Having a college degree worsens the gap, counter to the idea that education is the key to a more equal society.
As wages for American workers have stagnated for more than a generation, the income gap between black and white workers has widened, and discrimination is the main reason for the persisting disparity, according to a new report.
The Economic Policy Institute also found that young black women are being hit the hardest. This gap remains even after controlling for factors like education, experience, or geography.
The wage gap today is “worse now than it was 36 years ago,” said Valerie Wilson, director of the liberal-leaning think tank’s Program on Race, Ethnicity and the Economy.
“For the most part, wages have been fairly flat since 2000, as have incomes and other economic measures,” Wilson said. “As we’ve seen this overall stagnation, those racial disparities have grown.”
According to the report released Tuesday, as of 2015, black men living in similar metropolitan areas and regions of the country make 22 percent less than white men with the same education and experience. For black women, the number is 34.2 percent less. Black women made 11.7 percent less than white women.
Since 1979, median hourly wage growth has fallen short of productivity growth for all workers, regardless of race or gender. Meanwhile, wages for black men and women have grown more slowly than for whites – resulting in the wage gap remaining unchanged or expanding in the decades that followed.
The report points to several reasons for the widening gap, while noting discrimination has consistently played a major role. Few black workers have the kinds of top-wage earning jobs that have seen the majority of growth during the studied period. The decline of unions – which have historically been helpful to black workers seeking income equality – has also contributed to the disparity.
And the report concludes that having a college degree worsens the gap, counter to the idea that education is the key to a more equal society.
While black male college graduates entering the workforce in the 1980s had less than a 10 percent disadvantage compared to whites, by 2014, similarly educated black men started their first jobs at a deficit of roughly 18 percent. The report also found that growing earnings inequality has impacted young black college-educated men and women’s wage deterioration more in the years since the Great Recession than during any other period.
“Education unquestionably enhances mobility and increases wages, but what it does not do as effectively is eliminate racial disparities,” said Wilson. “More education means higher wages, but it does not mean equal wages between blacks and whites as they ascend that ladder.”
The report calls for several policy measures to address the wage gap, including consistently enforcing long-standing anti-discrimination laws in the hiring, promotion and pay of women and minorities; convening a summit to address why black college graduates start their careers at an earnings disadvantage; and raising the federal minimum wage.