Santa Clara University



A Pattern of Wage Discrimination :
Where and Why It Persisted in the Pre-Civil Rights South

William Sundstrom
Professor of Economics

U.S. Census figures show that in 1939 the median weekly earning of white men in the American South with less than a high school education was $17.50. For black workers, the figure was $9.62 — 38 cents a week less than the federal minimum wage, which didn’t apply to agricultural employees.

The existence of such a significant wage gap has been well known to economists, but William A. Sundstrom, professor of economics and associate provost for faculty development at Santa Clara University, has been digging deeper into the available information. His findings, “The Geography of Wage Discrimination in the Pre-Civil Rights South,” were published in the June 2007 issue of the Journal of Economic History.

Sundstrom concludes that the severity of such discrimination varied even within the region, but with certain factors being fairly consistent. “Ideology and culture mattered,” he writes. “Areas with a strong tradition of paternalistic and hierarchical race relations, as well as a potentially tight-knit white employing class, did exhibit greater wage discrimination.”

For the purpose of Sundstrom’s research, the mother lode of information was the 1940 U.S. Census — the first ever to report wage and income data. It enabled him to break down income figures by small sets of counties across the south, controlling for various factors known to affect wages, such as levels of education.

To get additional insight into racial attitudes, Sundstrom then used a county-by-county breakdown of the vote for Strom Thurmond in the presidential election of 1948, eight years later. Thurmond ran on an explicitly segregationist platform in protest of the Democratic party’s civil rights position that year, so the vote he received could be taken as an indication of the depth of that feeling in an area.

Wage discrimination, Sundstrom found, was generally worse in areas that had a strong plantation history, in areas where Thurmond did well in the 1948 election, and in areas where blacks made up a larger proportion of the work force. It primarily took the form of a division of labor that limited the kinds of jobs open to black workers.

“In plantation areas that had a lot of slave labor, there was a history of social pressure and collective enforcement of discrimination by white society,” he observes. “History matters.”

Free-market theorists would argue that in an open, unregulated marketplace, economic discrimination would eventually disappear as competitive employers tried to hire and keep the best employees. Yet in the South, that didn’t really begin to happen until the passage of federal civil rights laws (including employment discrimination laws) in the 1960s.

Instead, the discrimination persisted, abetted by historical traditions, local racial attitudes, and a large pool of available black workers. The latter consideration actually made some sort of market sense.

“According to the market theory of discrimination you would expect to see this,” Sundstrom says. “When there are more blacks in the labor pool, black workers are forced to seek jobs from the more bigoted white bosses, who pay them less.”

Sundstrom sees this paper as supplementing other research he has done on African-American labor market discrimination. He previously had looked at unemployment trends (blacks typically have double the unemployment of whites), but found that the wage discrimination issue continues to pose especially challenging questions for economists. By looking at detailed patterns, he hopes to shed light on why discrimination occurs and lasts.

“This is part of a set of literature that has convinced me that discrimination can persist in labor markets over time, contrary to free market views,” Sundstrom says. “That leaves a place for public policy , such as equal employment opportunity laws.”

It also raises new questions begging for further research. “If wage discrimination varied so dramatically and persistently across the South,” Sundstrom asks, “what prevented black workers from picking up and moving to locations where they were treated more favorably?”

Learn more

William Sundstrom Profile

The Geography of Wage Discrimination in the Pre-Civil Rights South
Journal of Economic History, Vol. 67
June 2007
SSRN Abstract # 1104058

The College Gender Gap in Comparative Perspective, 1950-2000
Working Paper
October 2004
SSRN Abstract # 1104051

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