Some Black Americans Turn To Informal Economy In The Face Of Discrimination

What happens when you're faced with a workforce that seems unwelcoming or even hostile? For people like Dennis Jackson, often the answer is to become your own boss.

In Los Angeles, he is making the best of an October heat wave by selling solar panels. Jackson says he has essentially always been an entrepreneur. He started in landscaping and moved toward solar panel installation.

The 40-year-old Detroit native says he chose those jobs because "there are not many black people in the industry. There's some black guys that are landscapers, and we look at each other as unicorns because there's not many of us."

Race and how we perceive it affects what happens in the workplace. A poll by NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health finds that a majority of African-Americans say they've experienced discrimination in hiring, pay and promotions.

There have only been a few brief times when Jackson has had a boss. He currently has a small operation — five employees and a few independent contractors. In many ways, he says, his entrepreneurial spirit has helped him avoid the glass ceiling.

"Discrimination, I try to avoid it at all cost," Jackson says. "I'm not going to have to go through that because I'm going to write my own ticket."

The poll found that 56 percent of African-Americans say they've experienced racial discrimination when applying for jobs and 57 percent say they've been discriminated against in being considered for promotions and in being paid equally.

Discrimination can deter African-Americans and other minorities from applying for certain jobs, says Marc Morial, a former mayor of New Orleans and current head of the National Urban League. Morial says the word gets out informally about certain industries and companies: "I'm not going to go over there and apply for a job because I heard they don't like blacks."

The employment picture overall and for black men has improved greatly since the Great Recession. But while the unemployment rate has plummeted for black men over 20, that number is still almost twice the rate of white men the same age. What's hidden in the numbers is that many black men have fallen out of the workforce, Morial says. There is a menu of problems that lead to this. Race affects networking, education, mobility and access to information about jobs.

"The issue isn't really perception. It's reality," says Steven Pitts, the associate chair of the Center for Labor Research and Education at the University of California, Berkeley.

In response to discrimination in the workplace, black men look for alternatives. "It could be simply the hustling," Pitts says of the ways black men work around the traditional labor market. It's the worker who washes cars in the parking lot, or paints houses.

This informal — and growing — economy, Pitts says, is "not so much just the idea of on-the-corner drug stuff. It is a vast array of activity that simply isn't governed by traditional labor laws." He says the unemployment picture is made more complicated by the growth of independent contracting — in California, it represents 8.5 percent of the workforce.

Black men face real barriers to entering the formal workforce, Pitts says. Higher incarceration rates lead to criminal records, which he says can have the effect of keeping black men out of the formal economy. Many jobs require licenses, which are harder to obtain with a criminal record.

"Once you begin to screen out an entire sector of jobs that people can participate in ... people will begin to find alternatives that are more informal," whether they're legal or not, Pitts says.

He says there has been a shift overall in the economy, including for white workers. In the last 30 years or so, he says, informal economic activity has been rising. "The hustle" — vital to the survival of black men for centuries — is becoming more important to the nation as a whole, Pitts adds.

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