Economic inequality has risen to the top of our national dialogue in recent years, garnering a lot of attention in the media, as well as from local and national leaders. This heightened interest in inequality has developed because economic insecurity is touching more and more people — not just the poor or historically disadvantaged — in a very real way. Though most of the attention has been focused on growing gaps in income and wealth, as well as how difficult it has become to climb the economic ladder, much less has been said about a more basic reality facing people every day: After accounting for inflation, most Americans' hourly wages have grown very little in the last three and a half decades.
What's happening with wages is essentially connected to every form of growing economic inequality. The main source of income for the majority of American households comes from the money earned at jobs. This is the money Americans use to meet basic living expenses and to save for down payment on a home, college tuition, or retirement.
This is especially true for African-American and Latino workers who generally have fewer assets and rely almost exclusively on their paychecks to support themselves and their families. Therefore, anyone concerned about eliminating economic inequality — everything from disparities in income and wealth to gulfs in opportunity and mobility — must also be concerned about wage growth and eliminating racial wage gaps. Granted, broad-based wage growth is not a complete panacea for all racial disparities in economic outcomes. Wealth, the value of cash and assets that a household owns after accounting for debt, is lower for the vast majority of black and Latino workers even when compared with white households with similar incomes. But broad-based wage growth would help to narrow persistent wealth, opportunity, and mobility gaps.