Power

Study: Black-White Wage Gap Worse Today Than It Was in 1979

The study revealed that even with the same education, work experience, metro status, and region of residence, Black men in 2015 made 22 percent less than their white male counterparts and Black women earned 34.2 percent less than white male workers.

The authors attributed the racial wage gap increases in the early 1980s to rising unemployment, declining unionization, the failure to raise the federal minimum wage, and lax enforcement of anti-discrimination laws. The gap shrank in the late 1990s due to increases in the minimum wage and tighter labor markets, but began to grow again in 2000, the study’s authors said. Shutterstock

The wage gap between Black and white people who work is wider today than it was nearly four decades ago, according to research released last week.

The Economic Policy Institute (EPI) report, “Black-white wage gaps expand with rising wage inequality,” revealed that the disparity has ebbed and flowed over three distinct time periods rather than occurring along a straight line.

The 65-page study revealed that even with the same education, work experience, metro status, and region of residence, Black men in 2015 made 22 percent less than their white male counterparts and Black women earned 34.2 percent less than white male workers.

The study found that young Black women with ten years or fewer of work experience have been the most negatively affected by racial wage gaps.

The study, released as part of EPI’s Raising America’s Pay initiative, was by authored by the EPI’s Program on Race, Ethnicity, and the Economy (PREE) Director Valerie R. Wilson, and William M. Rodgers III, a Rutgers University economist and public policy professor.

Their study concluded that wage gaps have grown because of discrimination and racial differences in skills “or worker characteristics that are unobserved or unmeasured in the data.”

“Because we identify discrimination as the portion of the black-white wage gap that remains unaccounted for after controlling for racial differences in factors known to have market value (i.e. education, experience, etc.), there could potentially be other things we have not controlled for either because that information is not available or it’s difficult to measure,” Wilson said in an email to Rewire. “I’m hard pressed to think of job-related characteristics that would explain a significant portion of this remaining gap, but there are trends like rising incarceration that could also have an impact on differences in wages.”

Wilson said EPI wanted to understand trends in racial wage gaps during recent periods of growing overall wage and income inequality. “We also wanted to offer an updated look at trends in the black-white wage gap since the mid-1990s when the last major studies on this issue were done,” she said.

Wilson and Rodgers emphasized that changes in Black education levels and other identifiable factors did not primarily explain why the racial wage gap has widened.

They even contend that Black workers “completing a bachelor’s degree or more” would not close or reduce the Black-white wage gap.

The authors attributed the racial wage gap increases in the early 1980s to rising unemployment, declining unionization, the failure to raise the federal minimum wage, and lax enforcement of anti-discrimination laws. The gap shrank in the late 1990s due to increases in the minimum wage and tighter labor markets, but began to grow again in 2000, the study’s authors said.

Although the study emphasizes the role of discrimination in contributing to the racial wage gaps, Wilson noted that the study’s authors did not make any attempt to characterize or identify specific forms of discrimination.

This includes the impact of possessing a “black sounding” names or wearing cultural hairstyles such as locks, cornrows, and braids.

“Anytime individuals are paid differently based on characteristics completely unrelated to productivity, including race, names or hairstyles, it’s a form of discrimination,” Wilson said.

Research indicates that such factors could impact a Black employee from landing a job. For example, in the oft-cited National Bureau of Economic Research study published in 2003, “Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination,” researchers concluded that names perceived as “white” receive 50 percent more callbacks for interviews than those perceived as Black names.

When asked if her own experience as a professional Black woman help illustrate the EPI study’s findings, Wilson said it was hard to tell.

“How many of us really know how much our colleagues or people with similar education and experience are making,” Wilson said. “Lack of pay transparency is one of the reasons why racial and gender pay disparities are so stubbornly hard to close.”

The study’s authors identified several solutions for closing the racial wage gap, including better and more consistent enforcement of longstanding anti-discrimination laws.

Wilson and Rodgers recommended raising the federal minimum wage, supporting the rights of people who work to engage in collective bargaining, and requiring employers to report employee pay information by race, ethnicity, and gender, which is supported by the Department of Labor and the Equal Employment Opportunity Commission, Wilson said.