Since at least the early 1980s, patterns of employment change in the Chicago metropolitan area have been characterized by polarized growth, geographically uneven development, and widening inequalities.
Through a series of recessions and recoveries, which saw deep job losses inmanufacturing industries and the rise of a sprawling service sector, the region’s economy has been transformed, to the detriment of many jobseekers. Racial polarization is evident in a range of economic indicators, including stark disparities in regional unemployment rates. Scarborough, Arenas, and Lewis note that “black unemployment has always been two to three times as much as white unemployment even in the best of times ... [, though from] 1990 through 2016, unemployment rates for black residents were around four times as high as unemployment rates among whites in Chicago.”Racial disparities in rates of joblessness are even greater for youth.
The problems residents face do not end once they find a job. The wage distribution of newly created jobs in the Chicago area since the 1980s has been U-shaped, with substantial gains in low-wage and high-wage jobs occurring alongside the stagnation of middle-wage jobs.How-ever, growth in so-called “entry-level jobs” at the bottom of the wage distribution has not been accompanied by increases in the wages of the lowest-paid workers.
To the contrary, in the 20 years following the end of the 1983 recession, workers in the bottom 25th percentile saw their inflation-adjusted wages decline, a problem that was even worse for those in the bottom 10th percentile.
As a result, according to Doussard, Peck and Theodore, "even though low-end, entry-level jobs have been one of the primary sources of employment growth during the previous quarter century, this 'rising tide' singularly failed to lift wages. To the contrary, a swelling population of workers — disproportionately, workers of color — has become 'trapped' in the increasingly crowded zone at the bottom of the labor market, where the terms of employment have deteriorated significantly. Nowhere have these changes been experienced with greater intensity than among Chicago’s African-American population. [...] The unemployment rate of less well educated African-American men, in particular, has fallen precipitously in central cities — and more sharply in Chicago than almost anywhere else in the country — in the period since the 1980s..., as an entire demographic group has been 'left behind' by a restructuring labor market."
It might be more accurate to say that entire neighborhoods have been left behind, though given the extreme levels of segregation in the Chicago area race and geography are closely entwined. Scarborough, Arenas, and Lewis write, “Due to the legacy of racial exclusion and dis-investment from black communities inChicago, the city’s black residents have been most impacted when the economy declines and the last to recover during periods of growth.”Inadequate access to employment opportunities is one of the most detrimental of these impacts.An indication of the vast disparities in job access, for example, is that transit riders living downtown or on the North Side can access as many as 700,000 jobs within a 30-minute commute, while residents living on the far South Side can access just 50,000 jobs.One of the enduring outcomes of the loss of well-paying manufacturing jobs, many of which had been located in or near Black communities, has been declining employment in neighborhood-serving retail and services industries as consumer spending has declined.
Many of those engaged in Chicago’s survival economies face a functional exclusion from jobs in the mainstream economy.
The source of this exclusion varies, and job-seekers’ employment histories are scarred by long-term spells of unemployment, engagement in “off the books” work, patterns of sporadic employment, and the mark of a felony record. Some who are active in the informal economy are coping with significant health problems, while others have disabilities that constrain their employability. Still others have caring responsibilities inside and outside the home.
To assess the employment prospects of participants in the informal economy, survey respondents were asked whether jobs providing a regular paycheck are available to them. Less than one in four (22%) indicated that jobs are available, 30 percent indicated that jobs are somewhat available, but nearly half — 48 percent — indicated that jobs are not available, even as the overall unemployment rate declined to historic lows. Furthermore, just 29 percent of respondents reported that in the past year they had worked for a company that paid them a regular paycheck. For many of these respondents, the paycheck was far from secure because they were employed in temporary jobs through day-labor staffing agencies.
The experiences of African-American and immigrant day laborers reveal how racial bias and discrimination intersect within in-formal construction labor markets. On the one hand, discriminatory judgments place workers like Charles near the back of hiring queues. Immigrant workers at informal hiring sites are the ones who are privileged, widely regarded as possessing needed skills and a superior work ethic.On the other hand, for immigrant day laborers, their “privileged” position brings its own perils. Although immigrant day laborers are widely acknowledged to be the favored day-labor workforce, they face low wages and extraordinarily high rates of nonpayment for work completed, with employers showing a willingness to exploit workers’ perceived or actual status as undocumented immigrants.The interlocking nature of racial bias, economic insecurity, and deportability (for undocumented immigrants)has produced informal labor markets that are distorted by workers’ vulnerabilities.
Only 29% of respondents reported having worked for a company that paid hem a regular check
Chicago’s temporary staffing industry
Racial bias and overt discrimination are also notoriously widespread in Chicago’s temporary staffing industry.Here too African American workers often find themselves at the back of the line, passed over by job dispatchers who en-gage in illegal practices, such as using code words to thinly disguise work site employers’ discriminatory preferences.Nevertheless, with few alternate routes into regular employment, many African-American jobseekers turn to temporary staffing agencies. Charles, Marcus, and Walter all have sought employment through temp agencies, as has Kevin, another interviewee who earns a living entirely through temporary and informal jobs. Each experienced discrimination, both in agencies’ hiring practices and on the shop floor. Each also spoke of the difficulties many temp workers face when trying to secure permanent employment.“Temp to hire is the big thing now,” Kevin notes, referencing how staffing agencies and worksite employers seek to ensure continuity of employment with the promise of a permanent job. In this sense, temp work is something of a misnomer, given the regularity with which many employers hire “temporary” workers. After90 days of consecutive employment permanent positions allegedly await.
However, as Kevin explains, despite the promise that “if you work out, we will hire you” ... “they’ll fire you on the eighty-ninth day....” Still, with few options, even in another wise booming economy, jobseekers continue to arrive at staffing agencies every morning with the hope of being dis-patched to a worksite. “They don’t have much choice,” Marcus says, because there simply are not enough employers who will hire these jobseekers. Within Chicago’s predominantly African-American neighborhoods an all too familiar cycle has been established.
High rates of joblessness result in spotty employment histories, which include working temporary jobs or being hired off the books. When the economy enters a downturn, this underemployment too often becomes unemployment, and one’s position in the labor market erodes further.
The longer someone is out of work, the more difficult it becomes to reenter the job market, and over time prolonged joblessness can become a de facto exclusion from employment, especially given that pervasive racial discrimination continues to impede access to employment opportunities for African Americans.It is no secret that some jobseekers eventually turn to illicit activities, such as participation in the drug trade or sex work. Some also lose their housing and then must contend with a host of other challenges. One way or another, many turn to the informal economy. But herein lies the rub. The compulsion to participate in Chicago’s survival economies may, over the long run, inadvertently exacerbate the disadvantages participants face. There is a danger that a lack of a verifiable work history will become an implicit justification for employers to disregard the informally employed when hiring, in the process obscuring systemic problems of racial discrimination and economic exclusion that continue to pervade the local economy. In such cases, informality becomes the primary survival strategy — the employment of last resort — even though low pay and earnings instability mean that incomes fall well below the poverty line.