There’s a commonly held belief that having a greater level of education ensures a higher level of lifetime income. While this is generally true the picture is rather more complex. It’s painfully clear that income inequality is more acute now than it has ever been and the gap between white and black wage earners in the United States is wider than ever. But, perhaps surprisingly, the overall income gap is increasing between well-educated whites and blacks. Why is this the case? A detailed study by the Economic Policy Institute (EPI) reminds us that:
Income growth in recent decades has been limited, more or less, to the highest echelon of earners, a group that is overwhelmingly white. Out of every 1,000 households in the top 1 percent, only two are black, while about 910 are white. And so, as economic forces lifted the incomes of the 1 percent, the blacks on lower rungs of the economic ladder have been largely left behind.
So while black Americans with high school diplomas and college degrees may historically be doing better, the predominantly white top 1 percent continues to pull away.
From Washington Post:
We’ve known for a while that black Americans aren’t making economic progress. A recent report from the Economic Policy Institute, a left-leaning think tank, shows that the black-white wage gap is now the widest it has been since 1979. What’s more interesting, though, is how inequality has been increasing, and for whom.
It used to be that low-skilled black workers suffered the greatest disadvantage relative to their white counterparts. But there has been a strange reversal in the past 40 years. EPI finds that the black-white wage gap has become wider — and is widening faster — among those with more education.
This chart illustrates the history of the wage gap among men with less than 10 years of job experience. The early years are the most crucial in a person’s career, and also the most sensitive to fluctuations in the job market.
Read the entire article here.