ECONOMIC

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whose owners or white workers have less discriminatory attitudes towardblacks will be likely to employ more blacks. These firms prosper if blacksreceive lower wages. When such firms expand, the demand for black workersincreases and the discriminatory differential declines.Competition may not be a fully effective weapon against discrimination,however, if prejudice is very widespread. The second factor, working withthe first, was a change in attitudes toward discrimination against blacks. Thisdevelopment improved the relative income and occupational status ofblacks by directly reducing labor market discrimination. It also facilitatedthe passage of the 1964 Civil Rights Act and other Federal and State legislationas well as court decisions prohibiting discrimination in wages andemployment. Such changes in the legal system made discrimination morecostly and therefore lessened it. The reduction in discrimination in housingand in public accommodations brought about increased contact betweenblacks and whites and presumably expanded the information sources andjob opportunities for blacks.Dead-End JobsThere is a widespread belief that, compared to white males, black malesare relegated to poorly paid, dead-end jobs—that is, jobs in which earningsare initially low and do not rise with experience. This view originated as aresult of examining the relation between age and income for white and blackmales at a moment in time (cross-section). For example, reading downthe columns of Table 39 indicates a substantial decline for older age groupsin the income of black males relative to white males. The appropriateprocedure for a study of life-cycle income, however, is to follow a group(cohort) as it ages, as is shown along the diagonals of Table 39. For eachTABLE 39.—Income of Negro males as percent of income of white males, by type of income and age,1949, 1959, and 1969[Percent]Annual income:25-34 years.35-44 years.45-54 years.55-64 years.Weekly income:25-34 years.35-44 years..45-54 years.55-64 years.Type of income by age group194919595748 46 456152 48 475752 49486157 5251196965 56 535167 5855 53Note.—Data for 1949 and 1959 relate to Negro and races other than white end therefore are not strictly comparablewith data for 1969 which relate to the Negro race only.Sources: Department of Commerce (Bureau of the Census) and Council of Economic Advisers.cohort, the ratio of black to white annual and weekly incomes either did notdecline at all with age from 1949 to 1969, or declined at an appreciablyslower rate than in the cross-section. Thus, experience appears to have a152
similar relative effect on the incomes of white and black males. Althoughsome black and some white males may be in dead-end jobs, this is not thesituation of the average black or white worker.Current DifferentialsAlthough the earnings differential between black and white females hasbecome quite small, the differential that still exists between the earnings ofblack and white males is substantial. It does narrow, however, when the comparisonis restricted to the States outside the South, and when differences inyears of schooling are taken into account (Table 40). A further narrowingof the differential occurs if the comparison is restricted to married men.There are large differences in marital status between blacks and whites.In March 1972, 78 percent of white males 20 years old and over weremarried and living with their wives, compared to 61 percent for blackmales. Among both white and black males, marital status is closely relatedto earnings, married men having higher earnings than those not currentlymarried. How the division of labor within the family affects the earnings ofmarried men and women is discussed at greater length in the next section.TABLE 40.—Earnings of Negroes as a percent of earnings of whites } for persons 25—64years of age, 1969[Percent]All personsMarried, spouse presentType of earnings by sex and regionAlllevelsof schoolingHighschoolgraduateCollegegraduateormoreAlllevelsof schoolingHighschoolgraduateCollegegraduateormoreEARNINGS OF MENAnnual earnings:All regionsSouthNorth and West*_605369686074716478615570616176(2)7279Hourly earnings:All regionsSouthNorth and West i676077736481797187686079766585(2)8193EARNINGS OF WOMENAnnual earnings:All regions . .809310488102108SouthNorth and West *6994801021051117510588112112108Hourly earnings:All regions89991199110795South. .. .North and West i82101761181281097611179128881071 Includes Northeast and North-central.2 Fewer than 50 persons in the sample.Note.—Education, region, marital status and age relate to 1970.Sources: Department of Commerce (Bureau of the Census) and Council of Economic Advisers.153
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ECONOMICTRANSMITTEDTO THE CONGRESSF
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CONTENTSPageECONOMIC REPORT OF THE
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ECONOMIC REPORT OF THE PRESIDENTTo
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of the inflation rate of 1973, and
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or permit incentives—including hi
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people of an easy time. Like our pa
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THE PRESIDENT:LETTER OF TRANSMITTAL
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CHAPTER 3. INFLATION CONTROL UNDER
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Page7. Unemployment Rates by Sex an
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Page53. Maximum Percent Change in E
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We have specific problems, too, asi
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This curtailment of supply does, of
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consumption we would not have chose
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outside the food and fuel sectors a
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about $14 billion from deficit to s
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8 percent, at annual rates. Continu
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A third method, which seems to have
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DEVELOPMENT OF LOW-COST ENERGY FOR
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would otherwise have been invested
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TRANSPORTATION REFORMLast year the
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constraints. Restrictions on entry
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In early 1974 the Commerce Departme
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Consumer SpendingConsumer expenditu
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Chart 1Changes in GNP, Real GNP, GN
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During the fourth quarter the downt
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A number of points may be noted abo
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income do not appear to have played
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Chart 2Changes in Real GNPPERCENTUN
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of essentially declining participat
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The unemployment rate for adult mal
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from job losers, the remainder of t
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to maintain a somewhat larger work
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Chart 3Changes in Selected Price Me
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TABLE 12.—Changes in selected pri
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production workers, and it is sensi
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the profits that companies report a
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Two measures of changes in income t
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About $8 billion of the growth in e
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effect of covered wage and employme
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Since these apparent stabilization
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MONETARY POLICY AND FINANCIAL MARKE
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lation requiring ceilings on all CD
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TABLE 19.—Offerings of new securi
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CHAPTER 3Inflation Control Under th
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(A more detailed presentation of th
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ate of advance in grocery store foo
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to the economy but also in the sens
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were imposed, limiting prices to th
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spurring of domestic inflation by e
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was more than twice as high in 1973
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Page 110 and 111: TABLE 26.—Behavior of items in co
Page 112 and 113: Chart 6Changes in RelatedWholesale
Page 114 and 115: and natural gas. A complex set of f
Page 116 and 117: CHAPTER 4Energy and AgricultureFOR
Page 118 and 119: al gas have contributed to the low
Page 120 and 121: TABLE 30*—Wholesale prices, all i
Page 122 and 123: tion sector, which in 1972 accounte
Page 124 and 125: United States on oil imports, OPEC
Page 126 and 127: of old oil and prices of imported a
Page 128 and 129: LONG-TERM PROSPECTSThe price of imp
Page 130 and 131: important that the higher costs be
Page 132 and 133: improving the environment. The fund
Page 134 and 135: pollutants into the atmosphere will
Page 136 and 137: of research and rapid mechanization
Page 138 and 139: lion in fiscal 1972. Actually the a
Page 140 and 141: a minimum income. Unless prices fal
Page 142 and 143: The Administration supports the exa
Page 144 and 145: and estimates of some of these effe
Page 146 and 147: Since families typically pool their
Page 148 and 149: ability were not perfectly correlat
Page 150 and 151: Farm wages and farm income received
Page 152 and 153: TABLE 37.—Average usual weekly ea
Page 154 and 155: Chart 9Real Incomes for Men in Diff
Page 156 and 157: ecause they have acquired more expe
Page 160 and 161: Several factors can be mentioned to
Page 162 and 163: y social pressures, however, which
Page 164 and 165: TABLE 42.—Relation of wage and sa
Page 166 and 167: ferences in their mix of occupation
Page 168 and 169: for public housing may be valued by
Page 170 and 171: 8 to 20 percent for black females.
Page 172 and 173: sufficiently high to cover the addi
Page 174 and 175: TABLE 45.—Federal Government tran
Page 176 and 177: given to the problems of poverty du
Page 178 and 179: TABLE 47.—Trends in the employmen
Page 180 and 181: enefit increases greater than the i
Page 182 and 183: (Table 45). Medicare is chiefly des
Page 184 and 185: Public assistance is specifically d
Page 186 and 187: Then, subtracting equation (4) from
Page 188 and 189: policies, and the tensions among co
Page 190 and 191: In the fourth quarter the dollar ro
Page 192 and 193: which include trade, grants and oth
Page 194 and 195: tarily by foreign central banks, ev
Page 196 and 197: ply of oil, and by domestic price c
Page 198 and 199: in the United States. In view of th
Page 200 and 201: TABLE 52.—U.S. balances on intern
Page 202 and 203: esult from changes in market value
Page 204 and 205: TABLE 54.—Major changes in capita
Page 206 and 207: attempt was made to agree on a code
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The official price of gold was rais
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system, these demand changes were a
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What Pressures Should Be Exerted on
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The composition of reserves among d
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prices of approximately the same or
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tained, they would probably be felt
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Reducing Nontariff BarriersIn order
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Structural problems. Agreements on
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arrangements which are designed to
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capital and the means of putting th
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Canada and four smaller countries u
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currencies have appreciated relativ
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Effective Changes in Other Currenci
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Activities of the Advisory Committe
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Appendix BREPORT TO THE PRESIDENT O
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Report to the President on the Acti
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govern the exploitation of the reso
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Manpower and Social Affairs Committ
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Junior Staff EconomistsJames S. Fac
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Appendix CSTATISTICAL TABLES RELATI
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PRODUCTION AND BUSINESS ACTIVITY:Pa
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NATIONAL INCOME OR EXPENDITURETABLE
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TABLE C-2.—Gross national product
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TABLE C-3.—Implicit price deflato
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TABLE C—8.—Gross national produ
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TABLE C-10.—Gross national produc
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TABLE C-12.—Personal consumption
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TABLE C-14.—Relation of gross nat
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TABLE C—16.—Relation of nationa
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TABLE C-18.— Total and per capita
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TABLE C-19.—Sources of personal i
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TABLE C-21.—Saving by individuals
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POPULATION, EMPLOYMENT, WAGES, ANDP
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TABLE C-24.—Noninstitutional popu
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TABLE C-26.— Selected unemploymen
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TABLE C—28.—Unemployment insura
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TABLE C-29.—Wage and salary worke
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TABLE C-31.—.•Average weekly ea
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TABLE C-33.—Changes in output per
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TABLE C—35.—Industrial producti
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TABLE C-37.—Capacity utilization
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TABLE C—38.—New construction ac
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TABLE C-39.—New housing starts an
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TABLE C-41.—Sales and inventories
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TABLE C-43.—Manvjacturers* new an
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TABLE O45.—Consumer price indexes
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TABLE C—47.—Consumer price inde
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TABLE C~49.—Wholesale price index
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TABLE C-50.—Wholesale price index
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194819491950.,1951195219531954Yearo
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TABLE C-53.—Commercial bank loans
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TABLE G-54.—Total funds raised in
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TABLE C-56.—Federal Reserve Bank
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TABLE C-58.—Bond yields and inter
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TABLE C-59.—Short- and intermedia
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TABLE C-61.—Mortgage debt outstan
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TABLE C-63.—Net public and privat
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TABLE C-65.—Federal budget receip
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TABLE C-66.—Relation of the Feder
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TABLE C-68.—Receipts and expendit
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TABLE C-10.—State and local gover
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TABLE C-72.—Estimated ownership o
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CORPORATE PROFITS AND FINANCETABLE
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TABLE C-76.—Relation of profits a
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TABLE C-77.—Sources and uses of f
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TABLE C-79.—State and municipal a
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TABLE C-81.—Business formation an
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Year1929...1933...1939...1940...194
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TABLE C-85.—Indexes of prices rec
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TABLE G-87.—Comparative balance s
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TABLE G-88.— U.S. balance of paym
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TABLE C-90.— U.S. merchandise exp
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TABLE C-92.—International reserve
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TABLE G-94.—International investm
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TABLE C-96.—Consumer price indexe
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ECONOMIC

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