Black workers stopped progressing in wages. It's Racism (Released in 2021) (2023)

William Spriggs, a professor at Howard University, wrote aopen letterlast year to his business colleagues. In response to the police killing of George Floyd in Minneapolis, he began the letter with a question: "Is now a teachable moment for economists?"

Hitting what he took to be an attempt to deny itracial discrimination,dra branchesHe argued that economists should stop looking for a reason other than racism, a "missing variable" to explain why African Americans continue to fall behind in the economy.

"I hope this moment will cause economists to pause and reconsider how we study racial differences," wrote Dr. Spriggs who is black. "All too often in the mainstream conversation, African American economists are forced to prove that African Americans are equal."

After a year in which calls for racial justice found new resonance, Dr. Spriggs and others question a long-held economic tenet: that pay differentials largely reflect skill differentials.

Although African Americans lag behind whites in terms of education, this disparity has narrowed significantly over the past 40 years. Stillwage gapit didn't move

In 2020, the typical full-time undeclared workerearned about 20 percentless than a typical full-time white worker. And black men and women are far less likely to have jobs than white men. For example, the median income for black men in 2019 was just 56 cents for every dollar white men made. The difference was greater than in 1970.

Black workers also earn lower wages relative to their skills. OneAnalyse des Economic Policy Institute, a liberal think tank, found that black workers, whether they have a high school diploma or higher, earn about 80% of the income of a similarly educated white worker.

"I'm not denying that education is important, but I defend how important it is," he said.darrick hamilton, economics professor at the New School in New York. “The fact is there is a finite number of jobs and we classify them by power. Race is a determining factor.”

Think information technology, which offers some of the highest-paying jobs in the country. African Americans win aroundevery tenth computer science graduate nationwide. In contrast, they make up just 2.6 out of every 100 IT workers in the San Francisco area, including Silicon Valley.

Despite the credentials many African Americans have in the field, Dr. Spriggs in an interview: "Silicon Valley says, 'Yes, but they don't qualify.'

But despite all the evidence of racial differences, many economists say employers' racial bias cannot fully explain what goes on in the workplace. The notion that discrimination alone determines the fate of black workers in the workplace, their jobs, and their wages is at odds with the way American society has changed over the past half century.

Put simply, if racism is why black workers don't get paid, said Erik Hurst, an economics professor at the University of Chicago's Booth School of Business, why did they make such great strides after World War II? the wage gap with whites, while segregation and other explicit barriers were still widespread? And why has this progress stalled, even as racial hatred has subsided through various measures over the years?

For example, the proportion of whites supporting interracial marriage rose from 48% in 1965 to 87% in 2013, when Gallup last asked the question. The proportion of whites who said they would vote for a black presidential nominee rose to 87% 96 percent in 2020 from 77 percent in 1983 and 38 percent in 1958. The responses to many other questions collected by the General Social Survey , a long-standing academic attempt to understand the views of Americans, suggest that racial prejudice has been on the decline in recent decades.

Most of the achievements of African Americans in the workplace occurred between the 1940s and 1970s, when racial prejudice was much more pervasive in society. So they got stuck.

"There was a convergence between blacks and whites, but then it stopped," said Dr. Hurst, who is also associate director of the Becker Friedman Institute for Economics, which sponsors a podcast that I host. "The question is why".

Industrial change offers a plausible answer. Think of all the black workers who came from the South for high-paying jobs in the auto plants, steel foundries, glass and rubber factories of the Northeast and Midwest. They have been hit by globalization and large-scale automation.

Patrick L. Mason, an economics professor at Florida State University, noted how the recession and the decline of the defense industry made things so bad in California in the early 1990s that African American families moved back to Mississippi. "Think about how bad the world has to get for people to come back from California to Mississippi," he said.

That's what researchers at Purdue University foundJapan's increased imports in the 1970sit hit black industrial workers particularly hard, even as white industrial employment increased. "Losses were focused on black high school dropouts and gains on white college graduates," the authors write.

What has changed suggests thatrecent researchvondoctor hurtsand others, how business evaluates different skills: The rise of the information economy over the past half-century has benefited tertiary-educated workers, particularly those best at abstract thinking and problem-solving. .

Despite the educational achievements of African Americans for half a century, the workers hired for these jobs remain overwhelmingly white.

In 1960, 20% of black men had graduated from high school, significantly less than 50% of white men. In 2014, high school graduation rates for men of both races were nearly 90%. During this time, however, pay for jobs that only required high school education stagnated.

In 2014, a good salary required a college education. And while the gap has narrowed significantly over the past five decades, 33% of white men have at least four years of college, compared to 22% of black men. (The difference between white women and black women is only slightly smaller.)

Wage Gap Researchby Kerwin Kofi Charles, dean of the Yale School of Management, and Patrick Bayer, professor of economics at Duke University, concluded that black men's educational success in the labor market is offset by "an increasing penalty for racial educational disparities, rather than to remain ".

Hurst MD, Yona Rubinstein of the London School of Economics, and Kazuatsu Shimizu of the University of Chicago recently published research broadly consistent with these findings. It addresses the changing demand for specific skills rather than education as a whole. Scholars identify the types of tasks workers are required to perform in various jobs based on Department of Labor descriptions. For example, software programmers use a lot of abstract thinking and analytical skills; Waiters and waitresses cultivate more social contacts; Teachers require both.

They concluded that the development of the racial wage gap was driven both by changes in the jobs performed by black and white workers and by the way the economy pays for those jobs.

Their findings support the idea that racial prejudice among white Americans, while still a commonplace reality, plays less of a role than it did half a century ago.

In the 1960s, occupations that required a lot of social contact were largely restricted to whites. In many places, a white customer would not be served by a black waiter or have their hair cut by a black barber. In 2018, researchers found that black men's jobs involved about the same amount of social contact as white men's.

In contrast, documenting Dr. Hurst and her colleagues made very little progress by black men in taking jobs that depend heavily on abstract tasks during this period. And those were the jobs on the winning side of technological change.

Around the 1980s, as information technology entered the American economy, the emphasis on abstract tasks increased. As well as their salaries. Most of the gains went to white workers because while African Americans have made strides in education and other skills, whites continue to win.

African Americans make up 7% of computer and information systems managers, 6.2% of software developers, and 6.8% of attorneys. At the other end of the labor market, they make up 22% of caregivers, 31% of security guards, and 21% of couriers and couriers.

"The skills gap between blacks and whites has narrowed and discrimination has decreased," said Dr. Hurst. "But gaining abstract skills favored whites over blacks." These forces almost cancel each other out.

dr Spriggs concedes that this interpretation "has a built-in plausibility." However, he argues, the role of employer discrimination is underestimated. "The most coveted jobs go to white people," he said. "Why don't you think that's planned?"

The pressing question is how to build a road to equality. It is important to get the diagnosis right. This will determine how much the policy response should focus on discrimination in the workplace, education, or other barriers that hold back African American workers.

The new study places the situation in the larger story of American inequality, which has worsened as the wages of highly skilled workers have far outpaced those of the less educated, black and white. AsKevin lang, an economics professor at Boston University, said that increasing inequality in society will increase racial inequality, virtually whatever its cause.

The barriers created by racial discrimination are undeniable but complex. "The differences are piling up," Lang said. "Income differences lead to neighborhood differences, which lead to educational differences, which in turn lead to differences in the labor market." Broadly speaking, he argued, "we as a society need to find a way to correlate the things we care about and race cancel."

But when it comes to the labor market,dr AS Carlos from Yaleargues that the most promising strategies are not specifically about race. "By far the most important forces driving wages at the median and below have been race-neutral forces," he said.

Strengthening unions, whose main job is to push for higher wages, would narrow the racial pay gap, he suggested. The same would happen if the minimum wage were raised.

“What if there were a national movement to fix institutions whose impact is being felt disproportionately at the grassroots level?” wondered Dr. Carlos. He noted that America's racial divides might not be eliminated. But it could go a long way.