The wage gap between blacks and whites is the largest since 1979

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The wage gap between blacks and whites is larger today than it was in 1979, according to a new report released by the Economic Policy Institute on Tuesday.

The report found that black men make 22 per cent less money than do white males, while black women make 34.2 per cent less.

Factors such as experience, location, and education were controlled for in the report, which also found that the racial wage gap is growing primarily because of discrimination, or “racial differences in skills or worker characteristics that are unobserved or unmeasured in the data.” Growing income inequality is also a contributing factor.

Of all the groups evaluated by the EPI, it found that black women with less than 10 years of experience have been affected most by the racial wage gap. It also found that black male college graduates who entered the workforce in 1980 had less than a 10 per cent disadvantage compared to white college graduates; today, black male graduates are at approximately an 18 per cent disadvantage.

The report found that wage growth has lagged significantly behind productivity growth for everyone except those in the top 5 per cent since 1979. For workers in the top 1 per cent, wage growth has exceeded productivity growth. And while lagging wage growth has affected workers across all demographics, growth has been even slower for African Americans, compared to white men and women.

“As a result, pay disparities by race and ethnicity have remained unchanged or have expanded,” according to the report.

12764 2Economic Policy InstituteRace/ethnicity categories are mutually exclusive (i.e., white non-Hispanic, black non-Hispanic, and Hispanic any race).

While the report also found that the racial wage gap is smaller between women than between men, it notes that this does not necessarily imply that black women do not face as many obstacles as black men, but that the disadvantage they experience may be more associated with the gender pay gap.

Although the racial wage gap has trended upwards since 1979, it has not an uninterrupted increase. The wage gap expanded significantly in the 1980s, then decreased significantly in the 1990s before increasing slightly after 2001, according to the report.

The exception to this, the report notes, are “new-entrant women, for whom racial wage gaps have grown more between 2007 and 2015 than in any other period included in our analysis.”

The EPI, a left-leaning think tank, made a number of recommendations on how best to decrease the wage gap, all of which will involve “intentional and direct action.” These changes include:

  • Enforcing anti-discrimination laws that are already on the books
  • Having the Bureau of Labour Statistics evaluate and identify the so-called “un-observable measures” that seem to play a role in racial wage gaps
  • Raising the federal minimum wage to $15 per hour
  • Enforcing workers’ union rights.

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