University of Wisconsin-Milwaukee
Employment and Training Institute

Brief Summary

The Labor Market Experience of Young African American Men from Low-Income Families in Wisconsin

by Harold M. Rose, Ronald S. Edari, Lois M. Quinn and John Pawasarat, Employment and Training Institute, University of Wisconsin-Milwaukee, November 1992

NOTE: THE FULL REPORT IS AVAILABLE IN PDF ONLINE:
Executive Summary | Harold Rose Perspective | Ronald Edari Perspective

Introduction

America's promise to its young people has traditionally been jobs--decent paying employment which offers the possibility of a home, a car, and the comforts of middle class living for a family. Wisconsin, and particularly Milwaukee, with its healthy manufacturing economy historically served as a magnet for workers and provided a comfortable environment in which to raise children. However, 1990 U.S. Census figures for Milwaukee suggest that this promise of jobs for young people seriously eroded during the last two decades of manufacturing decline and economic restructuring. By 1990 only half of City of Milwaukee youth ages 16 through 19 years of age who were not in school were employed. According to the Census, 17 percent of male and female out-of-school teens were unemployed, and nearly a third were not working, nor were they actively seeking employment.

Disparities in employment status were notable by race, with white high school graduates much more likely to be employed than African American graduates. For high school dropouts the employment rate for African American youth (24.5 percent) was half that for whites (52.3 percent). For both populations the number of youth not employed at the time of the U.S. Census was disturbingly high.

The type of work and level of wages available to young job applicants is also changing dramatically, particularly for young men entering the labor force. With the decline in manufacturing industries and the bifurcation of service jobs into low-wage jobs for unskilled workers and high-wage jobs for professional and technically-trained employees, fewer young men found employment to support themselves, let alone to contribute to the support of others. While the labor force of the last two decades expanded to include an influx of baby boomers and female entrants, service jobs represented much of the job growth of the period. In the 1980s many service jobs "suburbanized" outward from the central city, and City of Milwaukee residents showed a declining share of metropolitan area jobs in the often higher paying jobs in construction; finance, insurance and real estate; and government.

Employment challenges for young African American men entering the labor force were compounded by intense racial housing segregation, particularly in Milwaukee where over 80 percent of the 79,700 African American children under age eighteen live in a 25-square mile area of the 1,400 square mile SMSA, and by persistent racial discrimination in the labor market. Furthermore, by 1990, according to the U.S. Census, Wisconsin had the second highest poverty rate for African American children in the nation. In 1990 over half (56 percent) of African American children in Wisconsin under age 18 were growing up in poverty.

This research study provides empirical data on the employment experience of young African American men who entered the Wisconsin labor force in the late 1980s and early 1990s. Its goal was to examine the early labor force experience of young men from poor families.

Absent data on Wisconsin families living in poverty, the research used state income maintenance system files to identify all young men whose families had any contact with the welfare system, that is, where someone in the household (not necessarily the young African American male) had applied for or received food stamps, Aid to Families with Dependent Children (AFDC), or medical assistance at any time in 1987, 1988 or 1989. Using this broad net, a total of 7,456 Wisconsin young African American men and 5,863 Milwaukee male teens were identified.

In Milwaukee because of the large number of African American youth living in poverty, it is estimated that the study population includes over 85 percent of all African American males entering their early twenties and over 75 percent of African American male teenagers. The study population includes slightly less than half of African American youth from counties outside of Milwaukee. This report does not provide information on African American males from middle class families and should not be used to generalize about the total experience of young African American men.

To develop a data base of the employment activities of the study population, the Employment and Training Institute reviewed the quarterly employment records submitted by all covered employers in Wisconsin to the state Department of Industry, Labor and Human Relations. The researchers examined all 36,005 jobs held by males in the study population during a thirty-nine month period from January, 1988 through March, 1991. The research, financed by the University of Wisconsin-Milwaukee with support from the Milwaukee Foundation, tracked actual earnings, length of employment and type of employer over time for youth entering the labor force and explored the extent to which wages earned allowed young men to assume financial support for themselves or a family.

Because the data bases used did not provide information on the number of young men leaving Wisconsin, unemployment rates for the population have been estimated conservatively to include only those men whose wage records provided evidence that they had remained in Wisconsin. 1,661 young men born from 1966 through 1970 showed no earnings during the 39 months reviewed. These men are not included in the calculation of unemployment figures since data was not available to determine which men had remained in Wisconsin as permanently unemployed persons and which men may have relocated to other states. Also, state employment files do not include unreported, informal or illegal employment.

Findings

  1. Relatively low unemployment rates for Wisconsin mask deep and persistent pockets of unemployment among African American men from low income families. In Milwaukee the percentage of young African American workers who showed sustained unemployment for the entire three month period from January to March, 1990 was 41 percent, more than ten times the official Milwaukee area unemployment rate of 3.8 percent for March, 1990. When the U.S. Department of Labor's alternative measure for unemployment is calculated including discouraged workers plus one-half of the part-time labor force, the unemployment rate for young African American men in Milwaukee was estimated at 60 percent in First Quarter, 1990.
  2. Unemployment rates for young African American men in other Wisconsin urban counties were even higher than those shown for Milwaukee. Unemployment rates remained at Depression levels throughout the study period.
  3. The vast majority of African American men in their early twenties who were employed were relegated to marginal, low-wage jobs for the duration of the 39 month period studied with most of the jobs in retail trades and the service industries. In 1990 only 885 of the 8,421 jobs held by men in the study population paid a living wage, and only 386 jobs paid a family wage.


  4. Jobs Held by African-American Men in Their Twenties:Milwaukee County

  5. The largest sector employing young African American men was retail trade, which provided nearly 2,400 jobs in 1990. This included jobs in restaurants, bars, grocery stores, department stores and other retail outlets. Average annual wages paid in this sector ($2,023 in 1990) were third lowest -- after day labor and hotel, automotive and business services. Retail trade jobs showed very high turnover rates and a significant number of failed jobs. Only about a tenth of the retail trade jobs held in 1990 paid annual wages high enough to support an individual.
  6. Many men in the study population sought out day labor jobs, but these jobs averaged only $570 a year in wages. Within the service sectors twice as many men held jobs in the lower- paying hotel, automotive and business services (averaging a total of only $1,697 annual wages) than in the health, legal, education and social services (averaging $3,084 a year).
  7. Although manufacturing jobs comprised less than 15 percent of all jobs for young African American men, the manufacturing sector provided nearly half of the jobs (149 of 386 jobs) paying adequate wages to support a three-person family. Durable and non-durable manufacturing also showed the most jobs lasting year-round.
  8. Three major sectors of the Milwaukee economy provided fewer than three percent each of jobs for young African American men: construction; city, county, state and federal government; and the financial, insurance and real estate sector. In spite of an unprecedented level of public capital improvement projects during the last decade in the Milwaukee metropolitan area, only 14 young men from the study population had jobs with construction firms in 1990 that lasted year-round. The city, county, state and federal governments combined provided year-round jobs in 1990 to fewer than ten men from the study population.
  9. Jobs Held by African American Males in 1990
    (For Study Population Born from 1966 to 1970: Milwaukee County)
    Type of Industry Number of Jobs Percent Paying Family Wage Jobs Held All 4 Quarters Average Annual Wage
    Retail Trade 2,398 3% 314 $2,023
    Day Labor 2,225 ** 21 $570
    Services:
    Hotel,automotive,business
    1,376 2% 145 $1,697
    Services:
    Health,legal,educ.,social
    598 7% 111 $3,084
    Manufacturing:
    Non-Durable
    515 12% 110 $3,950
    Manufacturing:
    Durable
    361 23% 95 $5,822
    Wholesale Trade 298 5% 49 $3,374
    Transportation,
    Comm,Util.
    257 9% 59 $3,539
    Finance, Insurance,
    R.Estate
    89 16% 21 $5,008
    Construction 198 8% 14 $3,513
    Government (not schools) 53 ** ** $2,713
    TOTAL 8,421 5% 954 $2,130
    **Cell sizes are suppressed for values of less than 10. TOTAL includes miscellaneous industry codes not included above.

  10. . Many of the African American men in their twenties continued to compete with teenagers for low-paying retail trade jobs. When you men moved out of the retail trade sector, they were twice as likely to show increased employment in day labor and the lower-paying hotel, auto and business service sectors than in manufacturing. Even Milwaukee teenagers showed increased reliance on day labor jobs as they reached their older teen years.
  11. Given their concentration in the secondary labor market, jobs for young African American men fluctuated throughout the thirteen quarters. Employment dropped in the first quarter of each year, reflecting the high vulnerability of the population to seasonal changes in the economy and the dependency of the population on lower-paying retail and service jobs. In all quarters studied over 60 percent of the jobs did not pay enough to support a single person above poverty.
  12. African American teens from the Milwaukee Public Schools showed a high interest in working, with over 3,400 male teens employed while they attended school. However, most of the jobs held by in-school youth were of very short duration and paid low wages. The majority of jobs were in retail trade, mainly in food service. Governmental agencies, construction trades, utilities and financial institutions provided very few jobs for in-school male teens from low- income families in either the summer or during the school year.
  13. A review of the employment history of recent Milwaukee Public Schools students found graduates earning significantly higher wages than dropouts. Recent MPS graduates ages 20 to 22 years earned $6,136 in annual wages in 1990, compared with $3,435 for MPS dropouts. Only about 40 percent of employed graduates showed annual earnings high enough to support a single person above the poverty level, and 20 percent showed sufficient wages to support a three-person family.

Policy Recommendations

Discussions of unemployment and underemployment have typically centered on the assumed deficiencies of the population out of work. Policy makers in the employment and training area focus their efforts primarily on programs which offer job placement assistance, training and remedial education, assuming intervention and instruction as the solutions to underemployment. While these programs can provide valuable services to the unemployed, they do not create living wage jobs where these jobs do not exist. Without job creation, human capital strategies will have only limited impact in the current economy.

Restricted job opportunities are a major impediment preventing young African American males from making a successful transition to the labor force. The restructuring of the local economy during the last two decades resulted in the elimination of many industrial manufacturing jobs traditionally available to minority populations. Continued cut-backs and layoffs in the manufacturing sectors have reduced family-wage employment opportunities not only for minority males but for the population as a whole. Competition for the diminished number of better paying, low-skilled manufacturing jobs will continue to be intense. Retail trade and service firms in the Milwaukee metropolitan area have expanded the number of lower skilled jobs available to new entrants to the labor force, but may of these jobs do not offer hope of advancement beyond entry-level minimum wages.

As long as there is intense competition for limited number so jobs paying a family wage, the young African American male population may remain the surplus labor force with little hope of long-term employment. If private companies cannot provide enough jobs to meet the demand of workers, policy makers need to consider creating those jobs in programs modeled after the Civilian Conservation Corps of the 1930s. Given unemployment rates for young African American males far exceeding the levels of the Great Depression, employment and training programs should emphasize creation of long-term public employment opportunities which provide wages sufficient to support family as an essential component in any overall strategy for employment of minority youth and adults.

Employment strategies must also address the lack of successful prior work experience or acquisition of basic work maturity skills during the high school years. Even the high school diploma, while an important indicator of the attainment of work maturity skills and socially acceptable behavior, is no guarantee that a student is ready for full-time employment. Also, central city youth need a valid driver's license and auto maintenance skills if they are to access most suburban jobs. Many employers require possession of a valid driver's license as part of the application process and, according to employment program operators, a large number of young African American males do not have a driver's license, either because they never applied for the license or because their license was suspended.

At the present time the largest commitment of government job training money in the state is for the Aid to Families with Dependent Children JOBS programs. $40 to $50 million annually is targeted primarily to women on AFDC, and as a result fewer than 5 percent of the young African American male population obtain training through JOBS. Additional funds are available through the Job Training Partnership Act (JTPA), the primary federal source of employment training funds for the low-income population. However, 30 percent of JTPA funds are targeted to AFDC recipients and 60 percent are targeted to women. Fewer than 10 percent of the study population has been enrolled in JTPA programs. Current policies have resulted in women receiving a disproportionate share of training funds. Employment and job training efforts need to focus on the unemployed African American males not attached to welfare programs. Milwaukee's Project New Hope allows for subsidized employment and training opportunities for young men seeking decent paying jobs, without requiring AFDC as a condition for participation.

The policy recommendations presented here address the shortage of jobs providing career opportunities and the need for training programs for that portion of the population with serious barriers to employment. Early intervention and coordination with high school programs, expansion of successful programs, and involvement of employers in a guaranteed "jobs for graduates" program are some of the major recommendations.

  1. Expand Existing School-to-Work Programs

    High school cooperative education programs are designed to offer students the opportunity to work while they remain in school. School-supervised work sites provide an introduction to basic employment competencies while offering job specific learning experiences relating to a career track. Expansion of current efforts to include post-secondary certification or diploma programs could advance the type of apprenticeship programs currently envisioned by state officials. While co-op programs are often criticized because they target better students, the model has also proven effective with at-risk students and could be expanded for this population. Existing summer youth employment opportunities could be more closely tied to the co-op model so that students' transition to employment would include structured summer employment experiences earlier in high school.

    Many high schools have successfully recruited private employers to become active in local school initiatives. Early and continued involvement of employers in providing jobs for youth at the local high school level could provide necessary positive employment and the promise of entry-level jobs with career ladder opportunities. The current STEP-UP and HELP-UP programs are examples of the coordinated effort necessary to provide quality work experiences for in-school youth. Under these programs the City of Milwaukee's Youth Initiative Office, JTPA, Milwaukee Public Schools and community-based organizations have effectively joined forces to prepare 350 at-risk students for employment.

  2. Evening High School

    An evening high school with a vocational emphasis should be considered for the Milwaukee Public School population unlikely to graduate from high school and for teens who have dropped out of school. Students who are so far behind in credit attainment that it is unlikely they will graduate should be identified as early as possible for potential enrollment. An evening school program targeted to this population could have a special emphasis on teaching the employment and survival skills necessary for adulthood as well as offering vocational education training leading to a Vocational, Technical and Adult Education (VTAE) diploma or certificate. Hands- on skill training for entry-level jobs which have career opportunities should be a high priority. While a high school diploma may not be immediately realistic for this population, a vocational training credential from the VTAE system could provide a marketable certificate for students and an incentive to continue on to a degree program at the Milwaukee Area Technical College.

  3. Guaranteed Jobs for Graduates

    As a result of a City of Milwaukee and business initiative, recent high school graduates from low-income families are assured access to post-secondary education through the college scholarship offered college-bound students under the City's "Milwaukee Guarantee." However, for the new graduate seeking employment rather than further education, the Milwaukee employment picture is bleak, particularly for the young African American male. Offering the promise of a job to high school graduates had been considered by state and local policy makers but never successfully implemented. Such a policy would provide Milwaukee high school graduates who do not choose to go on to further education at a college or technical school with the opportunity to earn a living at private or public employment. Any graduate would be eligible for employment placements and additional training for up to one year after high school graduation. The public schools could in turn guarantee the skill level of their graduates to employers, so that if a student needed additional training or remediation after high school, the public school would continue providing instruction through the first year after graduation. Local government, business leaders and school officials would need to provide leadership on an ongoing basis to insure job opportunities for graduates and the cooperative programs necessary to assure both the graduate and employer of a quality employment experience which could lead to a long-term career opportunity. For those students unable to find private sector employment, public works jobs could be created through the city, county, public schools, and community-based organizations.

  4. Public Works Programs - Guaranteed Jobs for Dropouts Who Return to School or Job Training

    For those low-income, underemployed students not completing high school, employment prospects are very grim. Consistent work habits acquired through a combination of training and community work experience could offer the high school dropout a route into the regular labor force with the opportunity for completion of further training at the VTAE level.

    The Youth Conservation Corps model provides a valuable example of the type of training and community service which can result in meaningful subsidized employment. Young adults are provided with a wage for training and perform work on a variety of community service projects. This model is currently being used by three local program operators--the Wisconsin Conservation Corps, the Milwaukee Community Service Corps, and the Milwaukee Job Service Office. Similar employment opportunities have been created through neighborhood improvement projects funded with Community Development Act funds.

  5. Expanding Minority Employment Opportunity Through Use of City, County and State Subcontracting Provisions

    Current city legislation requires contractors to hire a significant portion of their work force from within the central city of Milwaukee and subsequently results in a higher percent of minority employee hires for capital improvement projects. This opening of employment opportunities to minorities through contractor requirements could be expanded to Milwaukee County and State of Wisconsin capital improvement projects in the metropolitan area. While construction jobs are often short-term engagements of specialized trades rather than long-term employment options, other contracts for longer-term services could provide a variety of entry- level jobs.

  6. Targeting Populations with Special Needs

    For those portions of the population with serious barriers to employment because of alcohol, drug abuse and/or criminal activity, longer-term training programs should be created which combine employment opportunities with social service intervention. Subsidized employment plus training and social services is an expensive combination of components to offer without substantial funding. The Community Relations-Social Development Commission's Minority Male Opportunity and Responsibility Project is an example of the type of intensive intervention necessary to address the issues facing this population.

  7. Existing Job Training Program - Increasing Job Retention and Earnings

    Existing job training programs have reached only a small portion of the population primarily through the Job Training Partnership Act program. Because JTPA offers no employment subsidy during training, training tends to be short-term. Consequently, JTPA programs show only a temporary benefit in increased earnings for enrollees which dissipates quickly and disappears completely one or two years after enrollment. The JTPA program could be improved by requiring continued follow-up employment service for up to one year after placement. This would shift the emphasis of performance-based contracting from short-term placement to accountability for long-term employment placement and long-term client intervention. Investment in longer-term skill training coupled with tryout employment could also provide the opportunity for training and earning at the same time.


The full report includes perspectives by Harold M. Rose (Professor of Geography and Urban Affairs) on "The Employment Status of Young Adult Black Males Residing in Poverty Households: Recent Milwaukee County Experience" and by Ronald S. Edari (Associate Professor of Sociology) on " The Labor Market Experiences of Young African American Males from Low-Income Households."
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