Racial wage gaps stuck but also show promise
The wage gap between white men and Black men shrank steadily between 1960 and 1980 as the U.S. enforced civil rights laws and society found blatant racial discrimination increasingly unacceptable.
Since 1980, though, the racial wage gap has remained stubbornly stuck.
Economists at the University of Chicago have a theory. As the skill gap between white and Black men shrank, the nature of racial discrimination evolved to become far less noticeable, more subconscious and deeply insidious.
For most of U.S. history, whites have imposed laws and customs that prevented African Americans from obtaining a good education, professional training, highpaying jobs or wealth-generating housing. Segregated schools and communities, combined with companies refusing to hire Black people, meant that they could find only manual, low-paying work.
Civil rights activists began making headway to end institutional and codified discrimination after World War II. But federal laws outlawing discrimination based on race came into effect only in the 1960s.
Once Black children could get the same education as white kids and companies could no longer hire only white people to fill specific jobs, the wage gap between white and Black men began to shrink. After 1960, it kept narrowing until 1980, as formal discrimination became socially unacceptable.
Because the color of someone’s skin has nothing to do with a person’s capabilities, the gap should have gone away by now. Researchers at the University of Chicago Becker-friedman Institute wanted to understand why progress stalled and why the racial wage gap persists. (The study could not make a similar analysis for women because their participation in the workforce has changed so dramatically since 1960. Still, Census Bureau data shows Black women today make 58 cents on the dollar when compared with white, nonhispanic men.)
“This stagnation has occurred even with a notable
drop in reported measures of racial discrimination in national opinion surveys and the narrowing of the racial gap in test scores conditional on education in household surveys,” a paper from the group stated.
An analysis of census, employment and wage data revealed that the racial wage gap depended a lot on the work involved. To drill down, the economists divided jobs into four primary tasks: abstract reasoning, such as engineers; routine operations, such as factory workers; manual labor, such as construction; and contact work, such as sales.
“Different occupations require a different mixture of tasks, which in turn demand certain market skills and degrees of interaction among workers and customers,” the researchers said. Researchers statistically adjusted their data for educational achievement and other factors.
Turns out you can change laws, but you cannot change minds. And the changing nature of highpaying work toward more customer-facing roles has only worsened the racial wage gap.
First, the bad news. Employers seem to think their mostly white clients and customers will prefer a white man to provide them engineering or medical advice, and as a result, they do not put Black men in those roles as frequently and pay them less. The paper’s authors call this task-based discrimination.
The wage gap for jobs in the abstract category has remained constant from 1960 to 2018, showing little or no improvement. The authors believe this is because of lingering racial stereotypes.
The good news is the wage gap in the contact category has almost disappeared. Employers are comfortable employing Black men in customerfacing roles such as sales clerks, lawyers, teachers and managers. While racial discrimination remains a societal problem, eliminating the wage gap in these publicfacing roles indicates significant progress since 1960. The authors calculate that declining bigotry accounts for 50 percent of the improvement in closing the racial wage gap.
Unfortunately, the progress in contact jobs is wiped out by the stagnation in abstract jobs, which make up a growing proportion of employment and pay higher wages to white men than Black men.
“A narrowing of racial skill gaps and declining discrimination between 1980 and 2018 caused the racial wage gap to narrow by 6 percentage points,” the researchers found. “On the other hand, the changing returns to tasks since 1980 — particularly the increasing return to abstract tasks — widened the racial wage gap by about 6.5 percentage points.”
Many Americans like to believe that we have sufficiently addressed 350 years of institutional, legal discrimination against nonwhite people. But statistic after statistic demonstrates that while laws have changed, some people still judge others based on their appearance.
No one has any easy answers to address the racial wage gap; everyone must do their part. We need better role models, public schools, city services, state universities and hiring managers. We need to be better friends, allies, customers and supervisors.
We need to remember that despite 50 years of effort, it will likely take another 50 years to set society straight. The worse thing we can do is give up, falsely believing that we’ve done all that is necessary to bring equity and justice to our communities.