American Economic Association
Racial and Ethnic Economic Inequality: The International Record
Author(s): William Darity, Jr. and Jessica Gordon Nembhard
Source: The American Economic Review, Vol. 90, No. 2, Papers and Proceedings of the One
Hundred Twelfth Annual Meeting of the American Economic Association (May, 2000), pp.
308-311
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/117241
Accessed: 23-03-2018 12:54 UTC
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CROSS-NATIONAL COMPARISONS OF RACIAL AND ETHNIC
ECONOMIC INEQUALITYt
Racial and Ethnic Economic Inequality:
The International Record
By WILLIAM DARITY, JR. AND JESSICA GORDON NEMBHARD*
Undertaking a comparative inquiry across diverse
countries enables us to isolate previously
unremarked consistencies and to refute several
pieces of conventional wisdom about the nature
of intergroup disparity. We find that economic
disparity correlated with race and ethnicity is
present and looks remarkably similar across a
wide range of nations. Enduring employment
discrimination against comparatively marginalized
groups is universal. Higher rates of economic
growth do not correspond neatly with
reduced intergroup disparity across the countries.
In addition, subaltern groups frequently
are numerical minorities, but in some cases,
they constitute a majority or plurality of the
population.
Our working paper (see Darity and Nembhard,
2000) identifies 12 countries where we
could find data of a reasonable quality that
measure the gap between economically subaltern
and dominant groups: Australia, Belize,
Brazil, Canada, India, Israel, Japan, Malaysia,
New Zealand, South Africa, Trinidad and Tobago,
and the United States. As our data demonstrate,
pronounced intergroup inequality
occurs in countries with both large populations
(India, United States, Brazil, and Japan) and
small populations (Belize, Trinidad and Tobago,
Israel, and New Zealand). It occurs in
higher-income countries (Australia, Canada, Japan,
and the United States), as well as in lowerincome
countries (India, Belize, and South
Africa); and in countries with high growth rates
(Malaysia, Japan, Belize, and India), as well as
in countries with low or negative growth rates
(South Africa and New Zealand). Finally, pronounced
intergroup inequality is apparent in
countries with high levels of general inequality
(Brazil, South Africa, and Malaysia), as well as
in countries with low levels of general inequality
(Canada, India, Australia, and Israel) (World
Bank, 2000). Here, we provide summary statistics
on the relative income or earnings status of
the subaltern groups relative to the dominant
group or relative to a national average for five of
the countries: Malaysia, India, Belize, New
Zealand, and South Africa.
l. Malaysia
Malaysia had the highest rate of growth for
the 12 countries under study between 1975 and
1994, 4.6 percent. Malay/Chinese monthly income
ratios for males range from 0.46 in 1957-
1958 to a high of 0.57 in 1984 (the lowest ratio
was 0.44 in 1970). Indian/Chinese ratios ralnged
from 0.80 in 1957-1958 to 0.81 in 1984 (lowest
in 1967-1968, at 0274) (see Jomo Sundaram and
Ishak Shari, 1985; Faridah Jamaludin, 1998).
The first phase of Malaysian affirmative action
directed specifically at the native Malay or
bumi spanned the period 1971-1990, under the
New Economic Policy (NEP). The 1984 statistics
suggest that the combination of rapid
growth and the NEP improved the comparative
economic status of the bumi. However, data
from retrospective work histories available in
the Second Malaysian Family Life Survey
(MFLS2) completed in 1989 indicate the opposite
pattern: a widening gap in male earnings,
with Malay men falling sharply behind Chinese
men and slightly behind Indian men (John Luke
t Discussants: Samuel Myers, Jr., University of Minnesota;
Rhonda Williams, University of Maryland; Kevin
Lang, Boston University.
* Darity: Department of Economics, University of North
Carolina, Chapel Hill, NC 27599-3305, and Duke University;
Nembhard: Institute for Urban Research, Morgan State
University, Baltimore, MD 21251.
308
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VOL. 90 NO. 2 COMPARISONS OF RACIAL AND ETHNIC ECONOMIC INEQUALITY 309
Gallup, 1997). The bumi experience privatesector
discrimination even though they are a
majority in the civil service and have political
power.
The NEP's affirmative-action provisions also
included an internal redistribution of assets. During
the period from 1970 to 1990, the bumi share
of corporate ownership increased from 2 percent
to 20 percent. The Chinese share rose slightly, and
the foreign-ownership share decreased. A recent
article (Economist, 1999) suggests that the effect
of the wealth distribution has been to consolidate
the economic clout of an elite group of Malays
and to reinforce ethnic polarization.
II. India
India, with a growth rate of 3.0 percent
(1975-1994), has been practicing affirmative
action for half a century on behalf of the Scheduled
Castes (SC's, primarily the Dalits, who,
prior to independence, officially constituted India's
"untouchables"). Estimates, gleaned from
the National Sample Survey, of the per capita
consumption expenditure ratio of SC/others are
0.78 in 1983-1984 and 0.79 in 1987-1988 in
rural areas, and 0.78 and 0.72, respectively, in
urban areas (see D. Javaraj and S. Subramanian,
1994; Sukhadeo Thorat, 1997). These two data
points are only four years apart and do not
suggest any upward movement in the relative
consumption expenditure of the SC's relative to
the rest of the population. The "other" category
in this case consists of all persons who are not
members of either the SC's or Scheduled Tribes
(ST's). Hence, the SC/other ratio grossly underestimates
the gap between SC's and upper-caste
Hindus, since the "other" category also includes
persons who are not eligible for affirmative
action but come from caste groups with low
status and income (also see Ashwini Deshpande,
2000).
The 1970 earnings data from the Delhi Fertility
Survey provide greater detail on caste and religious
affiliation and better demonstrate the point.
While the SC's clearly have the most deprived
relative status vis-'a-vis the Hindu Brahmins, the
low- and middle-caste Hindus and the Muslims all
had earnings close to half of the Brahmin level.
According to Autar Dhesi and Harbhajan Singh
(1989), in 1970 the earnings ratios by castereligious
status in Delhi for males were: Muslim/
Hindu Brahmin, 0.53; Sikh/Hindu Brahmin,
0.87; Hindu SC/Hindu Brahmin, 0.39; Hindu
low-caste/Hindu Brahmin, 0.55; Hindu middlecaste/Hlindu
Brahmin, 0.53; and Hindu highcaste/Hlindu
Brahmin, 1.03.
III. Belize
Belize had a growth rate of 2.3 percent: between
1975 and 1994. Numerical majority-minority status
is somewhat ambiguous in Belize, which identifies
12 separate ethnic groups in its population.
The Creole (African ancestry mixed with European)
population has been historically the largest,
with the Mestizo (Spanish -mixed with AmerIndian
ancestry) population currently holding a
plurality. Earnings for whites, as well as Syrians,
Lebanese, and Chinese (who together comprise
less than 8 percent of the population) are significantly
higher than the earnings of the two largest
groups (similarly, in Trinidad and Tobago the
economically dominant groups make up less than
10 percent of the population).
According to rough estimates by Nembhard
(1999), in 1991 the ratios of Creole--to-white
median monthly income (from the employed
population) were 0.52 for men and 0.53 for
women. Comparable Mestizo-to-white ratios
were 0.38 (men) and 0.43 (women). The white
popula.tion (British descent and U.S. expatriates)
of Belize has continued its colonial position
of privilege over all ethnic groups: whites
command significantly higher median monthly
incomes than the other groups, dominate management
and professional occupations, and are
over-represented as legislators.
IV. New Zealand
New Zealand's growth rate was low during
the 1975-1994 period at 0.8 percent. E,stimates
indicate a slight decline in the Maori/non-Maori
household-income ratio. Indeed, Maori/nonMaori
family income was at parity in the early
1970's (Brian Easton, 1994); the gap has opened
and widened since then. The disproportionate impact
of slower growth on Maori employment
opportunities explains some of the widening,
as does the composition of Maori and nonMaori
incomes. Greater initial Maori poverty
led to a greater component of Maori incomes
coming from public support. With the adoption of
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310 AEA PAPERS AND PROCEEDINGS MAY 2000
"'economic restructuring" or austerity measu
social support was reduced drastically (Bany
Martin, 1995) cutting more sharply into Maori
than non-Maori family incomes.
As Ella Henry (1998 p. 5) observes, "Maori are
grossly over-represented in the most negative
statistics." The Maori unemployment rate for
the June quarter of 1998 was almost 20 percent
compared to the national rate of 7.7 percent. In
1926, more than 70 percent of Maori owned their
own homes, when less than 60 percent of nonMaori
owned their own homes. By 1996 more
than 70 percent of non-Maori owned their own
homes while only about 50 percent of Maori
did. Almost half of the current prison population
is Maori (Henry, 1998). Maori youth are suspended
and expelled from schools at twice the rate
of their presence in the school population (Ngata
Love, 1998). Both the imprisonment patterns and
the school-suspension patterns strongly parallel
the experiences of blacks in the United States
(Southern Changes, 1999).
V. South Africa
South Africa experienced a negative rate of
growth over the two decades from 1975 to 1994
(-0.6 percent), but the estimates suggest a sharp
upward movement in relative male incomes between
1980 and 1994 for the black majority and the
colored and Asian minorities. The sharpest rise,
however, is concentrated between 1991 and 1994,
the period when apartheid was being dismantled
rapidly. Black/white mean income ratios for males
were 0.13 in 1980, 0.16 in 1991, and 0.42 in 1994.
The colored/white ratios in the same years were 0.23,
0.23, and 0.47, respectively; and the Asian/white
ratios were 0.37, 0.43, and 0.63 (Donald Treiman et
al., 1996; Timothy Hinks, 1999).
Although the degree of estimated discrimination
appears to have decreased, the magnitude
remains quite high. Recent research on South
Africa provides significant evidence of persistent
labor-market discrimination against blacks,
even after accounting for the extremely low
levels of schooling imposed on the black population
(George Sherer, 2000).
VI. Evidence on Labor-Market Discrimination
Our findings also reveal persistent discrimination
in all 12 countries, particularly for men
of color. Although historic oppression may account
for many of the pre-market factors that
contribute to the persistent discrimination, we
find statistical evidence of labor-market discrimination
when such studies have been done
in Brazil, Israel, South Africa, India, Malaysia,
Trinidad and Tobago, and the United States (see
Darity, 1998; Darity and Nembhard, 2000). In
Canada, the only group that continuously faces
systematic discrimination is blacks (Morton
Stelcner and Nota Kyriazis, 1995).
The international record shows disparity
across nations and regions, between racial and
ethnic groups within countries, and within
groups in the same country. Subaltern racial and
ethnic populations, whether in the majority or
minority, suffer remarkably similar economic
outcomes across the globe. Institutional racism
and cultural discrimination affect subcultures
and different classes in multiple ways. In every
country, those who get the "short stick" con
tinue to face poor prospects for full economic
inclusion and justice.
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