Discrimination Underpins Black-White Wage Gap in U.S.

Average hourly wage for black men is 31 percent lower than that of white men.

(Photo by Wouter Engler)

After widening in the 1980s, tightening in the 1990s, and increasing again throughout the 2000s, the earnings gap between black and white workers in the U.S. is larger today than it was in 1979, according to a new Economic Policy Institute report. That increase doesn’t appear to stem primarily from changes in education levels or other observable factors like skill differences either.

“Wage gaps are growing primarily because of discrimination,” the report finds, in addition to growing income inequality across American society.

Indeed, while differences in education and experience levels explain more than a quarter of the black-white wage gap among men and about a third of the gap among women, according to EPI, earnings inequality appears to have expanded most for college graduates. The gap has also widened more among women, with black women’s wages now 19 percent lower than white women’s, compared to 6 percent less in 1979. Findings released today by the Center for Economic and Policy Research shows that black women are also the only group more likely to be working multiple jobs today than in 1996.

The wage gap is most prominent among men. The average hourly wage for black men was 22.2 percent lower than that of white men in 1979; that figure is 31 percent lower today.

Cities working on racial income inequality take note: According to EPI, “any effort to fully remedy racial wage gaps in a way that boosts wages and improves living standards for African American families must end the decades of broad-based wage stagnation that has had the most damaging effects on African American workers.”

EPI points to declining unionization as a source of growing inequality from 1983 on. For male newcomers to the workforce, a diminishing union wage premium accounts for 43 percent of the total growth in the wage gap between black and white men. For experienced men, it accounts for a third. As Jake Blumgart reported for Next City’s “How a Win for Unions Can Be a Win for Everyone,” many researchers have made a similar connection:

A litany of major studies and books in recent years — the latest from a couple of International Monetary Fund economists — have traced the sharp rise in inequality to the decline of unions. Having a left-leaning political culture matters too, but international political scientist Vincent Mahler recently found that victorious leftist parties were much less strongly associated with income redistribution than the presence of a strong union movement. That’s because organized labor’s contribution to equitable economic outcomes doesn’t only stem from the wage and benefit premium they provide their members.

At the root of all of this is a near total stagnation of wages over the past 35 years, even as productivity has soared. Productivity has increase dramatically for everyone but the top 5 percent of earners, while wage growth for the top 1 percent has dramatically outpaced productivity growth. The growing pay-productivity gap has disproportionately affected black Americans, whose wages have grown more slowly than their white counterparts. Because very few Black Americans are among the top 5 percent of wage earners — just 3 percent of all chief executives are black — the concentration of wealth at the very top has contributed to the growing racial wage gap.

EPI found the gap widened the most in the Midwest (where it had been smallest in 1979) and the least in the South (where it had been largest in 1979). The report recommends urging the Equal Employment Opportunity Commission to develop metropolitan area measures of discrimination to help determine what factors — like right-to-work and minimum wage laws — are affecting the gap regionally.

The report also recommends enforcing existing antidiscrimination laws to increase pay and the hiring and promotion of women and minority workers. It also suggests convening a summit to address why black college graduates begin their careers already at earnings disadvantage, raising the federal minimum wage, creating new work scheduling standards, and enforcing laws aimed at preventing wage theft. And it encourages strengthening workers’ rights to organize, by combating state laws that restrict public employees’ collective bargaining rights, and securing greater protections for freelancers and workers in the “gig” economy.

Jen Kinney is a freelance writer and documentary photographer. Her work has also appeared in Philadelphia Magazine, High Country News online, and the Anchorage Press. She is currently a student of radio production at the Salt Institute of Documentary Studies. See her work at jakinney.com.

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Tags: income inequalityraceracism

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