Commentary | Race and Ethnicity

Why do black men earn less?

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EPI’s new paper, Whiter Jobs, Higher wages, shows that many black workers earn considerably less than their white counterparts. In fact, in 2008 black men earned only 71% of what white men earned. The median hourly wage for black male full-time workers was $14.90; for comparable white workers it was $20.84.

Of course, a true wage comparison should account for multiple factors, from level of education to chosen field of study. EPI recently published two reports and on February 28 hosted the discussion Understanding the low wages of black workers, in an attempt to untangle the wage discrepancy and all the factors that may contribute to it.

EPI’s research shows that educational and other differences can explain some, but not all of the discrepancy. “At the end of the day, it turns out that being black matters,” said Algernon Austin, Director of EPI’s program on Race, Ethnicity, and the Economy.

Darrick Hamilton, who co-authored the Whiter Jobs, Higher Wages paper with EPI’s Austin and Duke University Professor William Darity, suggested at the February 28 event that “occupational segregation” plays a large role in the wage gap.  “Nearly 90% of U.S. occupations can be categorized as racially segregated,” Hamilton said, citing data from the Whiter Jobs paper. The paper shows that, in occupations where black men are underrepresented, the average annual salary is $50,533; in occupations where black men are overrepresented, the average annual salary is $37,005, more than $13,000 less.

Notably, this trend of occupational segregation persists despite the jobs educational requirements. The paper shows, for example, that black men experience the most severe underrepresentation in the field of “construction, extraction, and maintenance,” which tends to be low-education-credentialed but which pays wages that are significantly higher than in the service sector. Black men are overrepresented in the lower-paying service sector.

Another example of this occupational segregation can be found in upper management. The paper shows that black men are “very underrepresented” as chief executives and legislators, although they tend to be “at least proportionally represented in a variety of managerial-type occupations.”

“That black men have the skills needed to be financial managers, human resource managers, public relations managers, and a variety of other types of managers suggests they also have the skills needed to be chief executives and legislators, since these two positions draw on many of the skills needed in these other management fields,” the paper notes. “Neither education nor skills are plausible explanations for the underrepresentation of black men.”

The Whiter Jobs paper also presents research that suggests black men are not “self-selecting” into these lower paying professions. It compares the college majors of black men and white men and finds no meaningful difference in the chosen courses of study.

Other panelists at EPI’s February 28 event attempted to isolate other factors that might explain some of the wage discrepancy. Pamela Loprest, Director of the Income and Benefits Policy Center at the Urban Institute, noted that black workers are less likely to hold jobs requiring “prior experience” or computer skills. But she said it was unclear whether that meant they had less access to certain skills or that employers were making certain assumptions about their skills. Another speaker, Patrick Mason, Professor of Economics and Director of the African American Studies Program at Florida State University, said the popular belief that black immigrants earn more than native black workers was false.

“Black immigrants do no better in the labor market than native-born blacks, and tend to do worse,” said Mason, whose research is presented in more detail in the paper The Low Wages of Black Immigrants, co-authored by Austin. Those findings are significant, Mason said. “If (black) Caribbean males were doing better, it might suggest that this (wage gap) was not due to discrimination…. But there is no evidence to suggest that (black) immigrants (as a whole) do well.”

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