Linda Chavez: Earnings gap can depend on various situations

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Fifty years after the passage of civil rights laws outlawing discrimination based on race, ethnicity and sex, blacks, Hispanics and women still earn less than white men. In many circles, this fact alone reinforces the belief that discrimination is widespread and only greater government intervention will solve the problem.

But might there be other reasons to explain the earnings gap between whites and minorities and between men and women? Yes, according to a provocative new book by economists June O’Neill and Dave O’Neill. The Declining Importance of Race and Gender in the Labor Market makes a persuasive argument that factors other than discrimination are to blame.

The O’Neills don’t downplay the role of race and sex discrimination in the past. For Southern blacks in particular, the passage of the Civil Rights Act of 1964 had an immediate and salutary effect. The wages of blacks in the South rose significantly in the aftermath. But elsewhere, the wage gap had been narrowing at a fairly rapid rate for 20 years. And anti-discrimination law had little demonstrable effect on the wages of women, though their earnings, too, had been steadily rising.

Blacks, especially black males, saw their earnings go up dramatically in the aftermath of World War II. Indeed, the 1940s was the decade in which the earnings of black men rose fastest — exceeding the improvement experienced after employment discrimination was outlawed. Much of this rise was attributable to the movement of blacks out of the Deep South, where they were barred from certain jobs and were paid less even when they performed the same jobs as whites. But educational advancement was also a major factor in how blacks began to close the gap with whites.

The differences that persist today, according to the data the O’Neills present, are largely the result of divergent work-related skills between the groups. Most differences in hourly earnings disappear when black and white men with similar years of schooling, work experience and regional residence are compared.

The O’Neills use a rich source of data from the Current Population Survey and the National Longitudinal Survey of Youth to measure these factors, as well as scores from the Armed Forces Qualification Test.

In 2008, when schooling, work experience, scores on the AFQT, age, region, hours worked and type of employer were accounted for, black men ages 35 to 43 earned 100 percent of the wages of similar white males. Hispanic males in the same category earned 97 percent of what non-Hispanic white males earned, and those between the ages of 43 and 51 earned 100 percent when these factors, along with the ability to speak English, were taken into account.

But when researchers don’t include these important characteristics in their analyses, the differential appears much greater. The unadjusted earnings of black males are only 70 percent of the earnings of whites, and Hispanics’ earnings are 82 percent of whites. The same holds true for women. The raw numbers suggest that women lag far behind men in their pay. But the oft repeated claim that women earn only 77 cents for every dollar men earn is highly misleading.

There is a large wage gap between men and women, one not entirely explained by years or quality of schooling, regional differences, or scores on aptitude tests. In fact, women have completed more years of schooling, on average, than men, live in all regions of the country, and score as well as males on aptitude tests. But women often make choices that have a large impact on their earnings, including the decision to have children.

Working mothers are more likely than men to work part time and take career breaks during the childbearing years, which means they accumulate fewer years of continuous work experience. And women also are more likely to try to balance work and family obligations by choosing occupations that provide more flexibility but less pay. Even women who work full time work fewer hours per week than their male counterparts. When all of these characteristics are factored in, the gender gap largely disappears.

The best way to close the wage gap between blacks, Hispanics and whites, the data suggest, is to encourage blacks and Hispanics to stay in school, study hard and commit to gaining work experience. When it comes to women, perhaps we should throw out the rhetoric and honor women’s choices.

LINDA CHAVEZ’S column is distributed by Creators Syndicate Inc.

 


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