Racial wage gap in the United States - Googlecloud12/Security-categories-in-India GitHub Wiki

In the United States, despite the efforts of equality proponents, income inequality persists among races.[1] Asian Americans have the highest average income, followed by Whites, typically followed thereafter by Hispanics, Blacks, and finally Native Americans. A variety of explanations for these differences have been proposed—such as differing intelligence, access to education, and experience of discrimination—and the topic is highly controversial.

When the Civil Rights Act of 1964 was passed, it became illegal for employers to discriminate based on race;[2] however, income disparities have not flattened out.[3][4][5] After the passage of the act, the wage gap for minority groups narrowed, both in absolute difference with white wages and as a percentage of white wages, until the mid-1970s; at this time, progress for many racial minorities slowed, stopped, or reversed.[4] As of 2009, the median weekly wage for African American and Hispanic workers was about 65 percent and 61 percent that of White workers, respectively. Asian workers' median wage was about 101 percent that of white workers.[6] Overall, minority women's wages in comparison to those of white women are better than minority men's wages when compared to those of white men.[4]

Knowing the inequalities in the wages of various races is useful for understanding the overall racial inequality in the United States because of the integral role that wages play. Wages from the labor market are the primary source of income for most families in America,[4] and income is a socio-demographic status indicator that is important in understanding the building of wealth.Globalization

The globalization of the United States' economy in the 1970s and 1980s caused a shift in the U.S. income distribution.[10] As the United States joined the global market economy, three outcomes occurred. Those who possessed financial and human capital, such as education, succeeded in the new economy because the money and skills they had to offer were in short supply. Those who possessed only labor did not fare well because cheap, physical labor was in oversupply in the global market.[10]

In the new globalized economy that formed, much of the United States' manufacturing was exported, which affected most adversely the group of Americans in the lowest section of the education distribution, a section in which minority groups are overrepresented.[4] The increase in overall wage inequality created by the new economy's lower demand for physical labor disproportionately affected minorities as well.[8] The economic restructuring also served to create structural barriers to improvement for those with the least education and skills.[4] Thus, the United States' shift to a globalized economy lead to greater income disparity between education groups, which, because of the uneven distribution of minorities in jobs and an overall increase in wage inequality, led to the wage gap between whites and minorities to increase. Geographic distribution

The distance between jobs and the location of minorities' homes affects the ability of minorities to find profitable work. Saskia Sassen found that the redistribution of manufacturing jobs out of central cities in the 1980s negatively affected the wage gap between blacks and whites because most blacks live in cities.[4] Foreign birth

A person of a minority race that is not born in the United States fares worse than those who are native born in terms of wages.[7] The worst affected are men and women from Japan and China and Filipino women. However, a study by Gwartney and Long (1978) found that there is a positive effect on economic outcomes for second generation immigrants, or the children of immigrants who are foreign born, which they believe means that there are specific traits of immigrant parents that are beneficial to the economic success of their children.[7] Client channeling

When wage gaps in occupations for blacks and whites are compared, it is observed that occupations that depend on social networking for success tend to have the largest racial disparities, while occupations in which success does not depend on the type of clients served tend to have the least racial disparities.[11] This difference has been attributed to employee channeling, or the assignment by white employers of minority employees to serve minority clients.[11] The implications of employee channeling for a black real estate agent, for example, would be that they disproportionately served black clients and neighborhoods, resulting in lower sales commissions. In this way, employee channeling, identified as a social form of discrimination, contributes to the wage gap.[11] Discrimination See also: Discrimination in the United States

When human capital, skills, and other factors contributing to the racial wage gap are taken into account, many researchers find that there is still a portion of the racial wage gap that is unexplained. Many attribute this to another factor: race. Differences in wages due solely to race is racial discrimination. Through the use of statistical controls, sociologists and economists "ask whether a given person with the same background characteristics, such as level of education, region of residence, gender, marital characteristics, has the same earnings as a statistically equivalent person from a different racial/ethnic group".[4] Differences that emerge are taken as evidence of racial discrimination. Research has found wage and employment discrimination against blacks, Native Americans, Hispanics, and Asians; however, discrimination has been found to be a much larger contributing factor for black wages than wages of other races.[4]

A study conducted by Grodsky & Pager (2001) found that individual attributes, such as human capital and region, account for just more than half of the black-white wage gap, and an additional 20 percent is due to different occupational distributions between blacks and whites.[11] The remaining portion of the wage gap not accounted for by individual and occupational distribution factors is thought to be due, at least in part, to discrimination.[11]

Discrimination based on race has been found in other research as well. Seventy-four percent of employers in one study were found to be racially biased toward blacks, and blacks have been found to make lower wages than whites working in the same industry.[2] White Latinos earn higher wages than nonwhite Latinos, regardless of whether they are native or immigrant, suggesting possible discrimination based on skin color.[2] Additionally, many employers openly admit to discriminating against blacks and workers in the inner city, as one study by Kirschenman and Neckerman (1991) found.[2] Hiring audits have also found discrimination in the labor market. Blacks and whites who have the same credentials receive jobs at a rate of 3:1.[2]