Diversity Pays

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It has been long established that black men and minorities paid less in job than white majority. There are of course many possible reason behind the differences in average wages between races groups. For example, white men may be more educated than black men, geographic, ages, immigrations rates, and occupational may differ.[1]

Background

Median weekly earnings by race and gender Source: US Bureau of Labor Statistic (Q3 2020) ; screengrab from Investopedia

Pay inequality in the United States has a much longer history than the nation itself, with much of its early history based on the free labor of enslaved Africans and Native Americans. [2] Efforts to close the pay gaps are far more recent. Title VII of the Civil Rights Act of 1964, the most significant statute, is just 56 years old. It prevented discrimination in payments based on "race, color, religion, sex, or national origin."[3] Then the Lilly Ledbetter Fair Pay Act was passed in 2009, amending previous amendments to several federal statutes defending workers' rights and clarifying that all inequitable, unequal payments are unconstitutional, regardless of how long before they existed. [4]

While passing laws is a significant step toward social progress, it is often the case that these laws do not result in or complete the change. That isn't to suggest that improvement hasn't been made. However, the change that has been achieved has not achieved or been noticed fairly by both communities. For example, wage growth and jobs among Native Americans continue to decrease, contributing to a high poverty rate (one in three) and a yearly median income of just $23,000. Redbird, Beth. [5]

Clearly, considering all that has changed in the last 56 years, significant disparities in earnings exist among different demographic groups. By far the highest income differential is based on race.

Understanding the Pay Gap

Pay Gap according to Cambridge Dictionary is "the difference between the average pay of two different groups of people." [6] Consistent income gap can result in one or more classes of people gaining more wealth than others. There are several organizations that watch closely to this pay diversity such as Federal Reserve, The Economic Policy Institute, and The Urban Institute.

The causes of the pay gap are more complex than a single factor. Different genders have different perspectives and follow different journeys through schooling and preparation due to the interwoven forces of segregation, pervasive sexism, and systemic racism. General biases based on outdated assumptions, as well as societal expectations on gender roles, play a role. Depending on race, ethnicity, socio-economic background, gender and other factors, many women face additional barriers that limit their opportunities.[7]

This wage gap is attributed in part of persistent ethnic inequalities in job sector results. Black employees are more likely to be working in low-wage occupations. In addition to lower overall wages, Black employees face fewer flexible work hours, harder-to-predict schedules, and generally unstable jobs. Black workers are still heavily concentrated in states where the federal minimum wage is mandatory.

Furthermore, Black employees face greater income volatility, which is primarily attributable to higher joblessness and employment exits in the past. Discrimination in the employment market is a major driver of racial earnings and workplace inequalities. Skills do not tend to bridge these gaps; in contrast to other classes, Black Americans earn lower, though good, returns to post-secondary education. Rather, discrimination in the labor market is a major driver of racial earnings and wage gaps. Because of these racism, the average Black worker and families have lower incomes with which to cope with a large-scale economic shock.[8]

Black Men Pay Gap

Black men earn less compared to white men. Source: PayScale ; screengrab from shrm.org

Black man paid less than white men even after 55 years after the passage of the Civil Rights Act. According to a PayScale online salary report, the earnings difference between black or African American men and white men is consistent. And as black or African American men advance throughout their careers, they continue to earn less than similarly skilled white men. They are the only racial/ethnic group that has yet to reach pay parity for white males. The survey discovered that black or African American men had the highest pay gap as compared to white men in our study. For every dollar a white man earns, black men earn 87 cents (uncontrolled sample). The survey conducted between January 2017 and February 2019 with total 1.8 million respondents.[9]

Even in managerial roles, black men are underpaid compared to their white colleagues. According to PayScale, executive-level black men paid 97 cents for every dollar earned by white men with the same qualifications. Worse, as black men progressed up the business ladder, the racial pay gap increased. This gap may be due in part to occupational discrimination, which means that black men are more likely to work in lower-paying professions, such as social services, than white men in senior roles, according to Gruver.

Black Women Pay Gap

Women's Median Annual Earnings as a % of White Men's for Full-time, 1988-2019 and Projections. Source: Earnings data from U.S. Census Bureau (2020), Wage projections based on calculations done by AAUW

Women of color in the United States face the impact of the country's ongoing and systemic income inequality. The disparities reflect the real-world repercussions of patriarchy and white supremacy in the United States, as well as how our society routinely undervalues people of color and their work. The size of pay gap among women who hold full-time, year-round jobs by race/ethnicity revealed by the U.S. Census Bureau. Women sacrifice income as a result of the cents-on-the-dollar disparity, resulting in less money to support themselves and their families.

When comparing both men and women who work full time, year-round in the United States, according to NWLC estimates based on the U.S. Census Bureau's Current Population Survey for 2016, women were paying only 80 cents for every dollar paid to their male counterparts.[10] But the pay gap was even wider when looking specifically at full time working black women compared to non-Hispanic men.

Based on US census bureau 2020, black women are typically paid just 63 cents for every dollar paid to white, non-Hispanic men. The median annual pay for a Black woman in the United States who holds a fulltime, year-round job is $41,098, while the median annual pay for a white, non-Hispanic man who holds a full-time, year-round job is $65,208 – a difference of $24,110per year.[11]

How to Narrow the Gap

Despite the fact that employees of all races earned higher salaries on average in 2018 than in 2000, Roy Eduardo Kokoyachuk, a partner at ThinkNow Research, which helps businesses adapt to the demographic and cultural drivers that affect customer choices, observed that "at any level of wage distribution, the difference between black and white incomes was greater in 2018 than it was in 2000," according to the report. Kokoyachuk said education alone can't close the racial pay gap. The racial pay gap can be overcome if policymakers are committed to taking actions add Kokoyachuk. Employers should take initiatives such as increasing the implementation of anti-discrimination policies in the workplace and providing tax benefits to minority entrepreneurs and company owners. Option of not asking applicants about their previous earnings also need to be considered. According to new research from Boston University, salary history bans will significantly narrow both gender and racial gaps. After salary history bans were passed, wage for job changers will rose by 8 percent for women and 13 percent for black people.[10]

See Also

Black Women's Equal Pay Day

References

  1. Antecol, Heather; Bedard, Kelly.The Racial Wage Gap: The Importance of Labor Force Attachment Differences across Black, Mexican, and White Men. Jstor. 2004. Retrieved March 22, 2021.
  2. Forgotten History: How The New England Colonists Embraced The Slave Trade. NPR. 21 June 2016. Retrieved March 27, 2021.
  3. Title VII of the Civil Rights Act of 1964. U.S. Employment Opportunity Commission. Retrieved March 27, 2021.
  4. 111th Congress (2009-2010) S.181 - Lilly Ledbetter Fair Pay Act of 2009. Congres.gov. Retrieved March 27, 2021.
  5. ‘’ What Drives Native American Poverty?’’. ipr.northwestern.edu. 24 February 2020. Retrieved March 27, 2021.
  6. Meaning of pay gap in English. Cambridge Dictionary. Retrieved March 27, 2021.
  7. The Simple Truth About the Gender Pay Gap 2020 Update. AAUW. Retrieved March 27, 2021.
  8. Hardy, Bradley L. ; Logan, Trevon D. The Hamilton Project Racial Economic Inequality Amid the COVID-19 Crisis. brookings.edu. August 2020. Retrieved March 27, 2021.
  9. Gruver, Jackson. RACIAL WAGE GAP FOR MEN. Pay Scale. 7 May 2019. Retrieved March 27, 2021.
  10. 10.0 10.1 Miller, Stephen. Black Workers Still Earn Less than Their White Counterparts. shrm.org. 11 June 2020. Retrieved March 27, 2021.
  11. Quantifying America’s Gender Wage Gap by Race/Ethnicity. nationalpartnership.org. March 2021. Retrieved March 22, 2021.