The unemployment rate is near historic lows, the job market is tight, and wages have been rising steadily.
But since the Great Recession, wage gains have varied significantly by race, with African Americans’ earnings nearly stagnant over the period, while other groups’ median pay has risen between 5 and 10%.
According to “usual weekly earnings” data reported every quarter by the Bureau of Labor Statistics, from 2007 to 2017 inflation-adjusted median weekly earnings rose 1.2% for African American workers, 5% for white workers, 6.1% for Asian workers, and 9.9% for Hispanic workers, after accounting for inflation. The weekly wage increase over the decade for all workers was 4.5% after accounting for inflation. 2017 is the latest year for which annual wage data in the series are available.
Valerie Wilson, director of the program on race, ethnicity and the economy at the Economic Policy Institute, attributes the racial wage-gain disparity to numerous factors, including lower educational attainment and higher unemployment among blacks than most other groups, and racial discrimination in hiring.
Wilson said that minimum wage hikes instituted by state and local governments in recent years have helped low-wage workers of all races. But, she added, these places are not where many African Americans live.
“African American workers haven’t benefited as much as they would from a federal minimum wage increase,” said Wilson, “which would get into those southern states that have about 60 percent of African American workers, and are much less likely to increase minimum wages.” The federal minimum is $7.25 per hour and hasn’t increased since 2009.
Terrence Wise is 31, African American, and works at a McDonald’s in Kansas City, Missouri. He said the state’s recent minimum wage hike to $8.60 per hour has helped raise the bar for fast-food and other low-wage workers. But he said what has benefited him even more is organizing for the worker-advocacy group Fight for $15.
“I asked my employer for a raise for like three years,” said Wise. “And after the first time I went on strike, I got a raise the very next day.” Wise has three school-age daughters and now earns $11 per hour, which he called “above minimum wage, but not a living wage.”
Gender disparities are likely responsible for some of the wage-lag for African Americans, said Margaret Simms, a visiting fellow at the Urban Institute. Black women have higher labor-force participation than black men, but they earn less on average. And, Simms said, “for African American men, a larger percentage of the population is incarcerated, while labor-force participation of men who are non-institutionalized — that is, not incarcerated and not in the military — has gone down.”
Gary Hoover, chair of economics at the University of Oklahoma, said he’s surprised African Americans’ wages have risen so little in recent years compared to other racial and ethnic groups.
“This has been a tremendously long expansion,” said Hoover, “and if it takes this long even to get these modest gains, there seems to be something systematic going on.”
Correction (April 18, 2019): A previous version of this story misspelled Terrence Wise’s name. The text has been corrected.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.