The Black-White Wage Gap Is as Big as It Was in 1950Breaking News
tags: racism, civil rights, economics, discrimination
The black-white wage gap shrunk substantially from 1950 to 1980, and especially during the 1960s. Civil-rights laws and a decline in legally sanctioned racism most likely played some role. But the main reasons, Mr. Charles said, appear to have been trends that benefited all blue-collar workers, like strong unions and a rising minimum wage. Because black workers were disproportionately in blue-collar jobs, the general rise of incomes for the poor and middle class shrank the racial wage gap.
One law was especially important: the 1966 amendment to the Fair Labor Standards Act. When Congress passed the original law, during the New Deal, it deliberately exempted service and other industries with many black workers from the minimum wage. “Just expanding the minimum wage to those industries,” Ellora Derenoncourt, a University of California, Berkeley, economist, said, “boosted the relative wages of black workers substantially.”
Since 1980, however, the wage gap has increased again, and is now back roughly to where it was in 1950. The same economic forces are at work, only in the opposite direction: The minimum wage has stagnated in some states, unions have shrunk, tax rates on the wealthy have fallen more than they have for anyone else and incomes for the bottom 90 percent — and especially the bottom half — have trailed economic growth. Black workers, again, are disproportionately in these lower-income groups.
One nuance is that the racial wage gap has shrunk somewhat among higher-income men. That’s a sign that more African-Americans have broken into the upper middle class than was the case in prior decades:
This history also points to some of the likely solutions for closing the racial wage gap. An end to mass incarceration would help. So would policies that attempt to reverse decades of government-encouraged racism — especially in housing. But it’s possible that nothing would have a bigger impact than policies that lifted the pay of all working-class families, across races.
“Black people are concentrated in low-paying jobs if they have jobs,” Ms. Derenoncourt said. “This has been one of the most egregious forms of inequality over the last 40 years: There has been almost no wage growth for the bottom half of the wage distribution.”