Thursday, December 15, 2016

Little changes in Black wages

The earnings gap between African-American men and white men is the same now as it was 60 years ago for the median worker, according to a new study from University of Chicago economist Kerwin K. Charles and Duke University economist Patrick Bayer.

“It’s astounding that, in terms of economic rank, a black man in the middle of his economic distribution is no closer to his white counterpart in terms of earnings than was his grandfather,” Charles said.

Historically, most economists have focused on average earnings when comparing black and white wage differences—an approach that blurs the increasing divergence between the highest and lowest earners. Charles and Bayer decided to look at the data in a different way, ranking black and white men from 0-100 based on their earnings and then comparing them using such a scale. The researchers also included “zeroes” in their analysis—men who are not part of the workforce and who have zero earnings. The resulting analysis captures the impacts of rapidly rising income inequality in the United States and provides a much starker representation of the widening gap between most African-American and white men. A major factor in the new findings was the inclusion of the zeroes because they factor in a rapid rise in the number of men in their prime earning years who are not participating in the workforce. Today, roughly one of every eight U.S. males considered prime earners is not working. That number is one of three for African-American men. “Zeroes are growing for everybody, but they are growing more for blacks, and they are growing more for blacks in every dimension,” Charles said.

African-American men also have been hit hard by the collapse of U.S. manufacturing, which once was a leading source of middle-income jobs for those with lower levels of education. “Back in 1940, there were plenty of jobs for men with less than a high school degree,” Bayer said. “Now education is more and more a determinant of who’s working and who’s not. The labor market for low-skilled workers has basically collapsed.”

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