As noted here many times before, there are big wage and wealth gaps between black workers and the rest of the U.S. labor force. A major factor is the legacy of racism, including more than a century of housing discrimination. The latter has made accumulation of wealth a big problem for black people.
A new report in The Wall Street Journal shows there’s been no improvement in the wage gap in what is widely touted as a booming economy (and at the White House as “the greatest ever” in the history of the U.S.). Sounds fantastic if you ignore the fact that millions of people of all colors have yet to recover fully from the impacts of the Great Recession, and a majority of Americans live paycheck to paycheck without enough saved to cover a $1,000 emergency.
The unemployment level of black workers is hovering around historic lows. Hard to gainsay that statistic. But in isolation it tells far from the whole story, which is not nearly so positive. For one thing, the latest tally for black unemployment, 6.7 percent, is still almost twice the 3.4 percent rate for white workers.
Eric Morath and Soo Oh write that for all U.S. workers in the 1st quarter of 2019, median pay was $900 a week, up $46 since the Great Recession began in December 2007. But this chart gives a more complete picture:
For Hispanic workers, the increase in adjusted earnings was even more substantial, up 11.8%, or $73 a week, from when the recession began. The comparable gain for black workers was 1.6%, or $11. The analysis is based on a four-quarter average of inflation-adjusted usual weekly earnings, to control for seasonality and changes in prices. [...]
“In a hotter economy, it’s important to be looking at the structural issues that may be inhibiting black workers from seeing better gains.” said Valerie Wilson, an economist and director of the Economic Policy Institute’s program on race, ethnicity and the economy.
One of those is racial discrimination, she said. Other factors are lack of jobs near where black workers live and a reluctance of employers to hire those with criminal backgrounds. More prisoners are black than white, according to the Justice Department, despite black people accounting for about 13% of the U.S. population. And reports have shown black men receive longer sentences than white men for similar crimes.
Three years ago, in a lengthy report at the Economic Policy Institute, Wilson and William M. Rodgers III came up with some practical suggestions for reducing the wage gap:
- Consistently enforce anti-discrimination laws in the hiring, promotion, and pay of women and minority workers.
- Convene a high-level summit to address why black college graduates start their careers with a sizeable earnings disadvantage.
- Under the leadership of the Bureau of Labor Statistics, identify the “unobservable measures” that impact the black-white wage gap and devise ways to include them in national surveys.
- Urge the Equal Employment Opportunity Commission to work with experts to develop metropolitan area measures of discrimination that could be linked to individual records in the federal surveys so that researchers could directly assess the role that local area discrimination plays in the wage setting of African Americans and whites.
- Address the broader problem of stagnant wages by raising the federal minimum wage, creating new work scheduling standards, and rigorously enforcing wage laws aimed at preventing wage theft.
- Strengthen the ability of workers to bargain with their employers by combatting state laws that restrict public employees’ collective bargaining rights or the ability to collect “fair share” dues through payroll deductions, pushing back against the proliferation of forced arbitration clauses that require workers to give up their right to sue in public court, and securing greater protections for freelancers and workers in “gig” employment relationships.
- Require the Federal Reserve to pursue monetary policy that targets full employment, with wage growth that matches productivity gains.
For many, however, the first step is acknowledging that there even is a problem, and that racism causes a big part of it, both historically and nowadays. Too many see it as the natural order or a matter so intractable that it can’t be solved, while others blame the wage gap on the people afflicted by it. The reality is that this is fixable but will require an adjustment of prejudicial attitudes, political will, and policy changes that go well beyond economics.