Racial pay gap in the United States
[2] A variety of explanations for these differences have been proposed—such as differing access to education,[3] two parent home family structure (70% of African American children are born to parents who are not legally married), high school dropout rates and experience of discrimination and deep-seated and systemic anti-Black racism—and the topic is highly controversial.
When the Civil Rights Act of 1964 was passed, it became illegal for employers to discriminate based on race;[4] however, income disparities have not flattened out.
Studies performed by Leslie Mcall[10] indicate immigration population density is one of the leading factors in racial wage inequality.
Barriers such as language show that such large dominance of immigrant population in such sectors only breed competition between lower-earning groups, further lowering average wages for such families.
This trend reflects how lighter skin can grant individuals closer access to the privileges associated with whiteness, irrespective of their racial categorization.
[17] These statistics challenge the beauty standards that favor lighter skin, implementing anti-discrimination policies and fostering awareness and education about the harmful effects of colorism.
$4.22 may seem like a relatively small amount but over time it can accumulate which proceeds to have a substantial impact on financial stability and quality of life.
Those who possessed financial and human capital, such as education, succeeded in the new economy because the money and skills they had to offer were in short supply.
[6] The increase in overall wage inequality created by the new economy's lower demand for physical labor disproportionately affected minorities as well.
Being the second major factor to wage inequalities, Black men and women that move into the United States are considered unskilled according to the American education standard.
[6] A study conducted by Grodsky & Pager (2001) found that individual attributes, such as human capital and region, account for just more than half of the black-white wage gap, and an additional 20 percent is due to different occupational distributions between blacks and whites.
[20] The remaining portion of the wage gap not accounted for by individual and occupational distribution factors is thought to be due, at least in part, to discrimination.
[5] The Civil Rights Act of 1964, which forbade employers from discriminating on the basis of race,[4] was one of the earliest and greatest influences on the black-white wage gap.
[15] Kenneth Couch and Mary C. Daly report in their 2002 study on black-white wage inequality that these decreases are the result of greater occupational diversity and reductions in unobserved or residual differences.
A study conducted by Major G. Coleman (2003) reports that as black and white men have more similar competitive performance ratings, racial wage differences increase rather than decrease.
[20] Using statistical regressions, they found that human capital, region, and marital status account for 55 percent of the wage gap difference.
A study conducted using 1980 census data on income that controlled for age, education, English language ability, nativity, and State/Metro residence, found a wage gap of 10 percent still existed for Hispanics compared to non-Hispanics.
The typical trend in wages for Hispanic subgroups is that Cubans do the best while Puerto Ricans do the worst, being severely disadvantaged even in comparison to blacks and American Indians.
[24] Thus, the relative success of Cubans can be attributed to the fact that they invest in United States education and labor market skills faster and to a greater degree than other Hispanic groups.
[24] Based on an analysis of Hispanic wages over the past six decades, Borjas concludes that, due to differing incentives to assimilate and other factors, Puerto Rican immigrants will wait twenty-five years before the assimilation process is reflected in their wages and Mexican immigrants will wait fifteen years.
[27] Asian Americans are the only minority in the United States whose median income is higher than whites, assuming Pacific Islanders are not counted as a separate race.
[16] By 2010, the median household income for Native Americans was $38,806, compared to $51,914 for the total population, making them the second poorest race on average after African-Americans ($35,341).
[40] ThinkNow research found that even after completing undergraduate and graduate degrees, Black and Hispanics made much less money than white workers with the same, or even less education.
Some of the policies that were proposed to confront the racial wage gap were reinforcing employment anti-discrimination laws, providing tax incentives for minority entrepreneurs, performing pay audits, banning the right to ask applicants about their salary history, and upgrading technology to assist during hiring decision to eliminate possible bias.
During COVID, the U.S relied on minority women to provide essential worker services and keep the economy going, however also caused a lot of job losses within the group.
These types of jobs are usually able to offer different shifts throughout the night and day, making it more accessible for these minority women to work part time in order to fulfill their obligations as caretakers in their own family, putting them at a financial disadvantage as well.
[20] Additionally, a larger percentage of the wage gap was found to be accounted for by the human capital characteristics of educational attainment and potential years of experience in the public than private sector.
[14] Sociologist Douglas Massey offers two solutions to alleviate wage inequality: greater investments in education and elimination of racial segregation.
[14] To tackle wage inequality specifically in companies, random job audits at the national, state, and local levels have been suggested.
[6] Ethnic and racial groups also differ in rates of homeownership, residential segregation, overall wealth, exposure to crime and toxic pollutants, and in access to power in the upper reaches of our society".
