Even Among College Grads, Whites Earn More Than Nearly Everyone
There’s greater pay equality among lower earners with less education because the minimum wage provides a floor.
At the moment, no matter how much education people of color attain, they likely will earn less than whites with the same level of education. That’s according to the latest National Equity Atlas, created by PolicyLink and the University of Southern California’s Program for Environmental and Regional Equity to show economic and educational trends using Census and other government data.
Whites on average make more than people of color in the 150 largest metropolitan areas. Nationally, they have a median hourly wage of $21, compared to $16 for people of color. This gap in earnings between races and ethnicities is well-documented, as are its reasons: Working-age people of color tend to be younger, have less experience in skilled labor, and are less educated than whites.
When Next America evaluated hourly wages by educational attainment, the gap between people of color and whites is still considerable. We looked at data for the largest 150 metropolitan areas, breaking down median hourly income by race and by educational attainment. Education categories include those with less than a high school diploma, only a high school diploma, some college, only an associate’s degree, and a bachelor’s degree or higher.
In almost every metropolitan area, whites with a bachelor’s degree earn more than people of color with a bachelor’s degree. In only a handful of metros—including Worcester, Massachusetts; Madison, Wisconsin; and Manchester, New Hampshire—where data is often missing for black and Latino workers, do people of color have higher median hourly wages than whites. Asian workers in some of those metros made more than white workers, where their average hourly wage was more than $30. That’s more than double the national average for people of color.
This wage gap between people of color and white workers with a bachelor’s degree or higher was most pronounced in Bridgeport, Connecticut. Several companies, including General Electric and Xerox Corporation, are headquartered in the working-class area. While people of color with a bachelor’s degree make on average $30.70 an hour, which is well above the national average of $16 for people of color across all educational levels, white workers have a median hourly income of $40.19.
Asian workers in Bridgeport lifted the average for people of color in that area, earning $37.39 an hour. Black and Latino workers, meanwhile, earned considerably less, making $26.07 and $27.82 per hour, respectively.
A National Trend
Elsewhere in the country, the pay gap between working whites and people of color with a bachelor’s degree or higher is similarly wide: $8 in Huntsville, Alabama; Naples, Florida; and Houston, Texas. The gap is about $7 in Anchorage, Alaska; Los Angeles; Salt Lake City; Port St. Lucie, Florida; Bakersfield, California; and Provo, Utah.
Even in metropolitan areas where people of color with a bachelor’s degree earn the highest wages, white workers earn more money per hour. In those tech and government hubs, people of color earn $39.67 in San Jose, California; $33.72 in Trenton, New Jersey; $32.15 in San Francisco; $31.84 in Washington; and $31.18 in Oxnard, California. The wage gap is still pronounced among whites with the same educational attainment in those places because, on average, they earn around $38.
In recent decades, wage gaps have grown the most for college graduates, says Valerie Wilson, the director of the Economic Policy Institute’s Program on Race, Ethnicity, and the Economy. There’s greater pay equality among lower earners with less education because the minimum wage provides a floor. For people of color with a higher education, Wilson says, “There is discrimination in the labor market, not only in terms of hiring but definitely in pay.”
Even with the minimum-wage floor, the wage gaps among workers with just high school degrees are large in some metropolitan areas, including San Jose; Baton Rouge; New York; Santa Rosa, California; and Oxnard, where white workers make around $7 more than people of color. The gap is largest in Anchorage, at $8.21.
The wage gap is smallest in metropolitan areas where wages are low across all races. The gap is below $2 an hour in Akron, Ohio; Wilmington, North Carolina; Dayton, Ohio; Albuquerque, New Mexico; Syracuse, New York; and Boise, Idaho. But in those metros, white earners don’t make more than $16 an hour, well below the national hourly average for whites because of the agriculture and manufacturing jobs available.
“The places where things are more equal tend to be places where everybody is doing worse than average,” says Wilson. “Things tend to equal out at the bottom, unfortunately.”
Behind the Numbers
Racial gaps in wages are pervasive, according to Sarah Treuhaft, the director of equitable growth initiatives at PolicyLink.
“Given our shifting demographics, those disparities of pay are just going to grow,” says Treuhaft. “It impacts the overall economy. If people are not earning as much pay, they have less money to save, to educate their child, to spend in the economy, which fosters more economic activity. Overall, that racial gap in wages adds up to a big gap in economic prosperity for the region.”
It’s clear that every racial group does better with more education. Building wealth across racial groups requires some sort of path toward upward mobility. But there are different factors in the career paths of people of color that allow those with the same educational attainment to be paid unequally.
A 2013 report from Georgetown University’s Center on Education and the Workforce shows that people of color often go to less selective colleges and universities, which hinders their access to the highest quality education that will eventually lead to higher paying jobs. That prevents them from getting access to networks that have connections to high-growth industries.
This is especially troubling in tech hubs like San Jose and San Francisco. Not only are both of those metropolitan areas the most unequal wage-wise for people of color with bachelor’s degrees, but they are some of the worst metros overall for people of color, regardless of education. The wage gaps between blacks and whites and between whites and Latinos is the highest in San Jose. In San Francisco, the gap between whites and Latinos is the fourth highest in the country, behind Washington and Bridgeport. The gap is above $15 in all four metros. Additionally, the wage gap between whites and blacks is third highest in San Francisco, behind Bridgeport.
“The tech industry does extremely poorly in terms of racial diversity and hiring, and a lot of these industries tend to have some of the highest salaries,” says Wilson. “If the average is being pulled up by tech or financial industry salary where there’s less representation of minorities, then it would stand to reason that in places where those industries are a significant part of the local economy, that will have an impact on pay gaps in those places.”
Andrew McGill contributed to this article