Tape 47 - Black America and the economy

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-	Professor Paul Samuelson of MIT	0:02
	discusses the current economic scene.	0:04
	This program is produced	0:07
	for Instructional Dynamics Incorporated	0:08
	for the week of April 6th, 1970.	0:10
-	Today, I'd like to depart from a consideration	0:14
	of exactly what's happening to the business cycle,	0:17
	to the gross national product and discuss a problem	0:21
	of very great economic interest	0:25
	and also of a great deal of human interest.	0:28
	I'm referring to the problem of race and economics	0:32
	and in particular to the economics of the black population.	0:37
	This is, of course, a very popular topic.	0:43
	As I speak, I have before me the latest	0:47
	issue of Time Magazine, that's the April 6th.	0:51
	This is a special issue devoted almost exclusively	0:58
	in every one of the departments to the	1:02
	black America, 1970.	1:07
	Earlier, Newsweek had an issue devoted very largely	1:11
	to the problem of black America.	1:17
	This problem has its economic side,	1:22
	and I'd like to speak about that	1:25
	side of the problem.	1:30
	First question is this.	1:32
	Has the	1:35
	American	1:37
	Negro, American non-whites in general, this includes	1:39
	Puerto Ricans, includes Mexicans,	1:44
	first do they have a special problem?	1:47
	Hasn't it always been true that the	1:50
	second people to arrive	1:55
	were at a disadvantage relative to the first people.	1:57
	After the Pilgrims and Puritans,	2:00
	the people of Anglo-Saxon stock,	2:03
	had arrived on these shores,	2:06
	you had a considerable immigration of Germans.	2:09
	You can see this in towns like Cincinnati,	2:14
	you can see it in St. Louis, you can see it in Milwaukee.	2:17
	And, of course, the Germans were the	2:22
	hewers of wood and the drawers of water,	2:25
	and there was a certain amount	2:28
	of discrimination against them.	2:29
	You used to see signs in,	2:30
	let's say, Philadelphia a century ago.	2:33
	Dogs and Germans keep out.	2:38
	Then you had a another wave of migration.	2:41
	The potato famine in Ireland around 1845	2:44
	brought 100,000s and millions	2:49
	of Irish rural countrymen to this country.	2:52
	The Kennedy's, of course, and many others	2:57
	date back to that migration.	3:00
	Talking to you from Boston, I can, of course,	3:04
	recount the history of the Irish as a	3:08
	ethnic group who were discriminated against by the Yankees.	3:13
	Even a few decades ago,	3:17
	it was something out of order	3:21
	for a,	3:24
	an intelligent, young	3:25
	Irishman from the Greater Boston community	3:29
	to go to Harvard University.	3:31
	He was in a sense being a traitor to his group,	3:32
	and the last cardinal but one,	3:38
	in fact, discouraged that sort of a venture.	3:41
	Then came in the end of the 19th century	3:48
	the Scandinavian migration.	3:52
	If you read the novels of Sinclair Lewis,	3:55
	Main Street for example, you see that a Norski	3:58
	is an object of derision and of contempt.	4:02
	And the Anglo-Saxon folk	4:06
	of the small villages of the Minnesota and the Dakotas	4:10
	look down upon the Swedes and the Norwegians and the Danes	4:15
	in much the same way that the French Canadians	4:21
	are looked down upon, actually, often in Canada.	4:24
	I'm struck if I go to Ottawa, I won't speak of Montreal	4:30
	because that is almost completely French,	4:33
	the Province of Quebec, but if I go to Ottawa,	4:37
	which is on the borderline	4:40
	and I go in the high civil service	4:43
	and I meet the Head of the Central Bank	4:44
	and I meet the Head of the Treasury	4:46
	and I'm at a cocktail party that there are almost no	4:48
	French Canadians there.	4:52
	There are a few tokens of French Canadians.	4:54
	But if I stop at a restaurant,	4:57
	and I peek into the the kitchen to look	5:00
	to see who's doing the dishes there, that person	5:02
	if I hear him speak is almost certain to be speaking French.	5:05
	Then at the very turn of the century came the	5:11
	migration from Southern Europe and from Eastern Europe.	5:16
	The Ellis Island	5:20
	story of the melting pot	5:23
	of the immigrants who arrive and live	5:26
	under very poverty-stricken conditions, work in sweatshops,	5:29
	live in ghettos.	5:36
	But now, I'm telling the story as it used to be told,	5:39
	each of these ethnic groups, although discriminated against	5:43
	in the beginning, if you would only wait has turned out	5:46
	to be absorbed by American society.	5:50
	If I turn to the society pages of the Milwaukee Journal,	5:53
	all of the names of junior-league people,	5:58
	I shouldn't say all	6:00
	but a very great number of them are German.	6:01
	The Germans are not second-class citizens.	6:04
	If I look at the North End	6:08
	of Boston where there's a very large Italian population,	6:11
	somebody told me that in 1910	6:14
	it was the most densely populated area in the world.	6:16
	That's very hard for me to believe,	6:19
	but at least the story is well-told.	6:21
	According to this story, the grandparents lived there,	6:25
	but the children moved to Somerville and the grandchildren	6:29
	have moved to Lexington and to Concord.	6:32
	If we take the Jewish population,	6:35
	it has always been something of a myth	6:38
	that the Jew is extremely successful in business.	6:41
	If you look at the occupational statistics of	6:46
	1905,	6:51
	1915, you would find that a great number	6:53
	of the Jewish immigrants were working people,	6:57
	often unorganized but increasingly in unions.	7:00
	Well, time has gone by, and a lot of people who used to live	7:04
	on the Lower East Side of New York now live in Long Island,	7:09
	live in New Jersey, live in Westchester County.	7:13
	And, actually, I don't know how authoritative	7:16
	and complete the statistics are, but there is a suggestion	7:20
	that if you go by religious group	7:24
	the Jewish population may now	7:28
	have the highest median income,	7:30
	perhaps even more than the Episcopalians who have perhaps	7:33
	slightly higher incomes than the Presbyterians.	7:36
	And we work our way down through the Protestant Reformation	7:40
	until we get, no longer at the bottom	7:45
	but short of the bottom, the Catholic population.	7:48
	At the very bottom, you have the	7:53
	fundamentalist Protestant rural population,	7:58
	primarily from the South.	8:02
	Of course, at the bottom of that bottom	8:03
	is the Negro population.	8:06
	But why should Puerto Ricans and Negroes worry?	8:10
	There time is coming.	8:13
	They're going through the same transitional period	8:15
	that the Italians, the Jews, the Scandinavians,	8:17
	the Irish, and the Germans went through,	8:21
	and in a little time, they will be living in the suburbs	8:25
	and will have become integrated in the population.	8:28
	I think the story does not have a convincing ring about it	8:35
	because after all the black migration into this country	8:38
	is not of recent origin, and as a matter of fact	8:44
	and this is typical	8:47
	I forgot to mention I believe the American Indian.	8:49
	The American Indian can hardly be regarded	8:52
	as a recent Irishman who in a little time	8:54
	is going to turn into genuine Rotarian American.	8:56
	The American Indian has been here the longest	9:01
	and has certainly not	9:03
	become part of the mainstream of American economic life.	9:06
	So it would appear that the problem of the Puerto Rican,	9:10
	of the American black, of the American Indian,	9:16
	and in the south west and in the far west	9:21
	of the Spanish-speaking Mexican American,	9:25
	it is really something a little bit different.	9:30
	The time period has been too long for us to believe	9:34
	that the process is taking place automatically.	9:38
	So we have belatedly become very conscious of the problem.	9:42
	It started in politics in the Civil Rights Movement,	9:47
	but it has spread into the realm of economics.	9:52
	The question I'd like to discuss today is how important	9:56
	is this from the standpoint of the total economy?	10:01
	That's not the only way of looking at the problem,	10:06
	but it's an important way of looking at the problem.	10:07
	Will our racial	10:09
	disturbances in ferment have macroeconomic implications?	10:13
	I don't know the answer, but I suspect	10:20
	that the answer is in the negative.	10:22
	I know for the last half-dozen years or more,	10:26
	I have been looking at various bits of data	10:29
	to see what the Civil Right Movement	10:33
	will have done to the American economy.	10:37
	I used to do things like the following:	10:39
	I would watch, very carefully,	10:41
	the 12 Federal Reserve Districts in retail sales,	10:43
	and I suspected that when you were having sit-ins	10:47
	in department stores in the South	10:50
	that this would begin to show up in a retardation	10:52
	of the rate of growth of the Southern retail sales	10:56
	in the Atlanta District of the Federal Reserve System	10:59
	in comparison with say the Chicago or Minneapolis District.	11:01
	I have to report to you	11:07
	that I never could find such evidence.	11:07
	Even when the sit-ins were at their peak	11:10
	the Atlanta District,	11:15
	perhaps for quite other reasons, was showing	11:17
	about the most rapid rate of growth of retail sales.	11:21
	So I thought I just have to wait a little while longer,	11:25
	and it will begin to show up in the statistics.	11:28
	But don't hold your breath because I cannot yet report	11:32
	that the troubles in the street,	11:37
	the summer riots,	11:41
	unpleasantnesses	11:46
	have any great macroeconomic significance.	11:49
	One Teamster strike, one postal strike,	11:53
	one sustained railroad strike has a much more obvious effect	11:57
	upon the Federal Reserve Board Index of Production,	12:03
	upon the unemployment rate than any of these things,	12:06
	but that doesn't mean that the only way of looking	12:09
	at a thing to see whether it's important	12:11
	is what it's obvious effects are on upon the GNP.	12:13
	There are many other economic aspects	12:19
	of the problem that are of great interest.	12:22
	Now, the question I would like to ask is	12:25
	has the American Negro, American black	12:31
	been making great progress so that the time has come	12:36
	for, how did the man put it, the "benign neglect"	12:40
	of the problem knowing that the market system	12:45
	is spontaneously working wonders to solve the problem?	12:50
	The evidence on this is a little bit mixed.	13:00
	Of course, to be fair, the "benign neglect"	13:03
	may have had something to do only	13:09
	with the public relations, low-profile aspect	13:11
	that President Nixon was being advised to follow.	13:16
	I'm not interested	13:21
	primarily in politics.	13:24
	It is the case for reasons which needn't concern us today	13:29
	that	13:34
	the black community has been the community	13:36
	most faithful to the Democratic Party,	13:40
	when various ethnic groups from	13:43
	Middle and Eastern Europe	13:49
	have left the ranks of the Democratic Party as solid voters.	13:50
	The blacks have not moved over to the Republican Party.	13:57
	Indeed, a most recent poll showed	14:02
	that only 3% of the black community	14:06
	approves of President Nixon.	14:10
	9% voted for President Nixon more than a year ago,	14:15
	so 2/3 of the voters who voted for Nixon	14:19
	have become somewhat disillusioned with him.	14:26
	That tells us something about national sentiment,	14:31
	tells us something about the competition	14:34
	between the two parties, but it tells us very little	14:35
	about the economic condition of the black community,	14:39
	in terms of the white community.	14:43
	What is the usual mythology?	14:47
	I think the usual mythology is that the black community	14:50
	has been making great progress in recent years.	14:54
	We're 100 years from slavery, a little bit more,	14:58
	and Jim Crow intervened in a big way	15:02
	after the turn of the century,	15:05
	but gradually the American Negro has been gaining	15:07
	on the white population.	15:12
	That notion, I'm afraid, is a myth.	15:15
	What has always been known is that the black community	15:20
	suffered especially in recessions and depressions,	15:24
	and that the black community benefited especially	15:29
	in expansions and in prosperity periods.	15:33
	Indeed, and it makes one cynical,	15:37
	it has been great war periods which have been most important	15:40
	for recorded progress of the black income structure	15:46
	and employment and occupational structure,	15:51
	relative to the white.	15:54
	So that a few years after World War II,	15:56
	it was the case that	15:59
	unemployment among black youth, percentage wise, was lower,	16:02
	I repeat, was lower, percentage wise,	16:08
	than employment among white youths.	16:11
	You know now that that situation has changed.	16:15
	For many years now,	16:19
	really since 1953, the tide began to turn very rapidly	16:22
	against black youth relative to the population at large,	16:27
	and also relative to white youth	16:34
	as far as unemployment is concerned.	16:36
	It has been many times of that of the population at large,	16:39
	so there's no picture for me to report	16:45
	to you of steady, one-way progress.	16:46
	What there has been	16:50
	is the cyclical movement of the business cycle.	16:54
	From this viewpoint, the 1960s	16:58
	must be understood as part of the cyclical picture.	17:02
	Let me, however, summarize what the picture	17:08
	in the 1960s has been, and I think I can't do better	17:10
	than quoting directly to you	17:15
	from the remarks of Governor Andrew F. Brimmer,	17:19
	who was a member of the Board of Governors	17:23
	of the Federal Reserve System.	17:25
	This is from a speech which he made at Tuskegee Institute	17:28
	on Founders Day Convocation,	17:33
	that's in honor of Booker T. Washington.	17:35
	He made this speech on March 22nd, 1970.	17:38
	I should tell you that Andrew Brimmer	17:42
	is an excellent economist.	17:46
	He has a Harvard PhD degree.	17:49
	He has been a professor at some	17:55
	of our large and good universities.	17:58
	I should also add just because it carries some significance	18:03
	for him as a reporter	18:08
	that Doctor Brimmer happens to be black.	18:10
	I'm now quoting from an eminent black scholar	18:14
	in the field of economics,	18:20
	he says the same conclusion concerning the position	18:23
	of the non-white community in the 1960s	18:29
	can be summarized briefly, "One during the 1960s,	18:32
	"Negroes as a group did make significant economic progress.	18:37
	"This can be seen in terms of higher employment	18:42
	"and occupational upgrading as well as	18:44
	"in lower unemployment and a narrowing	18:47
	"of the income gap between Negroes and whites.	18:49
	"Two, however, beneath these overall improvements	18:53
	"another and disturbing trend is also evident.	18:57
	"Within the Negro community itself,	19:01
	"there appears to be a deepening schism	19:04
	"between the able and the less able,	19:07
	"between the well-prepared and those with few skills,	19:11
	"and some blacks might add,	19:15
	"and between the lucky and the unlucky.	19:19
	"Three, this deepening schism can be traced	19:24
	"in a number of ways, including the substantial rise	19:27
	"in the proportion of Negroes employed	19:30
	"in professional and technical jobs,	19:33
	"while the proportion in low-skilled occupations	19:37
	"also edges upward.	19:39
	"It can be traced in the sizeable decline in unemployment,	19:43
	"while the share of Negroes	19:47
	"among the long-term unemployed rises.	19:48
	"It can be traced in the persistence of inequality	19:54
	"and income distribution within the black community,	19:57
	"while a trend toward greater equality is evident	20:00
	"among white families.	20:03
	"This same trend towards greater equality is not evident	20:07
	among black families," according to Doctor Brimmer.	20:10
	"And above all," says Doctor Brimmer,	20:14
	"there's been a dramatic deterioration	20:17
	"in the position of Negro families headed by females."	20:19
	And so he concludes, "In my judgment, this deepening schism	20:24
	"within the black community should interest us	20:28
	"as much as the real progress	20:31
	"that has been made by Negroes as a group."	20:33
	Before going beyond this summary, I'd like to comment on it.	20:37
	It is not clear that this improvement that	20:43
	has been noted here is a longterm improvement.	20:48
	It may simply reflect the fact	20:52
	that during the the 1960s we have had the longest	20:54
	peacetime or wartime	20:59
	business cycle expansion without interruption by recession.	21:02
	We have had the most determined and militant activist,	21:09
	perhaps some of you may say fine-tuning effort	21:14
	by the Federal Reserve, excuse me, by the Federal Government	21:17
	to	21:21
	lead to high employment	21:24
	and as some would say to overfull employment.	21:27
	Much of this behavior in the 1960s may not be	21:30
	maintainable in the steady state.	21:36
	It certainly cannot easily be improved upon	21:39
	because part of the picture that I've been discussing	21:44
	of course we know has been at the expense of inflation.	21:48
	So, it may well be that we are now moving into a period	21:53
	in which we shall pay a number lean years	21:59
	to pay for the fat years, and in which it will be part	22:03
	of public policy to run a more austere economy	22:08
	with a slacker labor market.	22:13
	And precisely the advances of expansion	22:16
	to the black community	22:21
	may go in reverse,	22:24
	and we may be back to the previous situation.	22:27
	"I can summarize the situation pretty well,"	22:30
	I'm quoting or paraphrasing my colleague,	22:35
	Professor Lester Thurow of MIT who is an expert	22:39
	in these matters, and he puts it something like this,	22:43
	"Roughly speaking, the black community has 50% the income	22:46
	"of the white community in normal times,	22:51
	"and in very good times this 50% moves up towards 60%,	22:54
	"and very bad times it moves back to 50% again."	22:59
	So, we may have been in only part of this cycle.	23:02
	We've climbed up the hill,	23:07
	but it may not be to a new plateau.	23:08
	It may be a movement downward.	23:10
	Actually,	23:14
	Professor Thurow has to be qualified	23:16
	in one important respect.	23:18
	Doctor Grimmer points out that black families,	23:21
	particularly impoverished ones, have more children	23:24
	per family than do white ones.	23:28
	So, it's an overstatement to say	23:31
	that median per capita black income	23:33
	is between 50 and 60% of that of white.	23:36
	It is a good deal less than that.	23:39
	If we turn to female-headed families,	23:42
	it's more like 36% to 44%.	23:45
	Let me conclude by looking ahead to the future.	23:51
	I suspect that slow progress will be made,	23:56
	and I want to tell you one of the most	24:00
	optimistic aspects of the problem.	24:03
	When an economist analyzes, at whose expense the gains	24:05
	of the black population will come?	24:10
	He does not arrive at the conclusion	24:13
	that poor whites in the South and ethnic white groups	24:15
	in Gary, Indiana and in Cleveland have a lot to lose	24:19
	every time a black person improves his status.	24:23
	There isn't a thick	24:27

Item Info

Title:

Tape 47 - Black America and the economy

Date:

circa 1970

Contributor:

Samuelson, Paul A. (Paul Anthony), 1915-2009

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Paul A. Samuelson papers, 1933-2010 and undated

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Paul A. Samuelson papers, 1933-2010

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Economics Cassette Series: Paul Samuelson

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samuelsonpaul
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pstau001047
ark:/87924/r47d2qq1q
828fe65c-5144-4306-96e3-a5c19c8460b7

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Tape 47 - Black America and the economy

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