In a recent article in The Atlantic, Derek Thompson highlights what many of us already know—that the burden of recent unemployment falls harder on black and Latino workers than on whites, even though black women and Latino men are working more consistently than their white counterparts.
This is largely due to occupational segregation—the fact that certain racial groups cluster into certain jobs. While some jobs have become increasingly integrated over time, others are dominated by particular groups. As Thompson notes, Latinos make up almost half of farmworkers, blacks make up a third of home health aides, and Asians make up 60% of personal appearance workers. So when the economy sours, certain low-skill, low-income jobs are hit harder than others, and as a result, certain racial groups are hit harder than others
Thompson argues that a disparity in education explains these racial differences. But education is only part of the story. The real story lies elsewhere, in something called “network effects,” which Thompson only mentions in passing.
The old saying—“it’s not what you know but who you know”—matters quite a lot in explaining occupational segregation. Employers fill well over half of all jobs via personal word-of-mouth referrals, and certain jobs, including those listed above, are filled almost exclusively via insider referrals.
A person’s contacts pass along information about the job opening and then often vouch for the candidate to the prospective employer. But job referral networks tend to be racially and occupationally segregated for reasons owing mostly to the idea that birds of a feather flock together socially because they create natural and comfortable connections.
Unhappily, black and Latino job referral networks are more likely to include people who are employed in low-skill, low-income jobs like bus driving and farm work, owing to past discrimination. What’s more, these networks are self-reinforcing. That is, going forward, people who make use of those social networks are far more likely to be referred via word-of-mouth to the same kinds of jobs. So Latinos will continue to take up jobs as domestic workers, for example, because the people in their networks are already employed in those kinds of jobs.
Thompson thinks that the explanation for occupational segregation is less network effects and more education. But education itself is a function of self-reinforcing network effects, this time in our neighborhoods. Public schools get their funding from local property taxes, and, like social networks, those local neighborhoods are racially segregated, which means that poor black and Latino schools are underfunded and contain predominantly poor students with greater material needs. In turn, these schools produce students with fewer skills. And of course, over time, those students are more likely to work in low-wage, low-skill jobs, and to live in poor segregated neighborhoods with underfunded schools.
Thus, even if intentional discrimination were to end tomorrow, occupational segregation will continue indefinitely. Indeed, until we address the problem of network effects, the everyday processes that we take for granted—referring our friends for a job or choosing a neighborhood on the basis of public schools—will continue to reproduce racial inequality.
Daria Roithmayr is the George T. and Harriet E. Pfleger Professor of Law at the University of Southern California Gould School of Law. She is the author of Reproducing Racism: How Everyday Choices Lock in White Advantage (forthcoming from NYU Press, 2014).