New research suggests African Americans have been hit particularly hard by the lack of jobs for less-educated workers.
By Tom Jacobs
(Photo: Kentish Plumber/Flickr)
The earnings gap between black and white American men has essentially returned to its mid-20th century level.
That discouraging finding is presented in a newly published working paper from the National Bureau of Economic Research.
“A large gap in the relative earnings of black and white men has been a stubbornly persistent feature of the U.S. labor market since the end of slavery,” write economists Patrick Bayer of Duke University and Kerwin Kofi Charles of the University of Chicago.
While that disparity has grown and shrank over the decades, they report that “taken as a whole, the relative position of the median white and black men in the earnings distribution has changed very little” over the past 70-plus years.
Bayer and Charles analyzed United States Census data from 1940 to 2000, as well as data from the annual American Community Survey from 2005 to 2014. (The most recent data is included to “provide a snapshot before and after the Great Recession.”)
They focused on males between the ages of 25 to 54 in order to avoid issues with young people still in school or older ones taking early retirement.
“Studying working and non-working men, we find that, after closing substantially from 1940 to the mid-1970s, the median black-white earnings gap has since returned to its 1950 level,” they write.
They also find a division has developed among black men, with those in the top one-quarter of the earnings rankings faring significantly better than their predecessors. This positive trend is driven by “improved access to quality schools,” allowing more black men into higher education, which, in turn, leads to better-paying jobs.
“Our results are consistent with substantial positive effects of legislation from the Civil Rights era in closing the educational attainment gap,” they write. “But at the bottom and middle of the earnings distribution, structural changes to the labor market over the past several decades have overwhelmed these gains, causing both the racial working gap (the percentage of men who are employed) and median earnings gap to widen significantly since 1970s.”
In other words, the fact that a good education is increasingly essential to earning a good income has “disproportionately disadvantaged the shrinking but still substantial share of blacks with lower education.” When you include their dismal prospects into the mix, the overall figure for black men’s earnings, as compared to whites, has fallen significantly over the past four decades.
How can this be reversed? “Race-neutral economic changes, and related public policy decisions that improve the prospects of all workers in the lower and middle portions of the earnings distribution will have the side effect of reducing economic inequality,” the researchers assert.
So here’s something of an irony: While the white working class made its unhappiness clear at the polling place earlier this month, effective policies that boost their prospects will also help close the racial earnings gap.