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Facts about the Racial Wage Gap

Non-white Americans face economic disadvantages

10'000 Hours via Getty Images

Economic inequality has been on the rise in the U.S. for decades. One way to measure America’s economic inequality is to look at the income or wage gap across different demographics. While there is overall a growing chasm between the earnings of wealthy versus low-income families in the U.S., there is also a racial wage gap that exists that puts people of color at a further economic disadvantage.

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Racism’s many forms, including discriminatory workplace practices as well as institutional inequalities, cause an earnings gap between white and BIPOC (Black, Indigenous and people of color) Americans.

Hispanic or Latino people make up 18.5% of the population and Black people comprise 13.4% of the population. However, they are both under-represented in top income brackets and over-represented in the bottom tiers. For example, only 3.6% of people within the top 10% of Americans by income are Black, according to the Brookings Institute.

According to the Bureau of Labor Statistics (BLS), in the second quarter of 2020, the median income for a white worker was 26% more than the average Black worker and almost 30% more than the typical Latino worker.

To put this another way, as of 2018, the median Hispanic household earned 73 cents for every $1 earned by non-Hispanic whites. Meanwhile, the median Black household earned 59 cents for every $1 earned by a non-Hispanic white household, a ratio that has not significantly changed in five decades, according to the House Committee on the Budget.

Education is not to blame for the racial wage gap in America. A significant Black-white wage gap persists at all levels of education, according to a 2019 report by the Economic Policy Institute. Even Black individuals with advanced degrees earned 17.6% less than their white counterparts.

Black workers have also been hit harder by coronavirus layoffs. As of August 2020, the white unemployment rate was 7.5%, while the Black unemployment rate was 13.1%.


The racial wage gap is just one of the aspects that is contributing to the growing economic inequality in the U.S.