How the Racial Wage Gap Affects Black Communities  

Overworked and underpaid is a truism African Americans have lived with since their time in America.

Beginning with free labor, Black workers have been responsible for building ornate structures like the White House, Harvard Law School and Georgetown University. Even Wall Street derives its name from slaves. On the backs of Black bodies, America’s economic infrastructure was built with no room for the builder. As generations have lived and died, the Black workforce continues to be a cycle of more work and less pay. Despite earning less than almost all demographics, Black workers also display an unyielding loyalty to their workplace. Easily building tenure, paychecks for Black employees rarely reflect the experience and skill set.  


A 2020 study conducted by Michigan State University economists suggests that since the 1980s, wages for Black employees have fallen when compared to that of their white counterparts. In the study, the author finds Black men earned roughly 20 percent less in recent years than 40 years ago in Michigan. Black women are found to earn 15 percent less. 


“Forty years ago, Black workers earned more in Michigan than in any other state,” says Charles Ballard, author of the study and MSU economics professor. “Since then, in much of the country, Black workers’ earnings at least kept up with inflation, but white workers’ earnings grew faster.” 


Economics professor Charles Ballard   


Michigan leads the nation in the decline of earnings for Black workers. The study conducted by Ballard and MSU colleague John Goddeeris, takes its data from the late 1970s and early 1980s. During this time, Black workers in Michigan were paid more than Black workers across the state. Now, the wage gap may be too large to close.  


“If the trends of the last 40 years continue, the answer is never. The first thing that would have to happen is that the trends of the last 40 years would have to stop, and then reverse themselves. Even if that were to happen right away, I think, unfortunately, that it would take many decades for the earnings of Black workers to achieve parity with the earnings of white workers in Michigan,” says Ballard.  


The pay gap hits Black women two-fold. Gender and race both play a role in determining the pay scale for African American women. March commemorates Equal Pay Day. The day marks how many additional days a woman works to make the same as a man. For African Americans, equal pay has yet to come and may be long-awaited. Making less than all demographics, Black women will need more than one day to catch up to the pay rates of white women and other counterparts.  


“Forty years ago, the median Black woman in Michigan was actually paid more than her white counterpart, but Black workers in Michigan have lost a lot of ground since then, and their earnings have fallen below the earnings of Black workers in some other states,” says Ballard. “The earnings of Black workers have fallen relative to the earnings of white workers in many parts of the country in the last 40 years, but the relative losses have been faster in Michigan than anywhere else.” 


The Coronavirus helped to unearth a lot of truths surrounding businesses, economic stability and financial disparities for communities of color. The federal government is stepping in to try and bridge the wage gap. In January, members of Congress reintroduced the Paycheck Fairness Act. This legislation, together with the Equal Pay Act of 1963, will help to close the gender wage gap for not only women, but women of color.  


“For America’s working women, particularly women of color, decades of economic insecurity and pay inequality have been made even worse by the ongoing Coronavirus crisis,” said Speaker of the House Nancy Pelosi. “Equal work deserves equal pay, and with the re-introduction of Chair Rosa DeLauro’s Paycheck Fairness Act, Congressional Democrats will once again work in a bipartisan way to secure justice for working women, advance progress for families and strengthen the foundations of our communities and our nation. This legislation is a key step in Democrats’ efforts to unleash the full economic power of women in our country so that we can Build Back Better and ensure.” 


Closing the wage gap for Black workers will not happen overnight. While there are advances occurring in the wage gap for African Americans, the progress is slow. Deliberate planning and initiatives targeting Black pay can help bring communities of color up to par with their business equals.  


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