Well back in the early 20th century I'm afraid that was mostly what was available to discriminated minorities. It's not just theory, it goes back to railroadmen being pissed blacks were undercutting them. They could not just outright outlaw blacks so they just got the minimums set to the prevailing white wage.
Suffrage in the early 20th century applied more to whites than blacks. And having low wage labor be black market without protections can in some cases benefit the upper classes.
