Pay gap between black, white college graduates has grown

Members of the college class of 2019 are starting out on some of the best economic footing in recent memory, but that fortune isn’t spread equally.

The gulf in wages between young black college graduates and young white college graduates has actually widened over the past two decades, according to a report released Tuesday by the Economic Policy Institute, a labor-focused think tank. The same is true of the wage gap between young college graduates who are women and young college graduates who are men.

The gap in hourly wages between young women college graduates and young men college graduates was $2.23 in the year 2000, the EPI found. By 2019, it grew to $2.84. In the year 2000, black young college graduates actually earned about 89 cents more per hour than their white counterparts. By the year 2019, white young college graduates were making $2.50 more per hour than young black college graduates, the EPI added.

“They’re as close to a clean slate as you can get,” Elise Gould, a senior economist at EPI and one of the authors of the paper said of young college graduates, “and to see sizable wage gaps is pretty troubling.”

The EPI paper digs in a bit to the mechanics of how this is happening. Though wage growth has been relatively slow for both genders between 2000 and 2019, men’s wages grew slightly faster during that period, which is why the gender wage gap between young college graduates is wider than it used to be.

The black-white wage gap tells a different story. In the late 1990s and 2000, hourly pay of black college graduates closely mirrored that of white college graduates. But during and in the wake of the Great Recession, black hourly wages saw large declines.

Gould said the paper doesn’t get to exactly why these gaps exist and even grew. But other research may offer some insight.

There’s evidence to indicate women and people of color are more likely to end up working in fields that pay less. In addition, students of color are more likely to be concentrated in less-selective colleges that may not have the resources to get students to and through college and into a job that pays decently. Finally, we know that there’s discrimination in the labor market.

Though it’s still unclear exactly why young female and young black college graduates are getting paid less right out of the gate, one thing we do know is that they’re doing what they can to compensate. Young women are more likely than young men to be enrolled in further schooling and young black college graduates are also more likely than young white college graduates to be pursuing further education.

“They face a pay penalty,” Gould said of young black college graduates. “To overcome that it appears that compared to their white counterparts, they’re more likely to go ahead and pursue further education right away.”

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