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Tight Labor Market Leads to Some Narrowing of Racial Inequalities

A bit of hopeful news published in the Economist suggests historical employment inequalities for Black workers are shrinking. Prior to the 2019 Covid-19 pandemic, Black workers had an unemployment rate twice as high as white workers. Last year's jobless rate was 5.2% for Black Americans compared to 3.7% for white Americans — the narrowest gap on record. Additionally, 63% of Black Americans are working or searching for jobs, compared to 62% of white people. While still well below white salaries, Black Americans' median salaries rose to 84% of the median white salary, up from 79%.

The Economist points to the U.S.'s current economic strength as a primary reason. With employers needing more workers, marginalized groups can access more opportunities than they might otherwise. The article also points to a decline in incarceration as helping to increase Black employment. While Black individuals are five times more likely than white individuals to go to prison, the number of individuals incarcerated is down more than a quarter.

Nevertheless, racial inequality continues to persist. Wages for Black and white college graduates have diverged further apart. Recent statistics released by the U.S. Department of Labor show the wage disparity begins early. White workers ages 16 to 24 earned $747 per week in 2023, compared to the $614 made by Black workers in the same age group. Studies attribute some of those differences to the respective wealth of white and Black families. Young workers from wealthier families have better access to better opportunities. Black families encompass more significant portions of lower-paying fields. Location matters for wealth — the minimum wage is lower in Southern states where more Black individuals live.