Historically, the problems of racial-ethnic minorities in the labor force have been associated with inadequate education and/or discrimination that has confined them to second-rate jobs. The unstated assumption is that minority-concentrated jobs are intrinsically "bad" jobs. That is, the wages paid to these occupations reflect the lower skill, effort, and responsibility entailed in the work. Further, although working conditions are not pleasant in many minority-concentrated jobs, additional remuneration is not considered warranted. The problem is defined as access. Public policies to increase access to "good" jobs have focused on educational opportunity, equal employment opportunity, and affirmative action.

This Policy Brief questions the assumption that such solutions, though necessary, are sufficient. It explores whether the pay of minority-concentrated jobs truly reflects the productive contribution of the work or whether the remuneration in such jobs is biased due to the social devaluation of particular types of work. If this work is socially and economically devalued, one remedy for race-based earnings differentials is the extension of fair pay policies to jobs occupied by racial-ethnic minorities.

Background on Gender-Based Pay Equity Policies

Movements for equal pay, led by women's associations and labor unions, began over a century ago. The earliest equal pay laws in the U.S. were passed in Montana and Michigan in 1919. During World War I, women performed war work in formerly male-dominated industries, prompting fear among male workers and their unions that employers might make the substitution permanent in order to lower costs. Equal pay, ironically, was viewed as a means of preserving the best-paid jobs for men. However, feminists who were close to completing the long campaign for suffrage, also supported and fought for equal pay legislation. They generally favored a broad definition of equal pay that would permit comparisons between men's and women's jobs rather than the narrower concept of "equal pay for equal work."

Such job comparisons became more feasible with the development and adoption of point factor job evaluation systems beginning in the 1920s. Job evaluation based the relative pay of jobs within a firm on job content. Because such systems focused on setting the rate for the job (rather than focusing on individual workers' characteristics), they undermined wage-setting practices that openly and explicitly linked pay to gender, race, and/or marital status.

The use of job evaluation to measure and correct pay inequities was promoted by the National War Labor Board during World War II. In several key decisions, the National War Labor Board endorsed the principle of equal pay for equal work by gender. It also issued a General Order advocating equal pay for men and women doing "comparable quantity and quality of work on the same or similar operations." Although the primary focus of equal pay cases was gender discrimination, the Board also heard a case in which separate classifications for "colored laborer" and "white laborer" were paid unequally. The employer, Southport Petroleum Company, was ordered to combine the separate classifications and raise all wages to the higher pay scale.

Legislatively, the first federal equal pay bill was introduced in the U.S. Congress in 1945, as World War II ended. (Several states passed equal pay laws during and after the war as well.) The "Women's Equal Pay Act of 1945" would have mandated a broad equal pay principle, based on the "comparable quality or quantity" standard. Yet, as the name implies, the proposed bill solely focused on gender, perhaps because the issue of equal pay was closely associated with women's war work. Despite a growing consensus around the principle of equal pay for equal work, which was endorsed by the National Association of Manufacturers as early as 1942, there was much resistance to a legislative mandate on private employers. Passage of the Equal Pay Act took 18 years. The law that finally passed in 1963 was watered down immensely compared with the initial bill. Most critically, it used the language of equal, rather than comparable, work. Equal pay by race was not mandated until passage of Title VII of the Civil Rights Act a year later.

"Loopholes" in the Equal Pay Act and Title VII did not and currently do not provide a remedy for the undervaluation of particular jobs within a firm. This form of discrimination is different than discrimination against individuals who are women or members of a particular racial-ethnic group. It results from the rigidity of relative wages that can often be traced back to the historical association of certain jobs or tasks with particular groups of workers. For example, if relative wages for different job categories were initially set during a period when it was assumed that men were breadwinners and women were temporary or supplemental earners, current wages for men's and women's jobs may still reflect these outmoded attitudes. Further, there was a tendency for the job evaluation systems adopted after World War II to value skills associated with men (such as heavy lifting or working with numbers) more highly than skills associated with women (such as manual dexterity or caring for people). Since the 1980s, these issues have been raised by comparable worth advocates, including the National Committee on Pay Equity, as part of a revived movement for broader pay equity policies.

In general, the racial composition of jobs continues to be overlooked both in the literature and in public policy. This neglect of the effects of concentration of people of color in certain jobs has kindled debate over the extent to which policies to achieve pay equity are relevant for minority workers. The arguments for applying pay equity policies to minority-concentrated jobs partly mirror the arguments made about the devaluation of women's work.

First, historically, certain tasks have been associated with African-Americans and recently immigrated racial-ethnic minorities. For example, cleaning, grounds keeping, personal service, and food preparation were often assigned to African-Americans as a legacy of slavery. While the race-ethnicity of domestic servants varied regionally in the U.S., the work was done by the groups facing various forms of labor market discrimination.

Just as women's skills such as caretaking and sewing have been undervalued because they were thought to be natural rather than acquired, a legacy of racism has been the lack of recognition of the skill content of work performed by former slaves and immigrants. Further, past prejudices about the innate inferiority of specific racial-ethnic groups may have translated into undercompensation for hazardous and taxing working conditions. Rather than expecting all racial-ethnic minorities to raise their wages through occupational mobility, fair pay for undervalued but socially necessary work must be part of the solution. Not everyone can be the manager of a restaurant, hotel, corporation, hospital, or the engineer of a building. In the 21st-century global, high technology, service economy, workers are still need to clean the buildings, prepare the food and serve the meals, assemble the computer chips, and care for the ill.

Explaining Race-Based Differentials

White men and women in 2000 earned more than workers who are racial-ethnic minorities (see Figure 1). The differences among women and race are depicted in Figure 1. Because white men earned the highest median weekly earnings ($669), the gender-based wage gap for white women compared with men of their own racial-ethnic group is greater than for women of color. The ratio of median usual earnings for white women compared with white men is 74.7 percent while the gender-based wage ratios for black women and Latinas is 85.3 and 87.9 percent. Of course, the groups with the lowest earnings, Latina women, have the largest gap between their pay ($364) and the pay of white men ($669), a ratio of only 54.5 percent.2

Time has not erased these gaps. In 1990, white women earned 71.5 percent of white men, black women earned 85.5 percent of black men, and Latina women earned 87.6 percent of Latino men.3 A stubborn pay gap has persisted since U.S. government data collection permitted and facilitated a breakdown of earnings by race and gender.

Research in the social sciences has demonstrated that as both the percent female and percent minority in a job rises, average pay falls, other things held equal. These two variables are crucial for analyzing the potential of policies that try to achieve equal pay.5 In fact, differences in worker characteristics such as education, experience, and job tenure account for little of either occupational segregation by race or the racial wage gap.

In a key longitudinal study of black and white women aged 34-44, only one-fifth of the racial wage gap between white and black women could be explained by schooling and labor market experience.6 A larger factor is the segregation of black women into lower-paying occupations. Furthermore, the negative wage penalty for working in a female-dominated job is larger for black women than white women.7

Unfortunately, the federal government is far from a model employer, as shown in data from a sample of 4,835 federal contractor firms. Though federal contractors typically have affirmative action hiring practices, the problem is not just access to "good" jobs. The authors found that the majority of pay gaps by race and gender among federal contractors are the result of occupational segregation at work, and discrimination likely plays a role in that segregation.8

One study of the California Civil Service finds large, substantial pay penalties associated with the presence (or entry) of women and nonwhites in job classes.9 In the State of New York comparable worth study completed in 1985, the first report of its kind to investigate race as well as gender bias, the primary differences in salaries of job titles was not based on job content but in the racial-ethnic and gender composition of the job's incumbents. The most undervalued jobs in the New York Civil Service-as determined by comparing evaluated job content with pay-were those that were both disproportionately black, Hispanic, and also female-dominated.10 A statistical study based on a survey of North Carolina employees, public and private, concluded that the racial composition of an occupation accounts for 21 percent, at a minimum, of the black-white wage gap.11

Just a few U.S. states and localities have included race in their analysis of pay scale. Out of more than thirty states that have implemented pay equity by a variety of means, only New York, New Jersey, Wisconsin thus far have included an examination of the effects of racial composition on pay. Only a few counties adopting pay equity have included an analysis of race-based wage discrimination, including Contra Costa County (California), Montgomery County (Maryland), Suffolk County (New York), and King County (Washington). And despite the relatively large numbers of workers in jobs with a heavy concentration of people of color in U.S. cities, few have investigated possible race bias. Including race as a category for analysis would help to eradicate some forms of wage discrimination.

Some research has addressed whether women of color, in particular, would benefit from pay equity. The answer is a resounding yes. One such estimate is provided in a study that used the 1980 U.S. Census. Pay equity could result in pay increases of about 30 percent for women of different racial-ethnic groups.12 A more recent study by two economists has also calculated the hypothetical effect of pay equity by race and gender on earnings as well as poverty rates. Earnings would rise and women of all racial-ethnic groups would be able to support families. Specifically, close to 50 percent of women of color earning less than the federal poverty threshold for a family of three would be lifted out of poverty if a national pay equity policy were adopted.13

Another economic analysis is especially relevant and interesting because it examines how white and black wages change when the racial composition of jobs moves toward equality-that is, if occupations had the average level of racial density or racial integration in the labor force. Black men and women are estimated to experience wage gains of 3.5 percent and 2.7 percent. If white men moved from an entirely white to an entirely black workplace, their wages were estimated to fall 51.9 percent. The reason, once again, is that much of the racial wage gap is due to the racial composition of the job and not human capital variables such as education.14

Recommendations

In order to achieve pay equity by race-ethnicity and by gender, a multi-faceted approach is needed, including:

• Widespread adoption of comparable worth job evaluation to assess and correct the undervaluation of female-dominated and minority-concentrated jobs in specific workplaces.
• Strengthened labor laws and support for workers' right to organize so that equal pay policies and comparable worth job evaluation can be bargained collectively.
• Tougher enforcement to ensure compliance with the existing Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964. When it comes to legislative priorities, working women cite stronger equal pay laws more than any other issue.15
• Expansion of compensatory and punitive damages for equal pay violations.
• Passage of federal legislation prohibiting employers from retaliating against employees from sharing salary information and requiring employers to release summary payroll statistics by gender, race, ethnicity, and job category.
• Amend existing legislation to incorporate the principle of equal pay for equivalent jobs.

Notes:

1. The racial-ethnic minority percentage includes only African-American plus Hispanic origin. Calculated from U.S. Department of Labor, Bureau of Labor Statistics, "The Employment Situation: July 2002." Washington, DC: USDL 02-414. Available: <http://www.bls.gov/news.release/pdf/empsit.pdf>

2. U.S. Department of Labor, Bureau of Labor Statistics, "Highlights of Women's Earnings in 2000," Washington, DC: BLS, Report 952, 2001, Table 1. See also a new report available at http://www.bls.gov/cps/cpswom2001.pdf

3. U.S. Department of Labor, Bureau of Labor Statistics, "Highlights of Women's Earnings in 2000." Washington, DC: BLS, Report 952, 2001, Table 14. Available: <http://www.bls.gov/cps/cspwom2000.pdf>

4. National Committee on Pay Equity, Erase the Bias: A Pay Equity Guide to Eliminating Race and Sex Bias from Wage Setting Systems. Washington, DC: NCPE, 1993, p. 25.

5. Much of the research discussed below is summarized in Deborah M. Figart, "Pay Equity and Race/Ethnicity: An Annotated Bibliography," Hyattsville, MD: National Committee on Pay Equity, October 2001.

6. Deborah Anderson and David Shapiro, "Racial Differences in Access to High-Paying Jobs and the Wage Gap Between Black and White Women," Industrial and Labor Relations Review 49 (2), 1996, pp. 273-286.

7. Barbara Kilbourne, Paula England, and Kurt Beron, "Effects of Individual, Occupational, and Industrial Characteristics on Earnings: Intersections of Race and Gender," Social Forces 72 (4), June 1994, pp. 1149-1176.

8. Valerie A. Rawslton and William E. Spriggs, Pay Equity 2000: Are We There Yet? Washington, DC: National Urban League Institute for Opportunity and Equality, SRR-02-2001, April 2001.

9. James N. Baron and Andrew E. Newman, "Pay the Man: Effects of Demographic Composition in Prescribed Wage rates in the California Civil Service," in Pay Equity: Empirical Inquiries, eds. Robert T. Michael, Heidi I. Hartmann, and Brigid O'Farrell, Washington, DC: National Academy Press, pp. 107-130.

10. Catherine White Berheide, Cynthia H. Chertos, and Ronnie Steinberg, "Pay Equity for Blacks and Hispanics in New York State Government Employment," in Pay Equity: An Issue of Race, Ethnicity, and Sex, Washington, DC: National Committee on Pay Equity, pp. 70-108.

11. Donald Tomaskovic-Devey, "The Gender and Race Composition of Jobs and the Male/Female, White/Black Pay Gaps," Social Forces 72 (1), December 1993, pp. 45-76; see also Donald Tomaskovic-Devey, Gender and Racial Inequality at Work: The Sources and Consequences of Job Segregation, Ithaca, NY: ILR Press.

12. Bonnie Thornton Dill, Lynn Weber Cannon, and Reeve Vanneman, "Race and Gender in Occupational Segregation," in Pay Equity: An Issue of Race, Ethnicity, and Sex, Washington, DC: National Committee on Pay Equity, pp. 11-70.

13. June Lapidus and Deborah M. Figart, "Remedying 'Unfair Acts'": U.S. Pay Equity by Race and Gender," Feminist Economics 4 (3), Fall 1998, pp. 7-28.

14. Barry T. Hirsch and Edward J. Schumacher, "Labor Earnings, Discrimination, and the Racial Composition of Jobs," Journal of Human Resources 27 (4), 1992, pp. 602-628.

15. AFL-CIO, "Ask A Working Women." Washington, DC: AFL-CIO. Available: <http://www.aflcio.org/women/survey1.htm>

This Policy Brief was written by Deborah M. Figart, Professor of Economics, Richard Stockton College, Jim Leeds Road, Pomona, NJ 08240-0195.