis, S. 123 Chopra, P. 123 Christianity 2 Christofides, L. 48n.6 Civil Rights Act of 1965 (USA) 53, 80 Civil War (USA) 80 class stratification 63–4, 77, 101, 104–5, 166, 168n.10 Clinton, W.J. 79, 80, 85 coal mining 146 coffee production 15, 24n.2 cognitive skills 10, 53, 55, 56–7 color 3–4, 5–9, 14–25, 28–35 commerce and industry 153, 156, 169 Commonwealth of Australia 77, 79, 80, 82, 84, 86, 88n.9 communal conflict 154 Communist Party (Japan) 133, 140 commuting distance 63, 64 Companano, M. 15 compensating differentials 119–20 compensation see reparations compensatory discrimination 96 Conerly, W. 88n.18 conjunctivitis 71 Consorte, J.17 Constitution (India) 112–13 Constitution (Malaysia) 153, 154 consumption 122, 123 credit discrimination 120–1 Croatia 1 “crony capitalism” 168 Croson decision (USA) 88n.11 culture 56, 62–4, 95, 97, 101–2 Currie, J. 55 Cutler, D.M. 64 Dalits 6, 8, 113–14, 118, 119, 124n.1, 124n.3, 148 Daly, A.E. 74–5, 76–7, 86 Darity, W. Jr. 1, 17, 52–3, 56, 62–3, 65, 66, 67, 68n.1, 68n.6, 78, 123, 124, 125n.13 Darwin (Australia) 72, 86 Dasas 7 Dearborn (USA) 64 decomposition see Blinder-Oaxaca decomposition Degler, C. 24n.3 Delhi (India) 121 democracy 171 denunciation processes 133, 139–42, 148, 149n.12 Department of Education, Training and Youth Affairs (Australia) 71 Department of Statistics (Singapore) 103, 107n.2, 107n.3, 107n.4, 107n.5, 107n.6, 108n.8, 110n.32, 110n.34 Deshpande, A. 1, 10, 67, 111, 113, 117, 123, 125n.12
De Silva, A. 37, 39 Dhesi, A. 121, 126 diabetes 71 Diet, The (Japan) 143 Dietrich, J. 62–3, 66 disabled, the 4 discrimination 133, 137–9, 141, 142–5, 168, 169; statistical evidence 2–3, 4, 9–10, 14–25, 35–46, 52, 64, 121–8; theories of 115–17, 118 District Court of Osaka (Japan) 141 District Court of Takamatsu (Japan) 137 Dobson, M. 72–3, 88n.7 Doi Moi 170 Donoghue, J.D. 130, 133 Dougherty, C. 39 dowa districts 134, 135, 142, 144, 146, 148, 149n.4, 149–50n.17 Dravidians 124 Driedger, L. 48n.1 Dumont, L. 120, 124n.2 East Indian Malaysians 153–4, 157–60, 163–6 East Indian Singaporeans 94–110 economic growth 2, 15, 94 education see schooling Emancipation Edict (Japan) 133, 146, 148 Employment Equity Act of 1986 (Canada) 4, 34–5 Equal Employment Opportunity Commission (USA) 145 equal opportunity 93–4, 96–7 equity restructuring 155–6, 158–64, 167, 172–3 Eritrea 1, 3 eta 130, 131, 137, 138, 146, 148 Ethiopia 1, 3, 4 ethnic capital 61–2 ethnic conflict 165–6 ethnicity 4, 27–48 eugenics 108n.9 Eurasian Association (Singapore) 99 Eurasians (Singapore) 94–7 Euro-Australians 72 Euro-Brazilians 9, 14–25 eurocentricism 75 Europe 4, 72 Europeans 148 exchange rates 170 exclusion 62–3 “fair” equal opportunity 93–4, 96–7, 103 Fairlie, R.W. 58 family effects 56, 63–4, 66 farmers 131 Feagin, C. 78 Feagin, J. 78, 88n.8, 88n.10, 88n.15 Federal Agricultural Marketing Authority 156 Federation of Malaya 108n.14 feudalism 120 Fifth Malaysia Plan 167 fishing 153 Fodor, E. 10 Fourteenth Amendment (USA) 80 Fourth Malaysia Plan 167 France 78 free rider problem 117 French Canadians 27–48 Gaiha, R. 124n.4 Galanter, M. 123
Index 177 Gandhi, M.K. 116 Gangopadhyay, S. 124n.4 gays see homosexuals Gebara, A. 25n.2 Gender Development Index 1 Gender Empowerment Measure 1 gender inequality 1–2, 17–19, 25n.5, 38, 44–5, 72–3 General Social Survey (USA) 61–2 genetic explanations for inter–group inequality 53–4, 95, 103–4, 108n.9, 132–3 geographic variations 8, 14–25, 111 George, P. 36 Germany 78 ghettos 134, 138, 145 Ghurye, G.S. 8 Gingrich, N. 85, 88n.18 Gini coefficients 94, 107n.6, 158–9, 168 Glaeser, E. 64 Glazer, N. 150n.8 Goldsmith, A. 63 Graham, D.H. 14, 16, 25n.2 Gray, A. 89 Great Depression, The 27 Green, A.G. 48n.1 Green, D.A. 48n.1 Gregory, R.G. 74–5 Groemenr, G. 131 Grogger, J. 64 Guilkey, D. 62–3, 66 Gujarat (India) 122 Gunderson, M. 48n.4 Gupata, D. 124n.2 Haessal, W. 42 Harado, T. 149n.8 “hard core” minorities 123, 130, 148, 149n.2 Harris, L. 88n.10 Harris, M. 17 Harrod-Domar model 155 Hashim, M. 165 Hawke, A.E. 76–7 health outcomes 71, 136 Heckman, J. 53 hepatitis 71 Herrnstein, R. 53, 54 High Court (Australia) 84, 88n.7 High Court (Osaka, Japan) 141 Hill, M. 108n.10,108n.12, 109n.20, 109n.22 Hinduism 2, 3, 5, 95, 111, 117, 122, 123n.1 Hing, A.Y. 168 hinin 130–2, 146, 148 Hinks, T. 10 Hoff, K. 115, 125n.6 Holzer, H. 58 homosexuals 85, 88n.17 hookworm 71 Horatio Alger story 120 Housing and Development Board (Singapore) 100–1, 106, 109n.20, 109n.21, 109n.23, 109n.24, 109n.25, 109n.26, 109n.27 Howland, J. 42 Hum, D. 38, 48n.5 human capital 60–2, 121, 164–6 Human Development Index 1 Hunter, B. 75, 76–7 Hutus 2 Ibrahim, A. 171
identity 15–17, 34–5, 96, 115–17, 134, 145–7 Imani, N. 78 immigration 25n.2, 27–34, 86, 94, 96, 106n.7, 122, 153, 165–6 Immigration Act of 1953 (Canada) 27 Immigration Act of 1967 (Canada) 28 Immigration Act of 1978 (Canada) 28 imperfect information 115, 122 imprisonment 71 income distribution 94, 155, 158–9, 168 income inequality 1, 71–2, 94, 104–5, 122–3, 136, 155, 158, 168 Independence (India) 112, 120 Independence (Malaysia) 153 index of dissimilarity 25n.5 India 1, 3, 5–9, 10, 78, 101, 112–126 Indian Malaysians 154, 159–60, 165 indigenous peoples 9, 10, 17, 25n.4, 36–7, 40, 41, 43–4, 45, 70–89, 148, 152–73 Indigenous Trust Council see Majlis Amanah Rakyat Industrial Coordination Act of 1975 (Malaysia) 167, 170 industrialization 15, 125n.14, 133, 157 infant industry 169, 170 infant mortality 71 integration 101, 109n.26, 109n.27, 146–7 intelligence and race 53, 57 inter-generational mobility 61–2, 68n.3 inter-group inequality 19–22, 35–48, 52–67, 71–5, 94–5, 104–5, 111, 114, 134–9, 144, 152–4, 158–64, 167 inter-marriage 137, 145–7, 150n.18 Ireland 78 Islam 2, 5, 97–8 Israel 1, 3, 4 Jain, M.K. 122–3 Jajmani matrix 118–19 Jajmani system 119, 125n.9 Jakarta (Indonesia) 94 Jamaludin, F. 11 Japan 1, 3, 5, 11, 130–50, 170 Japan Government Somucho 135, 144, 146, 149–50n.17 Japanese Koreans 147, 150n.19 Jatabs 121 jatis 7–9, 114 Jayamaran, R. 121, 124–5n.5 Jayaraj, D. 122, 123 Jim Crow 62–3 job tenure 57–8 Junankar, P.N. 77, 86 juvenile justice system 71 Kain, J.F. 64 Kalbach, W.E. 48n.1 Kanbis 122 Karnataka (India) 123 kawata see eta Kenya 122 Kerala 8 Kidd, M. 48n.3 Kinta 153 Kirasawa, Y. 130, 131, 134, 143, 149n.14 Kitaguchi, K. 138 Klass, M. 7, 8 Knight, J.B. 121–2, 126n. 17
178
Index
Koreans see Japanese Koreans Kosambi, D.D. 7 koseki records 138, 149n.7 Kowarick, L. 15 Kranton, R. 116 Krishnan, P.S. 122–3 Kshatriyas 7, 114 Kuala Lumpur (Malaysia) 154–5 Kuhn, P. 36, 37 Kuo, C.Y. 36 Kuran, T. 117 Kush, J. 42 kyadan toso see denunciation processes Kyoto (Japan) 146 Kyriazis, No. 9, 42 labor force participation rates 72, 107n.6 Labor Standards Act of 1947 (Japan) 149n.9 Lai, A.E. 108n.12, 109n.27 Lakshmanasamy, T. 122 Lal, D. 117, 125n.6 Land, J. 17 landlessness 119, 123n.1, 131 land ownership 72, 88n.7, 119, 121 land reform 119, 125n.12 Lanjouw, P. 120–1, 124–5n.5, 125n.10 Larat 153 Latinos 58 leatherworkers 131–2, 138 Lee, K.Y. 95, 102 Leonard, J. 65 Leveler’s Society see Shuheisha Levy, F. 55 Li, T. 106, 108n.10, 108n.13 Lian, K.F. 108n.10, 109n.20, 109n.22 liberalization 170 Life Style Research Survey (Japan) 146 linguistic variation 5, 33–6, 101, 105, 107n.1, 107n.2 List, F. 169 “Look East” policy 156–7 Loury, G.C. 53, 130 Lovell, P. 9, 125n.14 low status minorities see “hard core” minorities Lui, J. 76–7, 86 McKeever, M. 10 Mackenzie District (Canada) 36 McLauchlin, A. 135, 148n.1 McVay, W.A. 49n.1 Madhaswaran, S. 5, 122 Mahathir, M. 156–7, 161, 167, 171 Majlis Amanah Rakyat 164, 165 Maki, D. 48n.5 Malays, native: (Malaysia) 11, 152–173; (Singapore) 94–110 Malaysia 1, 2, 3, 4, 11, 152–73 Malaysia Airlines 171 Malaysian Chinese Association 154 Malaysian Indian Congress 154 Manadarin 105 Marathi 124n.5 Masayuki, T. 141 Mason, P. 10, 52, 56, 63, 64, 65, 68, 68n.1, 68n.6 Mayes, A. 112–13 Mayoux, L. 120–1 Mead, L. 52, 55 Meerman, J. 5, 111, 123, 131, 147, 149n.2 Mehmet, D. 166
Meiji regime 133 Mencher, J. 112, 124n.1 Mendaki 97–9, 106–7, 108n.15, 108n.17, 108–9n.19 Menteri Besar Incorporated 167 merchants 131 meritocracy 20, 61–2, 93–110, 166 middle classes 3, 146 Middle East 78 migration 122, 146 military 85 Miller, P.W. 48n.4 Milne, R.S. 152 Ministry of Finance (Malaysia) 167 Ministry of Justice (Japan) 137, 138 minorities 2, 4, 28–48, 123, 130, 168 Mishra, G.P. 122 Mohan, R. 124n.4 “Mongoloid” type 8 Montonori, T. 150n.20 Moore, R.D.Q. 10 Moore, S. 71 “mulatto escape hatch” 25n.3 mulattos 14–25 multiculturalism 34–5 multiethnic society 152 “multiracial meritocracy” 10, 93–110 Murnane, R. 55 Murray, C. 53, 54, 55 Myers, S.L. Jr. 10, 65, 75, 76, 78, 88n.10, 88n.15, 125n.13 Nafziger, E.W. 120 National Census of 1872–3 (Japan) 149n.6 National Committee for Buraku Liberation 133 National Corporation (Malaysia) see PERNAS National Development Plan (Malaysia) 160–4, 166, 167, 169, 170, 171 National Equity Corporation (Malaysia) see PNB National Front (Malaysia) 154 nationalism 96 National Longitudinal Survey of Youth (USA) 54, 58, 61 National Sample Survey (India) 122 National Share Ownership Trust see Amanah Saham Nasional native Americans 2, 72–5, 85 Nayak, V. 13 Neary, I. 133, 141, 142, 144 “Negroid” type 8 neighborhood effects 61–2, 66, 106 Nembhard, J. 1 neoclassical economics 75–6, 115 Nepal 3 Nesiah, D. 133 “new common citizens” 133 New Economic Policy (Malaysia) 11, 152–73 New South Wales (Australia) 73, 88n.4 New Zealand 1, 3 Ng, S.K. 166 N Levels 102 “non–racial democracy” 88n.14 North Africa 78 North America 4 Northern Territory (Australia) 73, 88n.4 Oaxaca, R. 43 occupational status 19–22, 62–3, 113, 120, 131, 132, 136, 152–4
Index 179 occupations, degraded 113–19, 131–4 Oettinger, G.S. 58 Office of Federal Contract Compliance (USA) 65 Okano, K. 150n.20 O Levels 102–3, 166 Oliveira, L.E.G. 15 Osaka (Japan) 136, 137, 143, 149n.13, 149n.15 Osmani-Rani, H. 168 Otake, E. 140 Outline Perspective Plan (Malaysia) 155 Outline Perpective Plan 2 (Malaysia) 161 Pacific War 133 Palanpur (India) 124–5n.5, 125n.10 Pan, I. 123 Panandakar, P. 123 pardos 15–25 passing 2, 145–8 Pathucheary, M. 168 Patidars 121 Patrinos, H.A. 36 patron-client relationship 119, 125n.11 Pendakur, K. 41, 48n.6 Pendaukur, R. 41, 48n.6 Perak (Malaysia) 153 PERNAS 156 Perwaja 157 Petterson, S.M. 52 phenotype 2, 4, 5–9 physical anthropology 5–9 Piore, M. 75 planning 115, 154–5, 171–2 Platteau, J–Ph. 119, 125n.11 Plaza Accords 170 PNB 156 Podberesky decision (USA) 88n.11 polytechnics 104 population growth 72, 118, 132 Poracaro, R.M. 15 poverty 73–5, 124–5n.5, 134–6, 154, 155, 156, 157–8, 161–2, 166, 167 Prairies, The 27 Prasad, S. 123 prejudice 116–17, 139 premarket factors 36, 53–7, 79, 121 pretos 15–25 Primary School Leaving Exam (Singapore) 102–3, 106–7, 110n.31 privatization 167, 171 proletarianization 124n.1 Proton 157 purchasing power parity 144, 149n.16 Queensland (Australia) 73, 88n.4 quotas 88n.8, 88n.10, 164–5, 168–9 race 5–9, 9–10, 14–25, 66–7, 71–80, 94–110, 152–73; coefficient technique 54; riots 108n.2 Race Reconciliation Council (Australia) 85 racial conflict see ethnic conflict “racial democracy” 8, 14 racial inequality see inter-group inequality racial theory of caste 6–9 racism 6, 56, 75–80, 125n.13 Ransom, M.R. 43 Rao, V. 119–20 Razak, T.A. 155–6 reconciliation process 2, 70–89
regional variation see geographic variations Reitz, J.G. 37, 38 religion 2, 4, 111 remedies for inter-group inequality 3, 10, 78–9, 96–101 Renong 171 reparations 81–4, 86, 144–5 reservations (India) 118 reservation wages 58 rice production 153 Risley, H.H. 8 Rodgers, W. 55, 56, 65 Rohlen, T.P. 140 Roosevelt, T. 24n.1 Rose, D.B. 88n.5 Rubber Industry Smallholders’ Development Authority (Malaysia) 156 rubber production 153, 156 Rwanda 1, 2, 3, 4, 5 Sabol, W. 76 Saggar, M. 123 Sakellarious, C.N. 36, 42 Salmond, A. 70 samurai 131 Sanders, W. 77 sanskritization 121, 125–6n.15 São Paolo 15–25 scheduled castes 114–15, 120, 121–2, 123, 124n.3 scheduled tribes 114, 122, 123, 124n.3 schooling 17–19, 52, 53–64, 71, 97, 101–7, 108n.17, 108n.18, 108–9n.19, 133, 134–6, 142–4, 145, 149n.7, 149n.12, 149n.14, 150n.20, 164–6 Scoville, J.A. 117–18, 199, 125n.10 Sealord purchase see Treaty of Waitangi second best, doctrine of 125n.8 Second Malaysia Plan 154, 155, 164–5 segregation 5, 11, 61–4, 100–1, 118, 130, 131, 133, 134, 138 self-help 96–9, 106–7, 108n.14, 139 Selvaratnam, V. 166 Seventh Malaysia Plan 163–4 Shannon, M. 48n.4 Shantakumar, P. 110n.32 Shapiro, B.M. 42, 48n.3, 48n.6, 48n.7 Sharma, S.S. 122 Sharp, N. 88n.6 Shinto period 131–2 Shogunate 130, 132 Shuheisha 133 Sikes, M.P. 78 Sikhism 117 Silva, N. 17, 25n.3 Singapore 1, 4, 10, 93–110 Singaporean censuses 94, 108n.8 Singapore Indian Development Association 99, 108n.18, 108–9n.19 Singapore Institute of Management 104 Singh, H. 121, 126n.16 Sixth Malaysia Plan 161–2 Skrentny, J.D. 169–70 Smith, D.E. 77 smoking 71 social capital 60–2 Socialist Party (Japan) 133 social mobility 120–3, 132, 145–8 social stratification 93–4, 95, 103, 124n.2, 152–4 Somucho see Japan Government Somucho
180
Index
South Africa 2, 3, 10, 88n.14 South African Truth and Reconciliation Commission 80 South America 4 South Asians 38–42, 78 South Pacific Islanders 82 Sowell, T. 174 Special Assistance Plan (Singapore) 104, 105 Special Measures Laws (Japan) 133, 142–6, 148, 150n.17 Spriggs, W. 55, 65 Sri Lanka 4 Srinivas, M.N. 125–6n.16 Srinivasan, T.N. 124 Stafford, G. 170 stagflation 65 State Secretary Incorporated (Malaysia) 167 statistical theory of discrimination 58, 115–17, 122 steel 157 Stelcner, M. 4, 9, 42, 43, 48n.3, 48n.6, 48n.7 stereotypes 95, 106 Stern, N. 120–1, 124–5n.5, 125n.10 Stewart, J. 68n.6 St. Jean, Y. 78 stolen children 82–4, 87 Storm, K. 70 Stratton, J. 96 Stratton, L. 58 Student Service Centers (Singapore) 108–9n.19 Subramanian, S. 122, 123, 124n.4 subsidies 142–5 subsidized housing 97, 99–101, 106, 109n.21, 109n.23, 109n.24, 109n.25 Sudras 114 Suhaini, A. 169 Su-Lan Reber, E. 134, 136, 137, 138, 145, 149n.5 Sundstrom, W.A. 58 Sweetman, A. 37 Swidinsky, R. 39, 48n.6 Tamils 106, 108n.11, 108n.13 Tamney, J.B. 95, 108n.9, 108n.13 Taylor, J. 76–7, 86, 89 Tendulkar, S. 124n.4 Terrell, D. 57 test scores 54–7, 102–3, 109n.28, 110n.31, 166 Third Malaysia Plan 155 Thomas, D. 55 Thorat, S.K. 122 Thottan, P. 124n.4 tin production 153–4 Todaro, M.P. 154 Tokugawa period 131–3, 138 Tomonaga, K. 136 Torres Strait Islanders 70–89 trachoma 71 transaction costs 115 Trautman, T.R. 6, 8 Treaty of Waitangi Settlement Act of 1992 88n.13 Tremawan, C. 108n.10, 109n.27, 110n.29, 110n.30 tribals 124n.3 Trinidad and Tobago 1, 3 Truman, H.S. 168 trusteeship 156 Tuition Loan Fund 105 Tutsis 2
Twine, F. 9 unemployment rates 58, 72–3, 153 Ungku, A.A. 166 United Malays National Organisation (Malaysia) 154 United Nations Development Program 9 United States of America 2, 3, 10, 52–67, 70, 77–9, 81, 101, 106, 107, 119, 125n.13, 144, 145, 169–70 Universities and Universities College Act of 1971 (Malaysia) 164 university education 103–5, 134–5, 164–5 University of California system 88n.18 University of Fine Arts (Japan) 137 University of Malaya 164 University of South Australia 71 unobserved heterogeneity 36, 55, 56 untouchables see Dalits Upham, F.K. 133, 134, 138, 139, 141, 142–3, 145, 149n.12 urbanization 73, 167 urban–rural dichotomy 157–8 US Civil Rights Commission (USA) 70 Uttar Pradesh 8, 120 Vaidyanathan, A. 124n.4 Vaillancourt, F. 48n.6 Vaisyas 7, 114, 120 varnas 6–9, 114 Vasil, R.K. 108n.11 Vedic texts 6 Vera, H. 78 Veum, J. 56, 63 Vietnam 170 violence 108n.12, 154 Viscusi, W.K. 75 “visible minorities” 4, 28–35 Vision 2020 161, 172 Wannell, T. 37 war 1 “WASPS” 78 wealth 66, 104, 155, 156, 158–9, 160–4, 172–3; redistribution 155, 156, 158–9, 160–4, 167, 172–3 welfare payments 134, 135 Western Europe 4 white privilege 10, 58–64, 75–80 whites 4, 10, 15–25, 28–48, 52–67, 75–86, 170 Wik decision (Australia) 78, 88n.6 Willett, J.B. 55 Winter, W. 85 Wood, C.H. 14, 15, 17 World Bank 124–5n.5, 144 World War II 27, 82 Yadava, R.C. 120 Yasuda, N. 167 Yata Middle School (Japan) 141, 149n.12 Yip, Y.H. 166 Yoku High School (Japan) 140 Young, M.L. 166 Zax, J.S. 64 Zendoyko 149n.14 Zimbabwe 1, 3 Zulus 78
