A Rising Wage Tide Does Not Lift All Boats
Rising wages should increase wages for all workers, right? American workers saw a 2-3 percent annual wage increase over the last decade. Despite these general wage increases, the median wage gap between Black and white workers has increased by 3.6 percentage points. Even after controlling for age, gender, education, and region, Black workers are paid 15% less than white workers.
This wage increase intervention passed solely through the Immediate Quality or Value lens by putting more dollars into paychecks. But it failed to take into account:
Availability
Wage increases have mostly benefited professionals in the business service sector and the industries and roles where Black workers are concentrated (largely minimum wage and/or tip-based) have not kept pace.
Participation
Hiring discrimination means Black workers receive fewer interviews and offers of employment, playing a large role in the nation’s persistent Black-white unemployment gap of 2:1. This gap means that there is a disproportionately low share of Black Americans able to participate in wage increases.
Long-Term Returns
Since wage increases are not necessarily attached to inflation, actual cost-of-living, or median wage, whatever wage increase Black Americans experience likely maintains the status quo.
