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Racial Identity in US – A measurable, significant, and persistent predictor of labor market outcomes

According to the Center for Assessment and Policy Development, racial equity is the condition that would be achieved if one’s racial identity no longer predicted, in a statistical sense, how one fares.

In reality, statistical analysis often reveals that racial identity is a measurable, significant, and persistent predictor of labor market outcomes. Let’s pause and think about that for a moment. Why should racial identity—something as arbitrary and superficial as physical appearance (skin color)—be statistically correlated with one’s likelihood of being employed or how much they are paid for their labor?

Black workers are far more likely to be unemployed than white workers—typically twice as likely (Figure A). Even at the historically low rates of unemployment reached in 2019, this was the case overall and at nearly every level of education. In practical terms, this means that Black workers are not just twice as likely to be unemployed as similarly educated white workers but are often more likely to be unemployed than less-educated white workers.

Among the employed, Black workers face large pay disparities relative to white workers (Figure B). These Black–white wage gaps have grown over the last 40 years (1979–2019) and are largely unexplained by factors associated with individual productivity. In 2019, the average hourly wage of Black workers was 26.5% less than that of white workers (dark blue line). Relative to white workers with the same education, of the same age and gender, and living in the same geographic division, the gap was 14.9% (light blue line, regression-adjusted gap). In other words, less than half the observed Black–white difference in average hourly wage is explained by the main factors presumed to determine pay.

Chosen excerpts by Job Market Monitor. Read the whole story @ Racism and the Economy: Focus on Employment | Economic Policy Institute


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