Treatment of Caucasian and African-American Applicants by

San Francisco Bay Area Employment Agencies;

Results of a Study Utilizing "Testers"

by Ana P. Nunes

and

Brad Seligman

The Testing Project

of

The Impact Fund

July 1999

This research was supported by grants from the Fight Back! Fund of the Vanguard Public Foundation, the Van Loben Sels Foundation, the San Francisco Foundation, and the support of Golden Gate University Law School. The Testing Project of The Impact Fund would also like to thank Marc Bendick, Jr., Ph.D. for his technical assistance and editorial input to this report.

© 1999 The Impact Fund.

Contact Information

The Impact Fund	The Testing Project

Brad Seligman, Executive Director	Ana P. Nunes, Project Coordinator

1604 Solano Avenue	536 Mission Street

Berkeley, CA 94707-2109	San Francisco, CA 94105-2968

510-528-7344	415-957-1418

Fax 510-528-0083	Fax 415-896-2450

email: impactfund@impactfund.org	email:apn @ impactfund.org

website:www.impactfund.org	website:www.impactfund.org

Board of Advisors

of The Testing Project

Marc Bendick, Jr., Bendick & Egan Economic Consultants, Inc.

Lauren Edelman, UC Berkeley

Lora Foo, Asian Law Caucus

Rose Fua, Equal Rights Advocates

Julian Gross, Attorney at Law

Michael Harris, Lawyers Committee for Civil Rights

Nancy Kenyon, Marin Fair Housing

Shauna Marshall, Hastings Civil Justice Clinic

Molly Martin, Tradeswoman

Bill McNeill, Employment Law Center

Beth Parker, Equal Rights Advocates

Marci Seville, Golden Gate University Women's Employment Rights Clinic

Hina Shah, Asian Law Caucus

Virginia Villegas, La Raza Centro Legal

Ted Wang, Chinese for Affirmative Action

Lisa Wanzor, Chinese for Affirmative Action

Treatment of Caucasian and African-American Applicants by

San Francisco Bay Area Employment Agencies;

Results of a Study Utilizing "Testers"

by Ana P. Nunes and Brad Seligman1

SUMMARY

The Testing Project of The Impact Fund utilized "testers" to study the impact of race on the prospect of securing an entry-level office position through an employment agency in the San Francisco Bay Area. Employment testing is a social science procedure that examines the treatment of matched job applicants of different ethnicity who present similar qualifications and interviewing styles to the same employer. In this study, three pairs of research assistants applied for temporary or permanent entry-level office work through employment agencies. The three pairs of research assistants were comparable in all respects except the variable being studied: race. Each team was composed of one Caucasian and one African American research assistant.

Eight of the seventeen agencies studied (47%) were observed to favor the Caucasian applicant a majority of the time (7 of these agencies favored the Caucasian applicant in every test). Only four of the agencies (23.5%) consistently showed no preference for the Caucasian applicant. When all tests are examined, the Caucasian applicant was preferred 56% of the time, while the African American applicant was preferred only 18% of the time. The balance of the tests showed no clear preference. A "net rate" of adverse treatment of African Americans (tests showing Caucasian preference minus tests showing an African-American preference divided by total tests) yields an adverse treatment rate of 38%.

TESTING

Matched pair testing has long been used in both the social sciences and in the struggle for civil rights. Sociologists and psychologists often conduct empirical studies where they attempt to control all variables except for the one they are studying. The use of testers is now commonplace in the field of housing discrimination, and has been endorsed by the United States Equal Employment Opportunity Commission2, and utilized by the Departments of Justice and Housing and Urban Development as an appropriate research and civil rights investigative tool. In order to provide reliable data, research assistants (the "testers") must be carefully selected and matched with similar research assistants (who possess similar interviewing styles and demeanor), then trained to increase their already present similarities. Paper credentials should be comparable in every respect. The goal is to present two applicants who are similar in every respect except for their race. Then, if the two research assistants are treated differently, it is reasonable to attribute that difference in treatment to the variable that is being tested: race.

THE TESTING PROJECT

The Testing Project was established by The Impact Fund, a nonprofit foundation, in 1998 to conduct objective research concerning the prevalence of discrimination. The Project is coordinated by an experienced testing coordinator, who previously coordinated fair housing tests. The Project has an Advisory Board that approves research projects and general policies. Members of the Board include clinical law professors, civil rights lawyers, and social scientists. The Board determined that The Testing Project study the impact of race in the employment agency industry.

INDUSTRY TESTED

The employment agency industry was chosen as the focus of this study for several reasons. First, it is an important and rapidly growing segment of the labor market. According to the Bureau of Labor Statistics, the portion of the U.S. workforce employed by temporary agencies rose from 0.5 percent in 1982 to 2.2 percent in 1997. Nationwide, staffing companies employ 2.9 million people each day.3 Not only do employment agencies offer gainful employment to many individuals, they are also often the bridge to permanent employment. The ability of employers to "test run" an employee is attractive in busy offices where there is little time to screen applicants.

Earlier studies in Washington D.C. and Chicago found a higher than average level of disparate treatment of African-American applicants in such agencies as compared to other sectors of the labor market. The Fair Employment Council of Washington, D.C. found that its African-American research assistants encountered less favorable treatment than their white testing partners 66.7% of the time,4 while the average rate of disparate treatment found in other industries was 24%.5 These earlier studies were conducted during less than favorable economic conditions. The average unemployment rate in San Francisco while this study was taking place was 3.24%.6 The Testing Project was interested in seeing what effect a stronger labor market might have on the treatment of minority applicants.

The Testing Project initially identified agencies in the San Francisco Bay Area by using the National Association of Temporary and Staffing Services lists, local newspapers, and the yellow pages. The project sought to identify agencies which specialized in entry-level type office work and that appeared to have a large employee base. Base line research assistants — individuals that were not paired with other testers — were then used to confirm that the agencies specialized in entry-level work and to identify their procedures and requirements. Ultimately, 17 agencies were selected from downtown San Francisco and Oakland.

SELECTION AND TRAINING OF RESEARCH ASSISTANTS

This study employed three pairs of research assistants — two female pairs and one male pair. Each pair consisted of one African-American individual and one Caucasian individual. The selection of the pairs was laborious. Ninety-three job applicants were screened to finally produce the six research assistants used in this study. Each pair was matched with regard to gender, age, level of articulateness, and general manner. In addition, the pairs selected demonstrated a high level of observational skills, general professionalism, and punctuality.

Once matched, the research assistants participated in a three-day training process. The training focused on four main topics:

1.	Skills necessary to be effective interviewees

The research assistants were taught effective interview techniques and then given the opportunity to practice those techniques in many mock interviews. Test partners watched each other interview and were instructed to take note of their partner's demeanor and style of interviewing. They were instructed to parallel each other's styles of interviewing in subsequent mock interviews. The assistants were critiqued and coached after each interview as to how to improve their interviewing skills as well as to ensure that the testing pairs presented themselves in comparable fashions. The assistants were also instructed to dress appropriately for interviews, and comparably to each other.

2.	Basic information regarding the industry they would be testing

The research assistants were told of the typical application process at the employment agencies. This process usually included the completion of a standard application form, a typing test, various software application tests, and basic skills tests such as spelling and grammar tests. Occasionally, a personality test would also be administered. The Project Coordinator instructed the assistants on how to perform on all these tests so as to keep their scores comparable.

3.	Development of biographies and resumes

The research assistants were aided by the Project Coordinator in the development of biographies and resumes that presented comparable qualifications and backgrounds. The research assistants' resumes described them as possessing approximately two years of college education and comparable office work experience. Other necessary office skills, such as typing speed and computer literacy, were also emphasized. Each tester team's credentials were nearly identical with only slight variations so as not to arouse the employers' suspicions. The African-American assistants' credentials also reflected slightly more work experience than their Caucasian test partners. The research assistants in reality were two recent law school graduates, two college graduates, and two students with two years of college experience.

4.	Testing procedures

The research assistants were trained and instructed on the process of testing. They were instructed to follow the Project Coordinator's directions and that all communication between the research assistant and the employer was to be described to the Project Coordinator as soon after the communication took place as possible. Detailed written report forms were to be completed by the research assistants as soon as possible after each activity took place. The assistants were also instructed not to accept any job offer.

METHODOLOGY

The Project Coordinator instructed the research assistants as to which employment agencies they were to apply for work. The research assistants were instructed to apply for entry-level office positions at each employment agency.

The research assistants' initial contact with the employer was by phone, at which time they attempted to schedule interviews. The African-American research assistants scheduled their appointments prior to those of the Caucasian research assistants. Each pair of research assistants interviewed at each agency on the same day and within a few hours of each other.

The research assistants were trained to complete a detailed reporting form for each interaction with the employer. In addition, the research assistants were required to contact the Project Coordinator at each stage of their interaction with the employer. All telephone calls from employers to the research assistants were received by the phone bank maintained at The Testing Project office. The research assistants were also given references to furnish to the employment agencies which requested references.

DOCUMENTATION

The research assistants completed Test Report Forms after each test, documenting their experiences from the time they arrived at the employment agency until they left. Follow- up calls, correspondence, and all other communication between the employer and research assistants were documented by the research assistants or the Project Coordinator. Voice mail messages left by employers (including reference checks) were transcribed by the Project Coordinator; phone calls made by the research assistants to the employers were documented by the research assistants.

RESULTS

Seventeen employment agencies were tested twice using one male pair of research assistants and one pair of female research assistants. Those agencies where two tests demonstrated a consistent preference for the Caucasian applicant or no preference for the Caucasian applicant were not tested again. The remaining eleven agencies were tested a third time by a female pair of research assistants. In all, 45 tests were conducted.

Each test result was examined by the Testing Coordinator for substantive differences in treatment and was categorized as either showing preference for either the Caucasian or African American applicant, or no clear preference. Generally, a preference was found where a research assistant was offered a better paying, more responsible, or longer term position than his/her test partner; was offered a position earlier than his/her test partner; where an assistant was substantially more encouraged in the hiring process than his/her test partner; or where lesser qualification standards were applied to one assistant (i.e. less tests or reference checks). No clear preference was found where all favors and procedures were equally applied or where there were conflicting differences in treatment that did not suggest consistent treatment of one applicant over another. Summaries of each test, and how they were characterized are attached as an appendix to this report.7

Examples of test results showing a preference for the Caucasian applicant follow:

Employment Agency #8 — Test 1

Caucasian offered a position immediately; African-American never offered a position.

The Caucasian applicant was offered a position which started at $10 per hour as a temporary position and would then transition into a permanent position paying $26,000 per year plus benefits. In contrast, the African-
American applicant was told she would need to polish her MS Excel skills to make her truly employable, and that she should sign up with other employment agencies, to ensure she would find work, and was never offered a job.

Employment Agency #1 — Test 1

African-American put through "more hoops"; offered lower paying job than
Caucasian test partner.

The Caucasian applicant was not tested nor was a reference checked. She was offered a temporary position as a receptionist at the temporary agency for two to three months with a salary of $10.50 per hour. The African-American applicant was tested on various software applications and had one of her references checked. She was offered a $10 per hour receptionist position.

Employment Agency #1 — Test 2

African-American told to "come back next week" — offered lower paying job.

The Caucasian applicant dropped by during walk-in hours and was tested and offered a position paying $9.75 per hour. The African-American applicant called Employment Agency #1 and was told that the agency had walk-in hours. The applicant arrived at the agency during walk-in hours and completed an application, but was informed that he would need to make an appointment for the following week to be interviewed and tested. The applicant returned seven days later and was offered a position making follow-up calls for an insurance company which paid $8 per hour.

Overall, the data may be summarized in the following statistics:

SUMMARY OF RESULTS

(17 Agencies/45 Tests)
13 out of 17 agencies tested were observed preferring the Caucasian applicant one or more times.	of agencies tested
7 out of 17 agencies preferred the Caucasian applicant every time.	41% of agencies tested
8 out of 17 agencies preferred the Caucasian the majority of the time.	47% of agencies tested
25 out of 45 tests showed preference for the Caucasian applicant.	56% of all tests
8 out of 45 tests showed a preference for the African- American applicant.	of all tests
"Net" Rate of Differential Treatment of African American Applicants (white preference tests minus black preference tests divided by total tests).	38%

This study suggests, that even in a strong labor market where one would expect to find

little to no differential treatment, applicants are still treated differently on the basis of their race. The nature of the differences in treatment, however, may have been affected by the abundance of positions the employment agencies were attempting to fill. With one exception, all the testers were granted an interview and allowed to go through the entire application process. The differences primarily appeared in the quality and pay of actual job offers and the time which elapsed before being offered a position.

CONCLUSION

The test results show a clear pattern of preference in the employment agency industry of the San Francisco Bay Area for the Caucasian job applicants, despite the fact that the African-American applicants had similar qualifications and interviewing skills. The differences in treatment cannot be explained by any apparent objective factors other than the race of the applicants. These results are particularly startling given the virtual full employment economy of the area.

The rate of differential treatment found in this study is somewhat lower than the rate found in previous studies conducted in Chicago and Washington, D.C. (38% versus 66.7%). This difference may be attributed in whole or in part to the strong labor market and economy that the San Francisco Bay Area, as well as the rest of the nation, has been experiencing in the past year. The earlier studies were conducted in significantly looser labor markets. Differences in the legal climate and employer attitudes in the various geographic areas may also account for some of the difference in results.

The results lend support to the finding in the earlier studies that the employment placement industry has a higher incidence of differential treatment showing preference for Caucasian applicants than the average of other various industries (24%). There are a few possible reasons why this industry demonstrates a higher level of differential treatment. It may be that one of the services offered by employment agencies to their clients is to screen out "undesirables" as may be defined by the client.8 Poor training or personal bias of employment agency staff who conduct the interviews and have the power to assign jobs to the applicants may also offer an explanation for the prevalence of differential treatment in the hiring processes of employment agencies. The potential role of unconscious bias, particularly when screening a large number of applicants, cannot be discounted either.

A high level of disparate treatment of African-American applicants at the entry level of employment can have profound consequences over the course of a career, because the initial job, and its salary level often determine subsequent positions and levels of compensation. That much of this treatment may be invisible to an African-American applicant who has no knowledge of how Caucasian applicants are treated, does not erase the economic consequences of discrimination, which are magnified over time, as disparate career and salary paths are followed.

This report is the first major study of the treatment of Caucasian and African American applicants by employment agencies on the West Coast. It should serve as a "wake up call" to all employment agencies to examine their practices, employee training, and treatment of applicants of all races and other protected characteristics. It would be important to have follow up testing studies to examine whether this wake up call has been heeded.