Summary: We begin the Trump years with generations of progress unraveling in the healing of America’s racial divide, with the likelihood of further deterioration quite high. We should understand what’s happening to better prepare for what’s next. A new study looks at the causes of the widening income gap between black and white Americans. It makes for enlightening but depressing reading.
Structural Change, Economic Rank, and the Evolution of Black-White Earnings Differences, 1940-2014“
By Patrick Bayer and Kerwin Kofi Charles.
National Bureau of Economic Research (NBER), November 2016.
“The economic fortunes of black Americans relative to those of whites have improved greatly since the end of the Civil War, but convergence has been both glacial and imperfect. Substantial racial differences in wealth, income, and numerous other economic markers remain and there are signs that the closing of some of these gaps has significantly slowed or even reversed in recent decades. In this paper, we study the evolution of black-white earnings differences among prime-aged men from 1940 through the Great Recession.”
Their findings are disturbing. Many Americans considered the progress of black Americans since WWII, and especially since the 1960’s Civil Rights bills to be among our finest accomplishments — belated recovery from the eras of slavery and Jim Crow. This adds to the research showing that progress has stalled. More specifically, the racial income gap for upper income black Americans has narrowed while the gap for those in lower income brackets has widened.
The reasons for this have been obscure. The racial gap in educational attainment and school quality have narrowed since WWII. Why have black men in the middle and lower income groups done so poorly? Their analysis concludes that the gains went to black men that managed to gain the education credentials that our society uses as the gateway to prosperity.
“…the progressively worse economic outcomes of black men in the lower and middle parts of the earnings distribution in recent decades have been primarily the result of structural changes to the economy that have devastated the working lives of low-skilled men …especially the strengthened relationship between education and economic rank.
“…These results suggest that much of the decline in racial earnings differences among high-skilled men has been the result of more equal access to quality higher education and high-skilled occupations and professions.”
Their analysis tells us a great deal more, but I’ll leave that for another day.
Their graphs tell a sad tale
Since 1980 the racial gap for the “average” working black man has stagnated after the impressive gains since WWII. The gap has widened for those not working in the sample year for any reason (e.g., unemployed, disabled, incarcerated).
The logical conclusion is that improving our education — at all levels — is a key to boosting national productivity and putting us back on track to improving racial harmony. Our system of largely local control and funding combines with our racially segregated housing to produce a system where those who most need lavishly funded education get the least.
We have a class-based “separate but equal” education system, with ugly effects on groups disproportionately at the bottom. Such as black Americans. Affluent conservatives say that education funding will not help, but ensure that their their children’s schools are adequately funded.
In this, as in so many things, America is regressing — moving back towards the dark days of our past. Many conservatives will rejoice. The consequences for America will be severe.
And the Raven, never flitting, still is sitting, still is sitting
On the pallid bust of Pallas just above my chamber door;
And his eyes have all the seeming of a demon’s that is dreaming,
And the lamp-light o’er him streaming throws his shadow on the floor;
And my soul from out that shadow that lies floating on the floor
Shall be lifted — nevermore!
— Ending the “The Raven” by Edgar Allen Poe (1845).
Abstract of the paper
“Studying working and non-working men, we find that, after closing substantially from 1940 to the mid-1970s, the median black-white earnings gap has since returned to its 1950 level, while the positional rank the median black man would hold in the white distribution has remained little changed since 1940. By contrast, higher quantile black men have experienced substantial gains in both relative earnings levels and their positional rank in the white earnings distribution.
“Using a new decomposition method that extends existing approaches to account for non-participation, we show that the gains of black men at higher quantiles have been driven primarily by positional gains within education level due to forces like improved access to quality schools and declining occupational exclusion. At the median and below, strong racial convergence in educational attainment has been counteracted by the rising returns to education in the labor market, which have disproportionately disadvantaged the shrinking but still substantial share of blacks with lower education.”
About the authors
Patrick Bayer is a professor of economics at Duke. Kerwin Kofi Charles is a professor of public policy at the U of Chicago.
About the National Bureau of Economic Research (NBER)
Founded in 1920, the NBER is the nation’s leading nonprofit economic research organization, a private, non-profit, non-partisan organization dedicated to conducting economic research.
The Bureau’s associates concentrate on four types of empirical research: developing new statistical measurements, estimating quantitative models of economic behavior, assessing the economic effects of public policies, and projecting the effects of alternative policy proposals. The NBER is supported by research grants from government agencies and private foundations, by investment income, and by contributions from individuals and corporations.
For More Information
- Congress did a great thing 50 years ago, but rot from that day has spread and taken root.
- Hard data from Harvard about police violence & race.
- Racism is the dark side of populism. Will it divide and defeat us?
- Donald Trump leads us back to the future, to the dark days of US history.
- Trump and the 1% lead America back to its past, to its dark roots.