Economists: The Racial Wage Gap Is Getting Increasingly Worse by Connor D. Wolf

Economists warned during a panel discussion Tuesday that black workers are being paid less than their white colleagues at an increasing rate.

Research has shown there has been a wage gap between white and black workers for decades. New data shows that the wage difference has been getting increasingly worse. The Economic Policy Institute (EPI) hosted a panel of experts to discuss the trend.

Racial Wage Gap
Image source: Ian D. Keating- Flickr
Racial Wage Gap

“The black-white wage gap is larger now than it was in 1979,” EPI Economist Valerie Wilson said. “It’s also important to understand the context of this expansion and to understand that this expansion has not occurred in a vacuum. There has been growing economic inequality, and near stagnation of hourly wage growth for the vast majority of American workers.”

EPI hosted the panel discussion to correspond with new research it released on the racial wage gap. Its report found the wage gap has increased from  3.6 percent in 1979 all the way to 11.8 percent in 2015. Wilson adds the study adjusted for outside factors to determine how much of the gap is due to discrimination.

“We know the composition of black workers in the labor market isn’t identical,” Wilson said. “So we control for these factors as well and that’s how we measure what we call an adjusted wage gap.”

Research elsewhere has come to different conclusions on the racial wage gap. The Pew Research Center found the wage gap has barely changed between black and white workers since 1980. Additional research has found it’s difficult to determine how much the gap is due to discrimination as opposed to other factors. Harvard Prof. Richard  Freeman expressed frustration that past efforts hadn’t even reduced the gap.

“When you start to look for policies, it’s a much harder kind of thing,” Freeman said during the panel discussion. “It’s like we found some way to stop some cancer and then three years later they’re regrowing.”

Wilson noted that black women are doing better compared to black men but were still behind their white counterparts. The wage gap also appeared to get worse among those workers with higher educations. Wilson notes the gap between educated workers seems to defy conventional thinking.

“Racial gaps have grown the most among the most highly educated,” Wilson stated. “I think that’s one of the more shocking findings in the report because there is the perception or idea that education is the solution to everything.”

Wilson notes that slow economic growth is only exacerbating the problem. Some research has shown that wages for all workers have been stagnant over the decades when adjusted for inflation. Wilson adds that the wage gap isn’t the result of white wages growing faster but instead that black workers are making less over time.

“A growing wage gap would be problematic at any time,” Wilson noted. “I think under these conditions, in particular, the costs are even greater because we’re talking about losses in an expanding gap as opposed to a growing gap when everyone is moving up at a faster rate.”

Rutgers University Economist William Rodgers says its an issue that people should be paying particular attention to. He adds that the presidential candidates should at the very least consider the problem before moving onto a plan to fix it.

“I would just start with conceptualizing and thinking about the problem,” Rodgers stated. “We know what to do. It comes back to what is the political will.”