Why Black People Are Paid Less Than White People

Decades after the Civil Rights Movement, Black workers earn significantly worse than White workers. The gap is either 40% or 25% depending on whether the average or median census data is used, but the fact remains that there is a large gap. Why is this the case? Is it due to discrimination or is it because of better skills and education levels among White people?

It is commonly argued that the difference is solely due to educational levels. After all twice as many White people have a college degree and twice as many Black people drop out of high school. Perhaps differences in skill lie behind the wage gap. Or maybe they work in different jobs?

It is helpful to examine some of the studies on the subject. Recently a study by the National Bureau of Economic Research found that Black people earned 33% less on average and this dropped to 15% when education and previous earnings are taken into account. It concludes that this 15% (40% of the difference) is due to racial discrimination. It is not the only study to have found this. Researcher in Penn State University found a gap of 19%, 11% still persisted after education and skill levels were held constant. Another paper found that even after excluding effects of age, sex, education and geography, the gap of 20% dropped to only 13%. However the gap was only 10% when occupation and industry is excluded.

This raises another question. What if the gap is due to different jobs? What if jobs pay equally but races simply choose different ones? On the other hand there may be discrimination here too, as Black people may face barriers to certain occupations, consigning them to poorer paying jobs. This highlights the difficulty in measuring discrimination and which variables should be excluded.

Studies have found other examples of discrimination. For example job applicants with “White” (like Emily or Greg) names get 50% more job offers than applicants with “Black” names (like Lakisha or Jamel).  Studies have found similar affects around the world (for one on Ireland click here)

All of this raises serious issues about race in America, and shines a new light on the debate over affirmative action. It is almost 60 years since Martin Luther King’s “I Have A Dream” speech in which he wished people would be judged on the content of the character not the colour of their skin. The large gap between the pay White people get and the pay Black people get (half of which is due to discrimination), shows that even today people don’t get the same pay for the same work.


Filed under Economics

13 responses to “Why Black People Are Paid Less Than White People

  1. blacksarelessproductive

    what about productivity differences.. when those are taken into account the wage gap becomes immaterial.

    • What makes you say that? What are your sources?

    • Matt

      Even if there are productivity differences that can be taken into consideration, from all of the years of making so much less were Black people really given a fair shot in the first place? By regulating the income based on race America can make sure that Black and Latino people can, for the most part, stay racially segregated. If you were FORCED to be raised in a low income ghetto would you have work ethic? Let’s also take into consideration the racism in schools. White children don’t have to worry about discrimination when they walk into a school building. However Black and Latino people do. Now when children can’t get an education without being discriminated against wouldn’t it be a little discouraging? And this discrimination even if not enough to discourage them would hurt their education, allowing for illiteracy in the ghetto. When there is no foundation for education living is even harder than check to check, and there is no choice for most of these Black and Latino people to turn to crime. Allowing for property value in these areas to plummet and furthering the segregation. You sir, should listen to a song by Immortal Technique called The Poverty of Philosophy. It may open your eyes a little on the subject.

      • James smith

        You said white people dont have to worry about entering a building such as a school. That’s false. There is discrimination on all races. If a white kid went into the “ghetto” then your saying he’s “unaffected”?

  2. i honestly think that if both man white or black are doing the same job then the pay should be the same ,it is not fair to both contribute the same effort but one is more rewarded than the other ,this whole “your salary is your privacy” cause this nonsence because black student work hard with nothing behind them but are still robbed while the white kids with inheritances go on and gain more and more wealth and thus a better lifestyle and inheritance for their coming children and educational trustfunds while we still have to fill the poverty gap at home with the little we get ,when will we prepare for our future children?

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  5. BW

    Blacks are less competent than whites,on average.This is a fact.It is a fact that is rooted in the genes.If blacks are,in fact,paid less,it is because they are less competent at performing the same task than whites are.I have personally observed this in my own workplace.I have seen black after black who was slower to perform tasks,who had more difficulty with problem-solving,who didnt stay on task,or who performed tasks with a greater frequency of errors than did whites.As long as this racial reality exists,the performance,wage and achievement gap will remain,as will “discrimination”,as employers exercise their right to secure the most viable and least costly employees possible.

    • Anita Price

      Did you take into consideration BW, the educational background while you were observing? African Americans are behind the 8 ball from birth. Substandard schools, books oudated, poverty in the homes. You should take a closer look before comparing.

  6. Rachel

    all opinion, not factual, BW.

  7. Brian

    Be careful you don’t twist studies to suit your own ends Robert.

    The Irish study you mention as discriminating against Blacks is one example. It’s not that Blacks are particularly discriminated against w.r.t. job applications in Ireland but ALL non-nationals irrespective of race are equally discriminated against.

    Here’s a quote from the paper: ” While international studies suggest that rates of discrimination in recruitment vary across different minority ethnic groups, this experiment does not find significant differences between African, Asian or German applicants. All three are around half as likely to be invited to interview as Irish candidates.”


  8. blacklivesmatter

    The productivity is usually the same. Whites don’t always work harder than blacks do, because race doesn’t matter about how hard you work.

  9. Rob O

    At my job in the airline industry, it was mostly white workers when I started in the 1990s. But now it is mostly black workers. Everybody makes the same salary no matter what color you are. But in the nineties when it was mostly white workers we had a lot more benefits. We also had a lot more overtime available. White workers were less likely to work short-handed. Black workers, it seems will accept worse treatment. The white guys that I started with in the 90s would not get a flight out on time if they were short-handed. The reasoning is that if they got a flight out short-handed there would be no reason to keep someone for overtime. I had a lead not too long ago who was a black guy. He got on the radio and broadcasted that he got his flight out 10 minutes early working one guy short. If you could get a flight out early working short, why the hell would they give you overtime to do it the next day. He was more interested in getting a pat on the head for doing a good job then he was in putting money in his pocket. Seems black people will accept a lot less than white people. That’s part of the problem

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