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ILLINOIS’
RACIAL EMPLOYMENT GAP IS DOUBLE U.S. AVERAGE
Illinois Policy Institute/
Orphe Divounguy
Gov. J.B. Pritzker announced his reelection
bid on July 19 with the key pillar of his campaign being his record on
“protecting the lives and livelihoods of the people of Illinois.” Look
at the “livelihoods” in Illinois, and that quickly looks like a poor
campaign decision.
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 In Illinois, college-educated Whites were 7.1% more likely to
be employed than similar Blacks – more than twice the national average.
While COVID-19 and the public health responses to the crisis
caused racial employment gaps to increase everywhere, the gap widened more in
Illinois when compared to Illinois’ border states and the rest of the country.
Job seekers’ education and other observable characteristics can explain little
of the employment differences between racial and ethnic groups.
Black workers face comparatively higher risk of job loss at the first sign of
economic weakness. As a result, a robust expansion has historically reduced
disparities. Unfortunately, Illinois’ economy has persistently underperformed
relative to the rest of the country. Even prior to the COVID-19 pandemic,
Illinois’ labor market under Pritzker suffered one of the worst first-year
performances of any elected governor in recent history. In the time since,
Illinois’ economy has continued to lag the rest of the nation, with both the
gaps between Illinois and other states widening and the gaps between groups of
Illinoisans continuing to widen.
COVID-19 exposed large racial disparities that existed well before the pandemic.
Although large employment and wage disparities exist between whites and Blacks,
they may not necessarily be tied to racist attitudes. Statistical discrimination
could arise from employers having little reliable information about Black
workers, but that could not explain why employment gaps for similar workers are
much larger in Illinois when compared to the rest of the country.
Despite consistent improvements over time, discrimination in the labor market
remains a problem in America today, especially among large employers. Research
shows while most employers barely discriminate, a few discriminate heavily. That
same research also shows while local demographics do not matter for
discriminatory hiring decisions, local sentiment does. Racial discrimination is
more severe in geographic locations with more prejudiced populations.
Although more competition will not completely eliminate discriminatory
practices, research shows more competitive markets mitigate discrimination. When
market competition for candidates is high, minority candidates fare better.
Sustained periods of economic strength also tend to reduce the rate of job loss
for Blacks leading to a reduction in the white-Black employment gap.
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While state-level anti-discrimination laws have had
a small positive impact on the earnings gap between whites and
Blacks, they have had no impact on the employment of Blacks relative
to whites. Instead, anti-discrimination policies can even increase
hiring discrimination. In the case of the 1950’s state level “fair
employment” laws, young Black men appeared to have fared
substantially worse relative to white counterparts in “fair
employment” when compared to young Black men in states with no such
laws. “Ban the box” policies that restrict employers from asking
about applicants’ criminal histories tend to cause employers to make
assumptions about applicants based on their race, leading to more
statistical discrimination.
 State government could
help by monitoring hiring outcomes, by providing information to
employers about the local workforce, by de-biasing interventions in
schools, by investing in struggling communities to narrow
productivity gaps, and by encouraging the use of technology for
screening job applicants’ resumes in order to help reduce the
expression of cognitive biases.
The fact that racial employment gaps were higher in Illinois
relative to the rest of the country even before COVID-19 may be an
indictment of Illinois government’s failure to prioritize racial
disparities as a problem while at times favoring policies that have
been shown to make the problem worse.
While criminal justice reform legislation – a large part of
Pritzker’s focus – has an immediate positive impact on labor supply,
Illinois continues to punish job creators. The punishment ranges
from corruption – which acts as a direct tax on investment – to the
lack of adequate public investments because of rising pension costs
despite yearly increases in the state’s overall tax burden.
Research shows corruption is also a factor that contributed to the
state’s pension crisis. Reducing corruption provides the largest
potential impact for welfare gain through its impact on the
allocation of government revenues. Although inflating pensions fails
to deliver value for taxpayers, a corrupt culture in Illinois makes
it easier for Illinois politicians to use pensions as rewards for
the campaign cash delivered by public employee unions.
By preserving the status quo – raising taxes to pay for pension debt
and new public sector union demands at the expense of Illinois’
current workforce needs – Pritzker has failed to improve the
condition of Illinois labor markets. With no apparent change in
public policy strategy on the horizon, Illinoisans can expect more
of the same should Pritzker win his reelection bid. |
