News
Sept. 5, 2017
SOURCE: Mary C. Daly, Bart Hobijn, and Joseph H. Pedtke – Federal Reserve Bank of San Francisco

More than half a century since the Civil Rights Act became law, U.S. workers continue to experience different levels of success depending on their race. Analysis using microdata on earnings shows that black men and women earn persistently lower wages compared with their white counterparts and that these gaps cannot be fully explained by differences in age, education, job type, or location. Especially troubling is the growing unexplained portion of the divergence in earnings for blacks relative to whites.

In 1964 President Lyndon B. Johnson signed the Civil Rights Act, prohibiting discrimination based on race, color, religion, sex, or national origin. The signing marked a shift in American law that proponents hoped would produce greater equality across all dimensions of society, including the labor market.

While many things have changed since that historic moment, the gaps in labor market outcomes between black and white Americans remain large and in some cases are increasing. In this Economic Letter we document these gaps and examine their key determinants. The findings point to persistent shortfalls in labor market outcomes for black men and women compared with their white counterparts that cannot be fully explained by differences in age, education, job type, or location. Especially troubling is the growing unexplained portion of the divergence in earnings for blacks relative to whites.



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