Academic journal article Monthly Labor Review

The Unexplainable, Growing Black-White Wage Gap

Academic journal article Monthly Labor Review

The Unexplainable, Growing Black-White Wage Gap

Article excerpt

For the past several decades, black workers have fared worse than white workers in the U.S. labor market. Despite government policies designed to reduce or eliminate racial disparities, black workers continue to experience lower wages and higher unemployment rates than Whites. The latest evidence comes from a recent study by economists at the Federal Reserve Bank of San Francisco, "Disappointing facts about the black-white wage gap" (Economic Letter, Federal Reserve Bank of San Francisco, September 5, 2017). Authors Mary C. Daly, Bart Hobijn, and Joseph H. Pedtke show that black workers still earn less than their white counterparts in a worsening trend that holds true even after accounting for differences in age, education, job type, and geography.

In 1979, black men earned, on average, about 80 percent of what white men earned ($15 per hour versus $19 per hour in inflation-adjusted dollars); in 2016, it slipped to about 70 percent ($18 per hour vs. $25 per hour). Although wages for black males increased, the gain lagged significantly behind that of their white counterparts. The gap also widened for black women, though the disparities were smaller. From 1979 to 2016, wages for black women fell from roughly 95 percent of what white women earned ($11 an hour versus $12 an hour) to about 82 percent ($16 versus $20).

The authors found it most notable that a significant portion of the racial wage disparity is attributable to unexplained factors, factors that are hard to characterize or measure. …

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