The lasting impact of federal policy and discrimination on Black workers in the Louisville region

As we celebrate Black History Month and this year’s theme of African Americans and Labor, it’s important to call attention to the policies that limited Black workers’ access to quality employment in the past, and how the impact of those policies can still be seen in the unequal labor market outcomes across our region today.

Demonstrators on 4th street in downtown Louisville (Source: Courier Journal archives)

Jim Crow and the New Deal

The legacies of slavery and Jim Crow laws concentrated Black workers into low-quality agricultural, domestic, and service positions. These occupation groups were excluded from the Fair Labor Standards Act of 1938, which created worker protections such as the minimum wage, overtime pay, and the 40-hour work week. The same kind of work earns some of the lowest wages in the Kentuckiana region today.

Domestic and agricultural workers were also excluded from the Social Security Act of 1935, which not only created its namesake program, but also the unemployment insurance (UI) program. The COVID-19 pandemic highlighted the critical importance of the UI program to provide a financial cushion to workers who lose their jobs through no fault of their own. Research shows that access to UI benefits results in better matches between workers and available jobs, which in turn increases productivity. This is good for the individual worker, businesses, and the overall economy. But because the UI program excluded certain types of work, the Pandemic Unemployment Assistance program had to be quickly created to extend UI benefits to workers who did not qualify for traditional unemployment insurance. This temporary program ended just 18 months after it began. 

Career setbacks have been shown to be more common and more costly for Black workers. For example, a study from the San Diego Workforce Partnership found that Black Licensed Vocational Nurses (LVNs) are more than twice as likely to transition down the career ladder to Health Aide as to transition up the career ladder to a Registered Nurse (RN).

The occupational exclusions in New Deal legislation left Black workers with less access to economic opportunity and heightened financial insecurity. Other opportunities for wealth building enacted in the New Deal’s housing policies also largely left out Black Americans. Redlining Louisville: The History of Race, Class, and Real Estate details the history of discriminatory housing policies, redlining, and racially restrictive covenants in Louisville. Such policies led to the concentration of poverty in Black communities, limited access to quality housing and education, and the persistent racial wealth gap.

1937 redlining map of Louisville (Source: Louisville Magazine)

Bias and Occupational Segregation

Sixty years after the country began passing civil rights laws to address this past discrimination, workforce outcomes are still racially unequal. The unemployment rate for Black workers in the United States has been higher than the unemployment rate for white workers since this data was first recorded in 1972. Even in the tightest labor market ever recorded in 2023, Black workers had an unemployment rate 1.7 points higher than white workers.

Research shows that racial bias persists in the hiring process of workers. A groundbreaking field experiment where fictitious resumes were sent to employers found that resumes with white-sounding names, like Emily and Greg, received 50% more callbacks for interviews than identical resumes with Black-sounding names, like Lakisha and Jamal. The callback gap was found across occupations, industries, and employer size. Study after study continues to find the same pattern of racial bias during this critical stage of the employment process. Such results build upon the legally sanctioned race-based discrimination allowed by employers until the Civil Rights Act of 1964.

Research from the Urban Institute details how Getting a Good Job Depends More on Race and Gender than Education. For example, people working in food service and as electricians have comparable levels of educational attainment. But Black workers are vastly underrepresented in high-quality trades jobs, while overrepresented in low-quality service jobs. Data from the Equal Employment Opportunity Commission shows how the region’s Black workers are underrepresented in high-quality managerial, skilled trade, professional, and technical  positions, and are overrepresented in low-quality service and laborer positions.

Our Region’s Workforce Today

Within the Kentuckiana region, Black workers experience higher rates of unemployment at every level of educational attainment. Among the region’s employed workers, overall annual median earnings are 25% lower for Black workers as compared to white workers. Across every level of educational attainment, the typical Black worker earns less than the typical white worker.

The latest estimates from the Census Bureau show 17% of the Kentuckiana region’s population, more than 228,000 people, identify as Black or African American. It is clear that far too many of the region’s Black residents continue to face barriers to quality employment and economic security. This is why KentuckianaWorks is committed to promoting racial equity in the Louisville region. You can learn more about our mission and strategic priorities here.