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How Income Inequality Affects Minority Workers

It’s no secret that white households in the United States take in significantly more income than black and Latino households do, fueling racial inequality. What’s to blame for this discrepancy? It’s not just that whites work in higher paying jobs than their minority counterparts do. Even when whites and minorities both work in the same field—management, for instance—these income gaps don’t disappear.

Women and people of color continue to bring home less than white men do because of the pervasiveness of income inequality. A vast amount of research indicates that minority workers are literally being shortchanged in their paychecks.

The Great Recession of 2007 had an adverse effect on all American workers. For African American and Hispanic laborers in particular, the recession proved devastating. The racial wealth gap that existed before the economic downturn only widened. In a study called “State of Communities of Color in the U.S. Economy,” the Center for American Progress (CAP) pinpointed just how much minority employees suffered during the recession. The study found that blacks and Latinos brought in on average $674 and $549, respectively, per week. Meanwhile, whites earned $744 per week, and Asians earned $866 per week during the fourth quarter of 2011.

Contributing to this pay gap is that higher numbers of African Americans and Hispanics than whites and Asians worked in jobs that paid minimum wage or less. The amount of black minimum wage workers rose by 16.6 percent from 2009 to 2011, and the number of Latino minimum wage workers rose by 15.8 percent, CAP found.

On the other hand, the number of white minimum wage workers rose by just 5.2 percent. The amount of Asian minimum wage workers actually dropped by 15.4 percent.

In February 2011, the Economic Policy Institute released a paper about racial disparities in income called “Whiter Jobs, Higher Wages.” The paper suggests that occupational segregation contributes to racial gaps in the pay scale. EPI found that “in occupations where black men are

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