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What this report finds: Black-white wage gaps are larger today than they were in 1979, but the increase has not occurred along a straight line. During the early 1980s, rising unemployment, declining unionization, and policies such as the failure to raise the minimum wage and lax enforcement of anti-discrimination laws contributed to the growing black-white wage gap. During the late 1990s, the gap shrank due in part to tighter labor markets, which made discrimination more costly, and increases in the minimum wage. Since 2000 the gap has grown again. As of 2015, relative to the average hourly wages of white men with the same education, experience, metro status, and region of residence, black men make 22.0 percent less, and black women make 34.2 percent less. Black women earn 11.7 percent less than their white female counterparts. The widening gap has not affected everyone equally. Young black women (those with 0 to 10 years of experience) have been hardest hit since 2000.

Our analysis of black-white wage gaps proceeds as follows. In Section 2, we place the black-white wage gap into the broader context of overall wage trends since 1979. Section 3 describes the literature on black-white wage inequality and the contributions of this study. Section 4 describes the data used in this analysis, and Section 5 describes broad trends and patterns in black-white wage inequality for men and women overall, as well as by potential experience and educational attainment. Section 6 breaks down these trends in a detailed analysis that includes regional and industry variations, the effects of declining unionization, and changing patterns of employment across industries and occupations. Section 7 concludes with an overview of the major themes and policy recommendations.

Black And White 2 Fixed Aging Cracked

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These patterns suggest that addressing the problems of stagnant wages and racial wage inequality has now become a dual imperative. While wage inequality is largely understood as a class issue, it is also important to understand how the stagnation of wages for the vast majority of all workers has contributed to measured racial wage inequality. At the same time, any effort to fully remedy racial wage gaps in a way that boosts wages and improves living standards for African American families must end the decades of broad-based wage stagnation that has had the most damaging effects on African American workers. This report focuses on trends in black-white wage gaps since 1979, including an analysis of the role that growing overall wage inequality has played.

This study revisits the trend analysis that dominated the literature from the 1960s through the 1990s, and we update and extend previous studies by examining what has happened to the black-white wage gap since the late 1990s. Our analysis affirms that the black-white wage gap among men expanded during the 1980s and narrowed significantly during the 1990s. Our contribution is a detailed assessment of what has been the pattern or trend for men since the late 1990s and women since the late 1980s.

Patterns in imprisonment might put pressure on the wage gaps among the young and less educated to narrow, or at best remain the same. According to the U.S. Department of Justice, although the ratio of the imprisonment rate of white men and black men sat at 5.9 in 2014, it fell from 7.7 in 2000. The ratios among white women and black women fell from 6.0 in 2000 to 2.1 in 2014. For both, much of the drop was from 2000 to 2007 because the white imprisonment rate rose while the African American imprisonment rate fell. Because the ratio remains so large, imprisonment and its labor market scarring effects will definitely contribute to wage gaps in a given year, but their pattern over time since 2000 should assist in narrowing the wage gap.

Unionization has historically provided a wage advantage to black workers, since union members receive higher wages than otherwise similar non-union workers and union membership rates are highest among black workers. Bound and Freeman (1992) documented the effect of declining unionization on wage losses among black men during the 1980s. Since then, the share of workers with union representation has continued to decline, falling 11 percentage points among blacks and 8 percentage points among whites between 1989 and 2015.6 We expect that this ongoing downward trend in overall union density and the convergence of membership rates among black and white workers has contributed to either flat or worsening racial wage gaps in the years since 2000.

Figure B plots the trend in log hourly wage gaps (the percentage disadvantage) between black and white workers by gender since 1979. The graph includes four series, an adjusted and unadjusted series each for men and women. The unadjusted wage gaps are simply the average differences reported in the survey, while the adjusted series present wage gaps among full-time workers after controlling for racial differences in education, potential experience, region of residence, and metro status.

The adjusted estimates also help us to more clearly identify periods of wage convergence that are less obvious from observing trends in the average (unadjusted) gaps. The adjusted series for men and women in Figure B both show a brief period of progress toward racial pay equity between 1996 and 2000. During this period, the adjusted black-white wage gap falls from 23 percent to 20 percent among men and from 10 percent to 7 percent among women. During the late 1990s, macroeconomic growth was sustained and broad-based, and public policy became more favorable for reducing racial wage inequality. For example, the Bureau of Labor Statistics unemployment rate fell and remained below 5.0 percent from July 1997 to September 2001, and the federal minimum wage was increased in 1997 and 1998. Also, the number of states that set their minimum wage in excess of the federal minimum wage increased. The convergence of the wage gap during this period ended with the start of the short and shallow recession of 2001.

Figure B also shows that racial differences in pay are smaller among women than among men, regardless of whether the estimates are adjusted or unadjusted. However, we have to be careful in how we interpret this finding. It does not mean black women face fewer challenges in the labor market than black men. It just means that potentially more of the disadvantage is associated with gender differences in pay (e.g., relative to white men).11

Figure C shows adjusted hourly wage gaps for white and black women and black men relative to white men. Since black women were near parity with white women in 1979, their wage gap relative to white men was comparable. In 1979, for instance, white women were at a 37.8 percent disadvantage relative to white men, compared with a 42.3 percent disadvantage for black women relative to white men. Black women earned 25.4 percent less than black men in 1979, as measured by the difference between the lines for black women and black men (42.3 percent minus 16.9 percent). The gender wage gap narrowed considerably during the 1980s and early 1990s, resulting by 1993 in a gap of 23.1 percent (14.7 percentage points lower) for white women relative to white men, a gap of 30.9 percent (11.4 percentage points lower) for black women relative to white men, and a gap of 10.6 percent (14.8 percentage points lower) for black women relative to black men. These adjusted gender wage gaps have remained virtually unchanged since the 1990s, so the economic boom did not narrow gender wage disparities in the same way that it narrowed racial wage gaps. Davis and Gould (2015) estimate that 40 percent of the narrowing of the gender wage gap between 1979 and 2014 was due to falling wages for men.

Among more experienced black and white men, sizeable gaps existed at all levels of education in 1980, as shown in Figure G. While gaps among high school graduates changed little over the next three and a half decades, estimates among older college-educated men are more volatile, making it difficult to draw any clear conclusions.

Comparison of unadjusted and adjusted estimates reveals that racial differences in education, experience, region of residence, and metro status help to explain some of the average differences in pay between blacks and whites. For men, these differences have accounted for a fairly consistent amount of the gap, but for women these differences are responsible for more of the gap today than in 1979. Over the 36-year period we examine, changes in adjusted black-white wage gaps also vary by potential experience and by education. Next we analyze the dynamics behind these changes and assign broad reasons for the overall patterns of change by gender and potential experience, as well as identify the interaction of potential experience with educational attainment and region of residence. This disaggregation is extremely important because it will further demonstrate the fact that there is no monolithic black experience.

To remain consistent with prior studies by Juhn, Murphy, and Pierce (1991) and W. Rodgers (2006), the decompositions are performed for people who are at least 18 years old, employed in full-time jobs, and have 20 years of experience or less.14 Juhn, Murphy, and Pierce (1991) estimate these decompositions for black and white workers using the March CPS for 1979 to 1987, while W. Rodgers (2006) uses CPS-ORG files for 1979 to 1994. We use the CPS-ORG files from 1979 to 2015.

Note: Experienced workers have 11 to 20 years of experience. New entrants have 0 to 10 years of experience. Change in gaps are of adjusted average hourly wages. Labels on top of bars indicate net change in the black-white wage gap. Total unobservables include factors such as racial discrimination, unobservable skills, and wage inequality. Total observables include education, experience, region of residence, and metro status.

Note: The * signifies total net change labels where the change is statistically insignificant. Experienced workers have 11 to 20 years of experience. New entrants have 0 to 10 years of experience. Change in gaps are of adjusted average hourly wages. Labels on top of bars indicate net change in the black-white wage gap. Total unobservables include factors such as racial discrimination, unobservable skills, and wage inequality. Total observables include education, experience, region of residence, and metro status. be457b7860