Category Archives: Income Inequality/Gap

How to Ensure Pay Equity for People of Color

Source: Michael A. Tucker, HR Magazine, Spring 2021

Employers are scrutinizing their pay policies to eliminate racial disparities.

….That slow progress and the United States’ bloody legacies prompt a fundamental question when the issue of pay equity and race is broached: How can the U.S. value the work of people of color if it doesn’t value people of color?…

Impact of Compensation on Inclusive Organizations

Source: Muhammad Irfan, Omar K. Bhatti, Rashida K. Malik, Compensation & Benefits Review, Vol 53, Issue 3, 2021
(subscription required)

From the abstract:
Discrimination in compensation for minority groups and individuals with regard to gender, physical disability, religion, and culture affects inclusion in an organization. This study is a combination of two studies and endeavors to verify our initial inference that compensation gaps are significantly related to inclusion. A mixed method approach has been adopted; in first part of the study, compensation data obtained from 32 organizations (608 observations) have been analyzed quantitatively. The study finds significant correlation between components of compensation gaps and inclusion. Gender as basis of discrimination was found insignificantly correlated to compensation, while pay for performance was found negatively related to inclusion. We have proposed a model to predict feeling of inclusion if components of compensation and discriminatory factors are known. In second part of the study, based on 25 in-depth interviews, cognitive basis of compensation gaps has been divulged, and we conclude that implementation of compensation equity and removal of cognitive bases of discrimination seem mandatory actions for inclusion.

Beyond Wages: Effects of the Latina Wage Gap

Source: National Partnership for Women & Families, Fact Sheet, March 2021

…Even as Latinas have entered the workforce in record numbers – now with more than 12 million workers – they continue to face the largest wage gap among women. Latinas in the United States are typically paid just 55 cents for every dollar paid to White, nonHispanic men. Overall, all women employed full time, year-round are typically paid 82 cents compared to every dollar paid to the general population, both men and women, employed full time, year-round.

Black Women and the Wage Gap

Source: National Partnership for Women & Families, Fact Sheet, March 2021

…Today this means that Black women in the United States who work full time, year-round are typically paid just 63 cents for every dollar paid to white, non-Hispanic men. The wages of Black women are driven down by a number of current factors including gender and racial discrimination, workplace harassment, job segregation and a lack of workplace policies that support family caregiving, which is still most often performed by women. Overall, women employed full time, year-round are typically paid 82 cents for every dollar paid to men.

Asian American and Pacific Islander Women and the Wage Gap

Source: National Partnership for Women & Families, Fact Sheet, March 2021

…Today this means that Asian American and Pacific Islander (AAPI) women who work full time, year-round are paid as little as 52 cents for every dollar paid to white, nonHispanic men, as Burmese women are. Asian American women overall are paid just 87 cents for every dollar paid to white, non-Hispanic men. The wages of AAPI women are driven down by a number of current factors including gender and racial discrimination, workplace harassment, job segregation and the devaluing of jobs dominated by women, and the lack of support for family caregiving, which is still most often performed by women.

Public Sector Unions Mean Middle-Class Jobs for Black Workers

Source: Hayley Brown, Dean Baker, CEPR, February 25, 2021

Government jobs have been an important source of economic mobility for Black workers and their families for many years. The federal government was an early adopter of anti-discrimination provisions, and today about a fifth of federal workers are Black. This includes those employed by the United States Postal Service, which provided well-paying jobs and career pathways to formerly enslaved people well before the rest of government, and in 2020 employed just under a fifth of Black federal workers. State and local governments have similarly emerged as wellsprings of relatively stable and well-paying employment for Black workers and pensions for Black retirees. The public sector’s legacy as a path to the middle class for the Black community persists today; government workers are disproportionately Black, and the pay gap between Black workers and white workers is smaller in the public sector than in the private sector.

The public sector is also an important source of union jobs for Black workers. Our analysis of 2020 data from the Current Population Survey Outgoing Rotation Group indicates that the unionization rate for Black workers in the public sector is quadruple the unionization rate for Black workers in the private sector, and unionized public sector workers account for a larger share of the Black workforce than they do of the white workforce. This matters because research has shown that Black workers who are members of a union or covered by a union contract enjoy considerable earnings and benefit advantages compared to their nonunion counterparts.

Public Work Provides Economic Security for Black Families and Communities

Source: Michael Madowitz, Anne Price, and Christian E. Weller, Center for American Progress, October 23, 2020

….
Public sector jobs provide economic security for Black households

Public jobs provide good wages, better benefits, and greater job security, all of which are critical components of economic security and help families build wealth. Moreover, the wealth gap in the public sector is much smaller. For example, in the private sector, white households have as much as $10 of wealth for each $1 Black households hold; in the public sector white households hold closer to $2 for every $1 of wealth for Black families.

Public employment can provide greater economic security for Black workers for several reasons:

  • Public sector hiring is more accountable to citizen influence than private sector hiring, providing stronger checks on employment discrimination.
  • Public sector jobs are more likely to provide a defined benefit pension, which guarantees lifetime benefits upon retirement.
  • Public sector jobs offer more stable employment, providing economic security otherwise available only to households with wealth.
  • Public sector jobs are more likely to be unionized. Unionized jobs are highly beneficial to workers, and Black workers in particular.

The Economic Consequences of Major Tax Cuts for the Rich

Source: David Hope, Julian Limberg, London School of Economics and Political Science (LSE), Working Paper 55, December 2020

This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and unemployment. First, we use a new encompassing measure of taxes on the rich to identify instances of major reductions in tax progressivity. Then, we look at the causal effect of these
episodes on economic outcomes by applying a nonparametric generalization of the difference-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment.

Related:
Fifty Years of Tax Cuts for Rich Didn’t Trickle Down, Study Says
Source: Craig Stirling, Bloomberg, December 15, 2020