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Wednesday, September 21, 2016

Black-White Wage Gaps Expand with Rising Wage Inequality [feedly]

Black-White Wage Gaps Expand with Rising Wage Inequality

The EPI's Valerie Wilson and William M. Rodgers III:

Black-white wage gaps expand with rising wage inequalityWhat this report finds:Black-white wage gaps are larger today than they were in 1979, but the increase has not occurred along a straight line. During the early 1980s, rising unemployment, declining unionization, and policies such as the failure to raise the minimum wage and lax enforcement of anti-discrimination laws contributed to the growing black-white wage gap. During the late 1990s, the gap shrank due in part to tighter labor markets, which made discrimination more costly, and increases in the minimum wage. Since 2000 the gap has grown again. As of 2015, relative to the average hourly wages of white men with the same education, experience, metro status, and region of residence, black men make 22.0 percent less, and black women make 34.2 percent less. Black women earn 11.7 percent less than their white female counterparts. The widening gap has not affected everyone equally. Young black women (those with 0 to 10 years of experience) have been hardest hit since 2000.

Introduction and key findings ... Income inequality and slow growth in the living standards of low- and moderate-income Americans have become defining features of today's economy, and at their root is the near stagnation of hourly wage growth for the vast majority of American workers. Since 1979, wages have grown more slowly than productivity—a measure of the potential for wage growth—for everyone except the top 5 percent of workers, while wage growth for the top 1 percent has significantly exceeded the rate of productivity growth (Bivens and Mishel 2015). This means that the majority of workers have reaped few of the economic rewards they helped to produce over the last 36 years because a disproportionate share of the benefits have gone to those at the very top. While wage growth lagging behind productivity has affected workers from all demographic groups, wage growth for African American workers has been particularly slow. As a result, large pay disparities by race have remained unchanged or even expanded.

This study describes broad trends and patterns in black-white wage inequality and examines the factors driving these trends as the growing wedge between productivity growth and wage growth has emerged. ...

Our primary finding is that there continues to be no single African American economic narrative. Black-white wage gaps are larger today than they were in 1979, but the increase has not occurred along a straight line, nor has it affected everyone equally. Indeed, the post-2000 patterns show that the diversity of experiences has expanded. While young black women newly entering the workforce have fallen furthest behind their white counterparts since 2000, the work experience of older African Americans continues to partially insulate them from macroeconomic and structural factors associated with growing racial inequality. However, this is cold comfort for members of this older cohort who experienced a major loss in their relative wages during the early 1980s, when many of them were first entering the labor market. They have yet to fully recover from the damage of the 1981–1982 recession and the cutbacks, in the 1980s, to political and financial resources to fight labor market discrimination.

We also show that changes in unobservable factors—such as racial wage discrimination, racial differences in unobserved or unmeasured skills, or racial differences in labor force attachment of less-skilled men due to incarceration—along with weakened support to fight labor market discrimination continue to be the leading factors for explaining past and now the recent deterioration in the economic position of many African Americans. ...

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