Title VII of the 1964 Civil Rights Act sought to promote equality of opportunity by making employment discrimination illegal. Over the five decades since passage of the act, federal policy has directed considerable resources to its implementation. Yet wage differentials still prevail among racial and ethnic groups and between women and men. Advocacy groups and the media frequently point to these statistical wage gaps as evidence of discrimination and the need for new and more stringent legislation.

However, as economists June and Dave O’Neill argue in The Declining Importance of Race and Gender in the Labor Market (AEI Press), conventional wisdom regarding the scope of employment discrimination is badly misguided. Through empirical analysis, the authors find that the wage gaps invoked to support new antidiscrimination policies can be largely attributed to differences in work-related skills—not labor-market discrimination. Moreover, analysis of historical data reveals that race- and gender-based wage differentials have declined over the years, mainly due to the individual initiatives of women and minorities that increased their productivity and narrowed skill gaps. Notably, the black-white wage gap declined as much between 1940 and 1960—a period with almost no federal antidiscrimination policies—as it did between 1960 and 1980, an era marked by the passage of the Civil Rights Act and the expansion of federal policies.

The O’Neills also examine the two federal agencies tasked with enforcing antidiscrimination policy, raising questions about the effectiveness of their policies, particularly those that equate lack of proportional representation of minorities and women in an employer’s work force with discrimination. The authors highlight the irony of these agencies: the implementation of racial and gender preferences in hiring and promotion were specifically prohibited by Title VII. A review of civil rights litigation suggests that the courts have followed a similar line of thought, although a few recent cases suggest some rethinking of these issues.

The Declining Importance of Race and Gender in the Labor Market provides historical background and solid empirical analysis of a highly important and emotionally charged issue. It should play an important role in deliberation over the future direction of civil rights policy.