Quick Hit Ellyn Fortino Thursday November 3rd, 2016, 3:45pm

Report: Racial, Class Inequality A ‘Dual Penalty’ On Black Workers’ Wages

Wage growth among African-American workers has taken a double hit since 1979 due to the growing black-white wage gap and overall wage stagnation, according to a new paper from the Economic Policy Institute. 

The left-leaning think tank finds that median hourly wages for black workers “could be 87 percent higher in the absence of racial and class inequality.”

Researchers examined the 1979 to 2015 time period, during which “overall median wages did not track productivity growth and racial wage gaps did not close, but instead widened.”

“This kept wage growth for black workers much, much lower than it would have been otherwise,” the report adds.

The wage gap between the median black and white worker was 26.2 percent last year. That translates into median hourly wages of $14.14 and $19.17 for black and white workers, respectively. 

Racial wage gaps are wider today than in 1979 due largely to discrimination and growing income inequality, EPI’s research showed.

If the black-white wage gap had closed, African-Americans’ median hourly wages would have increased by $5.03 in 2015.

As for the productivity-pay gap, median wage growth for all workers “has fallen far short of productivity growth” since 1979, the report noted.

If both the black-white wage gap closed and median wages grew with productivity, the median African-American worker’s hourly wages would have increased 87.2 percent last year. Specifically, black workers’ median hourly wages would have been $12.33 higher, increasing from $14.14 to $26.47.

Under that scenario, the median white worker’s hourly wages would have also increased 38.1 percent, or $7.30.

“By addressing both class and racial inequality, all workers are made better off, with much larger gains for African Americans because of the dual penalties imposed by class and race,” the report reads.

Valerie Wilson, director of EPI’s Program on Race, Ethnicity, and the Economy, wrote the report. 

“Wage stagnation has hit African American workers particularly hard,” she said in a statement. “Because black workers tend to cluster on the lower end of the wage distribution, they have been systematically disadvantaged by the disproportionate growth in wages at the higher end of the wage distribution.”

Wilson added, “In order to help all workers, particularly working black families, reach full economic prosperity, wages must be raised across the board. If we continue on the same path as we have since 1979, the benefits of racial equity will be severely limited.”


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