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Black-White Wage Gap Grows as Americans Remain in Denial

Three new studies suggest racial economic inequality remains robust, despite the skewed views of many Americans.

A new study finds Americans wildly overestimate the progress we have made toward racial economic equality.

Ironically, this news comes days after other research revealed a growing wage gap between blacks and whites, as well as an entrenched hiring bias against African Americans.

"These findings suggest a profound misperception of, and unfounded optimism regarding, societal race-based economic equality," concludes a research team led by Michael Kraus of the Yale University School of Management.

This ignorance "is likely to have important consequences for public policy," the researchers write in the Proceedings of the National Academy of Sciences. "We cannot solve problems that we do not know exist, or that we think are already solving themselves."

These conclusions are based on four studies featuring 1,377 Americans—blacks and whites from both the top of the income ladder (greater than $100,000 annually) and the bottom ($40,000 or less). They were asked to estimate the hourly wages or annual income of black and white Americans at a specific point in the past (1947, 1973, or 1979) and during the second decade of the 21st century.

The results reveal "a shocking level of ignorance," the researchers write. "Overestimates of current levels of racial economic equality, on average, outstripped reality by roughly 25 percent."

"High-income white Americans' overestimates of current racial economic equality were larger than those generated by low-income white Americans, and by black Americans across the income distribution," they note. "It is likely that high-income white individuals tendency to believe that the country has already achieved equal rights, if not outcomes, between racial groups contributes to these misperceptions."

"We cannot solve problems that we do not know exist, or that we think are already solving themselves."

That analysis is backed up by the finding that "white participants' estimates of past racial economic inequality were, on average, fairly accurate." This suggests that, on average, white Americans acknowledge that blacks were discriminated against in the past—but overestimate how much progress has been made over the decades.

By one measure, black Americans are actually falling behind. A new analysis by the Federal Reserve Bank of San Francisco finds "black men and women earn persistently lower wages compared with their white counterparts"—a gap that "cannot be fully explained by differences in age, education, job type, or location."

Even more troublingly, this gap is not only persisting, but apparently expanding.

"In 1979, the average black man in America earned about 80 percent of the average white man," writes the research team led by economist Mary Daly. "By 2016, this gap had grown such that the average black male worker earned just 70 percent of the hourly wage of the average white male worker. The data for women show a similar pattern. In 1979, the average black woman earned about 95 percent of the average white woman. In 2016, the average black woman earned about 82 percent of what the average white woman earned."

One more striking statistic: "Among men, the black-white earnings gap is now slightly higher for those with a college degree or more than it is for high school graduates." Think a diploma is a great equalizer? Think again.

A third research report, also published in the Proceedings of the National Academy of Sciences, analyzed 24 studies published since 1989 that looked at discrimination in hiring.

"We observe no change in the level of hiring discrimination against African Americans over the last 25 years," writes a research team led by Northwestern University sociologist Lincoln Quillian. "Since 1989, whites receive on average 36 percent more callbacks (invitations to come in for an interview) than African Americans, and 24 percent more callbacks than Latinos."

The results reflect "a striking persistence of racial discrimination in U.S. labor markets," the researchers conclude. Together, the studies reveal a striking disconnect between our self-image as a society and the far-less-rosy reality.