Discrimination to Blame for Widening Racial Wage Gap, Study Finds
There are many reasons why two workers in the same field might earn different hourly wages: Job experience, educational background, and region are a few variables that often result in different rates of pay. But when it comes to the widening wage gap between black and white workers, none of those factors is the main culprit, according to a report released Tuesday by the Economic Policy Institute. The study found that discrimination is the primary reason the earning gap between whites and blacks has widened over the last 36 years.
“There’s a general perception that although we acknowledge race is still a problem in the U.S., we’ve been making some progress,” Valerie Wilson, the report’s coauthor, told TakePart. “But our results show that at least in terms of wage equality, we have not been making progress—we’ve been moving backwards.”
That devolution was most apparent in the report’s finding that while in 1979 black men’s average hourly wages were 16.9 percent less than those of comparable white men, in 2015 the gap grew to 22 percent. The gap in wages between white women and black women also grew: It was 4.5 percent in 1979 but rose to 11.7 percent in 2015.
This disturbing shift away from wage parity has coincided with a broader trend of overall wage stagnation. Although the American economy continues to generate income and wealth, that growth has accumulated most significantly for those in the top 1 percent of earners. Meanwhile, middle- and low-wage workers’ earnings have remained stagnant and in some cases have declined.
Yet workers are doing more than ever on the job.
“Wages haven’t kept pace with productivity growth across all races,” said Wilson. “Most growth has gone to those at the top.”
Along with wage stagnation, the report’s authors attribute the growth in the racial wage gap in part to lax enforcement of discrimination laws.
Addressing that lack of enforcement could be helped by increased transparency in hiring, promotion, and pay processes, the authors suggest. In August, Massachusetts took a step in that direction by passing the Act to Establish Pay Equity, a law designed to address the gender wage gap. The law prohibits prospective employers from asking applicants for their salary histories, which could prevent employees from being underpaid based on lesser wages they made in the past. The law also makes it illegal for an employer to prohibit employees from discussing their and other employees’ wages.
This kind of transparency could empower workers to seek legal recourse, Wilson said. While laws exist to challenge discrimination based on race, ethnicity, and gender, they aren’t always enforced or applied. The more information workers have about their wages and those of similarly situated employees, the better.
The report’s findings also affirmed the powerful role of unionization in narrowing the wage gap. Wilson and her coauthor directly note the relationship between declining unionization in the early 1980s and the growth of the racial wage gap. Between 1983 and 2015, union membership and state union density have both declined—particularly for men newly joining the workforce. Since the early 1980s, union representation has declined 11 percent among black workers and 8 percent among white workers. That decline poses a problem for black workers, who earn 16.4 percent more when unionized compared with their nonunionized counterparts, according to an August study from the Center for Economic and Policy Research.