50 years after the riots: Continued economic inequality for African Americans
Anniversaries of major events are nearly irresistible opportunities to reflect on the past, often with the hope that there has been some progress. So it is this year, 50 years after the Kerner Commission Report on Civil Disorders found systemic inequality and racial discrimination to be at the root of riots across America.
In a new report, Janelle Jones, John Schmitt and I present statistics showing what life was like for African Americans in this country 50 years ago compared to now. That document is a straightforward, unfiltered presentation of the facts, covering a wide range of economic, social, and health outcomes. In the spirit of reflection, I want to use this blog post to focus on racial economic inequality in the labor market, which directly affects approximately 20 million African Americans who get up every day and either go to work or go to find work.
The bottom line is simple. Despite decades of policies, programs, protests and outstanding achievements by African American men and women in many aspects of American life, race far too often remains a deciding factor in the economic status of African Americans relative to whites.
Great strides have been made toward raising educational attainment among African Americans and closing the education gap relative to whites, especially with regard to completing high school. In 1968, just over half (54.4 percent) of African American adults age 25-29 were high school graduates, compared to nearly three-quarters (75.0 percent) of whites. In 2016, 92.3 percent of African American adults age 25-29 were high school graduates with 22.8 percent having gone on to complete a bachelor’s degree or higher (up from 9.1 percent in 1968). Among whites, 95.6 percent are high school graduates and 42.1 percent have a bachelor’s degree or higher (up from 16.2 percent in 1968).
The important thing to understand about education is that it is undeniably important for economic mobility—at higher levels of education, African Americans have lower unemployment rates, and higher earnings than they would otherwise. Believe me, I do all I can to encourage and prepare my children—and any others who will listen—to get a college education. But education has not been enough to eliminate racial economic inequality. This is reflected in the persistent gaps in unemployment rates, median hourly wages, median household income, and poverty rates.
Since the Bureau of Labor Statistics began reporting the black unemployment rate in 1972, it has almost always been about twice the white unemployment rate—in good economic times and in bad, as well as at every level of education.
Comparing unemployment rates by education we find that in 2017, having a bachelor’s degree substantially reduced the unemployment rate for African Americans, from 9.5 percent for those who only had a high school degree to 4.1 percent for college graduates and 3.0 percent for those with advanced degrees. However, African Americans with advanced degrees still had an unemployment rate higher than whites with a only a bachelor’s degree (2.3 percent) and African Americans with a bachelor’s degree had an unemployment rate that was closer to the unemployment rate of whites with only a high school diploma (4.6 percent).
Annual average unemployment rates, by race and education, 2017
|Highest education attained
|Less than high school
Source: EPI analysis of Current Population Survey microdata
In addition to having higher rates of unemployment than whites with the same level of education, black workers are also paid less than white workers with the same level of education.
Although the wage gap between black and white workers narrowed during the latter part of the 1960s through the 1970s due to the passage of important civil rights legislation, it has gotten larger since 1979. This is true even among those with the same levels of education and experience and living in the same region of the country. In fact, despite the educational gains of African Americans, black workers were further from parity with white workers in 2017 than in 1979 at every level of education except the small group of workers who did not complete high school. The expansion of the black-white wage gap can be attributed to three trends: 1) limited wage growth among middle- and low-wage workers (where African Americans are overrepresented) 2) above average growth among the highest wage workers (where African Americans are underrepresented), and 3) growing racial inequality in hiring, pay, and opportunities for promotion.
Black-white wage ratio, by education, 1979 and 2017
|Back-white wage ratio by education
|Less than high school
Source: EPI analysis of Current Population Survey microdata
It’s important to make the point here that racial disparities in individual labor market outcomes, like unemployment and wages, don’t just have consequences for individuals. Rather, these disparities have implications for entire households, as reflected in racial differences in household income. In 1968, the median black household earned 63 percent of the income the median white household earned in a year. In 2016, the median black household earned just 61 percent of median white household income.
Given that we measure poverty by whether a family has sufficient income to meet basic material needs, disparities in income translate into higher rates of poverty for African Americans relative to whites. In 1968, with a poverty rate of 33.5 percent, African Americans were three times more likely to live in poverty than whites. In 2016, the black poverty rate—22 percent—was only slightly lower than it was almost 50 years ago, but still 2.5 times higher than the white poverty rate.
Addressing these economic problems begins with acknowledging the fact that they are the inevitable product of racism. The next step is to make the long term commitment to change the structures and policies that continue to block further progress. These changes will require big, bold policies and actions that shift the balance of power in multiple areas.
I am not proposing in any way that I have all the answers here. But, at a minimum, taking the following steps to shift the balance of power with regard to inequalities in employment and pay could meaningfully improve economic conditions for African American workers and their families.
- Consistently enforce antidiscrimination laws in the hiring, promotion, and pay of women and minority workers. This requires greater transparency in how these decisions are made, which includes requiring employers to report to the EEOC information about what they pay their employees by job category, sex, race, and ethnicity.
- Address the broader problem of stagnant wages by raising the federal minimum wage, creating new work scheduling standards, and rigorously enforcing wage laws aimed at preventing wage theft.
- Strengthen the ability of workers to bargain with their employers by combatting state laws that restrict public employees’ collective bargaining rights or the ability to collect “fair share” dues through payroll deductions.
- Push back against the proliferation of forced arbitration clauses that require workers to give up their right to sue in public court.
- Require the Federal Reserve to pursue monetary policy that targets full employment, with wage growth that matches productivity gains.
Finally, an important caveat to interpreting the economic data I’ve described is that it only refers to the non-institutionalized population: those in our nation’s prisons and jails are not included in these estimates. The rise in mass incarceration since the 1980s is a trend that has disproportionately impacted African Americans, both in terms of rates of incarceration, its damaging effects for individuals, families and communities, and our ability to accurately measure the economic status of the broader African American population. Therefore, criminal justice reform must also be a part of any movement for economic justice.
Over the last 50 years, we’ve made some progress, but there is a long way to go. The power dynamics of the economy need to change for meaningful progress toward economic equality.
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