How Income Inequality Affects Minority Workers

How Income Inequality Affects Minority Workers It’s no secret that white households in the United States take in significantly more income than black and Latino households do, fueling racial inequality. What’s to blame for this discrepancy? It’s not just that whites work in higher paying jobs than their minority counterparts do. Even when whites and minorities both work in the same field- management, for instance- these income gaps don’t disappear. Women and people of color continue to bring home less than white men do because of the pervasiveness of income inequality. A vast amount of research indicates that minority workers are literally being shortchanged in their paychecks. The Effect of the Great Recession The Great Recession of 2007 had an adverse effect on all American workers. For African  American and Hispanic laborers in particular, the recession proved devastating. The racial wealth gap that existed before the economic downturn only widened. In a study called â€Å"State of Communities of Color in the U.S. Economy,† the Center for American Progress (CAP) pinpointed just how much minority employees suffered during the recession. The study found that blacks and Latinos brought in on average $674 and $549, respectively, per week. Meanwhile, whites earned $744 per week, and Asians earned $866 per week during the fourth quarter of 2011. Contributing to this pay gap is that higher numbers of African Americans and Hispanics than whites and Asians worked in jobs that paid minimum wage or less. The amount of black minimum wage workers rose by 16.6 percent from 2009 to 2011, and the number of Latino minimum wage workers rose by 15.8 percent, CAP found. On the other hand, the number of white minimum wage workers rose by just 5.2 percent. The amount of Asian minimum wage workers actually dropped by 15.4 percent. Occupational Segregation In February 2011, the Economic Policy Institute released a paper about racial disparities in income called â€Å"Whiter Jobs, Higher Wages.† The paper suggests that occupational segregation contributes to racial gaps in the pay scale. EPI found that â€Å"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.† Black men are extremely underrepresented in â€Å"construction, extraction, and maintenance† jobs but overrepresented in the service sector. Turns out the former employment sector pays quite a bit more than the latter service sector. Disparities Remain When All Else Is Equal Even when African Americans work in prestigious fields, they earn less than whites. Black Enterprise magazine conducted a study which found that blacks with degrees in computer networking and telecommunications will likely earn $54,000, while their white peers can expect to take home $56,000. The gap widens among architects. African American architects average a salary of $55,000, but white architects average $65,000. African Americans with degrees in management information systems and statistics are especially shortchanged. While they typically earn $56,000, whites in the field earn $12,000 more. How Women of Color Are Shortchanged Because they suffer from both racial and gender barriers, women of color experience more income inequality than others. When President Barack Obama declared April 17, 2012, â€Å"National Equal Pay Day,† he discussed the wage discrimination that minority female workers specifically face. He remarked, â€Å"In 2010- 47 years after President John F. Kennedy signed the Equal Pay Act of 1963- women who worked full-time earned only 77 percent of what their male counterparts did. The pay gap was even greater for African American and Latina women, with African American women earning 64 cents and Latina women earning 56 cents for every dollar earned by a Caucasian man.† Given that more women of color head households than white women do, these discrepancies in pay are truly worrisome. President Obama said that equal pay is not only a basic right but also a necessity for women who serve as the primary breadwinners in their homes. It’s not just women of color who suffer from wage discrimination, of course. The Economic Policy Institute found that in 2008, black men earned just 71 percent of what Caucasian men earned. While black men earned on average $14.90 per hour, whites earned $20.84 per hour.