MSU study: Racial income gap widening as Black workers fall behind

THURSDAY, Aug. 6 — A new study from Michigan State University shows the earnings of Black workers have fallen while earnings of white workers have increased across much of the country.

And the relative losses are larger in Michigan and the Great Lakes region than any other region of the U.S., said Charles Ballard, author of the study and economics professor at MSU

“Forty years ago, Black workers earned more in Michigan than in any other state,” Ballard said in a release. “Since then, in much of the country, Black workers’ earnings at least kept up with inflation, but white workers’ earnings grew faster. In Michigan, however, the inflation-adjusted earnings of Black men are substantially less now than they were in the late 1970s.”

In Michigan, from 1976 to 1981, Black women earned about 15% more than non-Hispanic white women, but from 2012 to 2017, Black women earned 15% less than white women. Black men earned 91% as much as white men from 1976 to 1981, but that fell to 76% from 2012 to 2017, Ballard said.

“Even among the college-educated, Black workers are still not paid the same as their white counterparts with the same educational attainment,” said co-author John Goddeeris, noting the biggest factors to explain the income gap are racial differences in education and occupation.

The recent study found that even though the racial gap in educational attainment is smaller than it once was, a substantial gap remains in all regions of the country. Black workers are also much more likely to work in low-paying occupations than white workers with the same education.

Researchers also found that federal employees tend to be well paid, and a relatively large share of Black women were employed by the federal government, a factor in reducing the racial earnings gap. Additionally, those who live outside a metropolitan area earn less than those who live within one. Outside the south, Black workers are more likely to work in metropolitan areas.

The advantages, however, are small, and not enough to offset the effects of education and occupational segregation, Ballard explained. To close the racial income gap, leaders must address the systemic structure of racism and improve education opportunities, he added.

“Improving educational opportunities for Black students should be a top priority,” Ballard said.

Click here to view the complete MSU study from Ballard and Goddeeris.