The Complicated Business of Racial Segregation

“Don’t blame us. Our customers made us do it”

Photo: Library of Congress

Visitors to Atlanta can see a stark reminder of the Jim Crow era, when racial segregation in the United States was enforced by state and local laws and social mores. At the Fox Theatre, you can still walk up the three-storey staircase on the south side of the building to the “crow’s nest,” the cramped balcony where black patrons were allowed to sit after they bought tickets at a separate box office. A white wall partitions the balcony from the main section of the theatre.

This sorry era of segregation lasted from 1877 to the passage of the Civil Rights Act in 1964, and wasn’t limited to the Deep South. While the social history of segregation has been well told, the economic history still has chapters to be written.

Consider the question of how businesses responded to segregation. Restaurants, shops, and other businesses, for example, often excluded black patrons even in defiance of city ordinances banning segregation. What motivated their discrimination: were they acting out of their own beliefs or did they fear losing their white clientele?

To find out, researchers Ricard Gil (Queen’s University) and Justin Marion (University of California, Santa Cruz) conducted a series of studies that looked at the economic dynamics of movie theatre segregation in the 1950s. It was a time when explicit segregation was still common in southern states, with some theatres refusing to show movies with black actors in prominent roles.

In trying to tease out whether theatre owners or white audiences were driving discriminatory practices during that time, Gil and Marion focused on basic business principles. They figured that if business owners really wanted to discriminate against black movie goers — and thereby exclude a potential audience — they would do so knowing that they would sacrifice revenue. Therefore, when owners would be forced by law to desegregate, their profits would increase as more black movie goers patronized the theatres.

Alternatively, theatre owners may have preferred to desegregate but were constrained by the expectations of their white clientele. In that case, when theatres were desegregated, white customers would vote with their feet and the profit of theatre owners would go down.

The researchers hit on an inspired way to solve the puzzle.

Prior to 1953, segregation in Washington, D.C. was widely practised in movie theatres, restaurants, and other private businesses, but it was by the choice of the business owners rather than backed by law. In fact, anti-segregation laws were enacted by the local government in 1872 and 1873 but unenforced. In 1950, they became the basis of a legal challenge brought by a number of customers who were denied service at a local restaurant. The lack of enforcement was challenged — successfully — in the courts. The subsequent Supreme Court ruling in 1953 agreed the laws would have to be enforced.

This historical footnote gave Gil and Marion the opportunity to test their hypothesis. Since the ruling only applied to the District of Columbia, the researchers compared revenues at each movie theatre in Washington, D.C. before and after the Supreme Court ruling with revenues at theatres in 25 other cities. They figured that if theatre revenues in Washington dropped as a result of desegregation, it was likely because the owners were kowtowing to their white customers. If revenues grew, it would show that the owners were committed to segregation themselves, even at the cost of potential revenue.

Gil and Marion harvested data from Variety magazine; this trade journal published weekly information for each theatre on how much revenue was earned, what prices were charged, and which films were screened.

Studying the data, they found that revenues of Washington theatres fell by around 10 percent after desegregation relative to theatres in other cities showing similar movies. Twenty to 30 percent of white patrons choose not to go to these theatres after desegregation was enforced. The timing of the revenue response matched the date of the Supreme Court ruling.

The researchers also looked at the issue from another angle: the screening decisions made by theatre owners. They figured that if theatre owners were motivated to discriminate, they would be less likely to continue the run of a movie with a black cast member versus one featuring an all-white cast.

For movies shown during that time, they obtained information on the racial makeup of a film’s cast, including the importance of each actor’s role. They then cross-referenced that data with revenue information on each theatre as well as racial bias of each city in question (drawn from public opinion polls conducted in the late 1940s and 1950s and that contain respondents’ race, state of residence, and the response to questions related to racial attitudes).

The result: movies with black actors earned around 11 percent less revenue and were screened for fewer weeks in cities with greater racial bias.

Taken together, the conclusion is pretty clear. Customer discrimination played a central role in the practice of segregation.

Shut out of mainstream theatres, it is not surprising that a substantial number of theatres serving black customers opened during the latter years of segregation (keep in mind that it was much more difficult to obtain credit or city registration to start a business). In an earlier study, Gil and Marion showed that residential segregation led to more black theatres than expected given the size of the black population and the socioeconomic characteristics of the area.

The mainstream and black-owned theatres were separate but hardly equal. Theatres catering to black communities were inferior in many ways. Often, they were converted houses that were not in great shape to begin with. They often showed more second-run movies and were less likely to offer amenities, such as air conditioning. Still, they were a source of community identity at a time when they were most needed.

I write about new management ideas. And other stuff. Author of Where Is Here: Canada’s Maps and the Stories They Tell.

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