While wages for many Americans have rebounded to pre-pandemic levels, earnings for Black workers declined in the first quarter of 2021, growing the wage gap to its highest level since before the pandemic, according to a new analysis.
In a report of earnings data by the Ludwig Institute for Shared Economic Prosperity (LISEP) real median earnings have increased by 1 percent for the first quarter of 2021, driven in large part by a 1.6 percent increase in real earnings by Hispanic workers, while real earnings for white workers remained virtually unchanged.
Wages for white earners have fully recovered to pre-pandemic levels and are currently 0.3 percent higher in real terms than in December 2019.
Meanwhile, Black workers saw their real earnings decrease by 1.4 percent since the fourth quarter of 2020, and a decline of 3.5 percent since the beginning of the pandemic.
Black workers are now earning 70 percent as much as their white counterparts, the largest racial wage gap since the pandemic began and six percentage points higher than at the turn of the century, according to LISEP.
“The simple fact that an improving economy has failed to bring improving wages for a large swath of the workforce is an indication that the jobs being created are not the type of long-term, living-wage jobs necessary to sustain an economic recovery,” said LISEP Chairman Gene Ludwig. “An equitable recovery must lift all segments, otherwise the post-COVID economy will look a lot like the pre-COVID economy with those at the top racing ahead and everyone else getting left behind.”
LISEP’s analysis of the first quarter of 2021 earnings data also shows that lower-income earners have been much slower to recover than those at the top of the income scale, with those at the 90th percentile of wage earners seeing a real 2.0 percent increase in the last quarter, and those at the 25th percentile seeing a gain in real terms of just 0.4 percent.
The groups also found unequal growth in terms of educational attainment, with notable decreases for those with less than a high school diploma; with only a high school diploma; and for those with some college, but less than a bachelor’s degree.
But among those with bachelor’s degrees or advanced degrees, earnings are up and have regained pre-pandemic levels.
“For our health and well-being as a society, it is critical for every citizen to have an opportunity to earn a living wage, as this has implications well beyond economics,” Ludwig said. “Our focus should not be to get back to where we were pre-pandemic – we have to do better.”
The U.S. unemployment rate declined to 6 percent in March. The Department of Labor says the number of unemployed persons, at 9.7 million, continued to trend down in March but is four million higher than in February 2020.
Among the major worker groups, the unemployment rate for Asians rose to 6.0 percent in March, following a decline in the previous month.
The jobless rate for Hispanics edged down to 7.9 percent over the month, while the rates for adult men (5.8 percent), adult women (5.7 percent), teenagers (13.0 percent), Whites (5.4 percent), and Blacks (9.6 percent) changed little.
“These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic,” said the department in a statement. “Job growth was widespread in March, led by gains in leisure and hospitality, public and private education, and construction.”
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