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The Race-Income Gap is Black and White

Published the end of 2016, KK Charles and coworkers investigated both the temporal trend of the black, white race-income gap as well as the nature of the wage disparity by education levels within the two groups.  The income gap is the difference in real, positive annual earnings in 1980s dollars, between black and white males ages 25-44.  

The race income gap is closing, slightly, but remains high.  In particular, the study found that:

"after closing substantially from 1940 to the mid-1970s, the median black-white earnings gap has since returned to its 1950 level".

In 1950 the wage gap was $5,170 and in 2014, the gap was $8,610 annually.  In fact, the gap hit an all-time high in 2007 and remains near that level in our most recent data. 

Investigating the annual wage gap more closely we do see a reduction from the 2007 wage gap record in 2007.  During Obama's tenure we see a 7.6% reduction in the gap, going from $9,320 in 2007 to $8,610 in 2014.


The above figure reflects the black-white mean annual income gap from 1940 to 2014.  The income gap is reported as a difference in real, positive annual earnings in 1980s dollars


Education Decreases the Gap

The work by KK Charles and coworkers also found that education had led to a decrease in the race-income gap.  This finding was especially true for black men in the 90th earnings quantile.  From 1940 to 2014 the income race gap decreased by 39% for black men in the 50th quantile while it decreased by 66% for black men in the 90th quantile. 

Specifically they noted:

"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."


Income vs Gender Gap

Using median annual income data the following figure reflects earnings as a percentage of white earnings.  As can be seen, the race-income gap is larger than the gender-income gap and it is getting worse.  While women have experienced a gain against men, black men have seen their incomes diverge from their white counterparts.

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