(Bloomberg) -- Black workers earn less than their white counterpartsin a worsening trend that holds even after accounting fordifferences in age, education, job type and geography, new FederalReserve research shows.

|

In 1979, the average black man in America earned 80 percent asmuch per hour as the average white man. By 2016, that shortfall hadworsened to 70 percent, according to research Tuesday from the SanFrancisco Fed, which found the divide had also widened for blackwomen.

|

“Especially troubling is the growing unexplained portion of thedivergence in earnings for blacks relative to whites,” SanFrancisco Fed Research Director Mary Daly and her fellow authorswrote in the report, adding that this could owe to hard-to-measurefactors including discrimination or school-qualitydifferences.

|

“The opportunity to succeed is at the foundation of our dynamiceconomy. In this context, large and persistent shortfalls forAfrican-Americans, or any other group, are troubling,” theywrote.

|

The San Francisco Fed’s study marks a growing focus by the U.S.central bank on inequality and the lagging employment performanceof U.S. minorities. Chair Janet Yellen has talked about the subjectand the Philadelphia and Minneapolis Feds have set up institutes tostudy inequality and social mobility. The increased attentionstands in contrast to the past, when the topic was rarelyinvestigated by Fed research staff or broached by officials, whoviewed the problem as outside their remit for monetary policy.

|

The new research, which highlights the persistence of a racialwage gap 50 years after the passage of the U.S.’s landmarkanti-discrimination Civil Rights Act, points to a problem forpoliticians and policy makers: It’s tough to address disparities ifit’s impossible to measure what’s driving them.

|

|

The fact that the gap has lingered and even worsened over timealso means that a stronger labor market, which politicians oftencite as a remedy for black workers’ economic disadvantage, probablywon’t permanently narrow the divide.

|

“A job is the first condition, but it’s really not asufficient condition to fix disparities,” Daly said.

|

Black workers have consistently higher unemployment than theirwhite counterparts, but that divide is highly cyclical: In stronglabor markets, it shrinks, but then it skyrockets again duringrecessions. Black wage gaps change less across business cycles.

|

Income ladder

The fact that black workers earn less is a problem in partbecause it limits their chances at moving up the income ladder.Lower wages can make it harder to afford time off for education andtraining, for instance.

|

And it’s particularly worrying that the black-white gap isclimbing on the back on unexplainable factors. While a sizableportion of the racial wage divide arises from the differentindustries and occupations black people work in, their educationlevels, and their ages, the share owing to factors that aren’ttraceable accounts for much of the growth in the wage gap overtime.

|

In 1979, about 8 percentage points of the earnings gap for menwas hard to explain, and by 2016, that had risen to 13 percentagepoints -- just under half of the total earnings gap.

|

“This implies that factors that are harder to measure -- such asdiscrimination, differences in school quality, or differences incareer opportunities -- are likely to be playing a role in thepersistence and widening of these gaps over time,” the authorswrite.

|

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.