![]() ![]() citizens are 3.7 times-370 percent-more likely to experience a minimum wage violation, compared to White male U.S. According to new research by Rutgers University labor market researchers Janice Fine, Jenn Round, Daniel Galvin, and Hana Shepherd, Black workers are 50 percent more likely than White workers to experience a minimum wage violation, and Latinx workers are 84 percent more likely to experience this serious labor market problem. This calculation is based on a combination of workers in states whose minimum wage is determined by the current federal minimum wage of $7.25 per hour, workers in states with a state minimum wage below the federal minimum, and workers in all other states who are currently earning less than $15 per hour.īlack and Latinx workers also are more likely to experience wage theft, where they are paid less than the statutory minimum wage by their employers, because of the ineffective enforcement of minimum wage standards. Increasing the minimum wage to $15 an hour, for example, would increase the earnings of 38.1 percent of Black workers, compared to 23.2 percent of White workers. And Black workers have the highest share of those who are paid the minimum wage among all major racial and ethnic groups in the United States. By design, minimum wages boost the pay of workers who are among the lowest-paid in the U.S. ![]() One of the primary reasons this racial wage divide is less severe at lower wage levels is because of the minimum wage. What is clear is that the wage gap between Black and White workers persists across the wage distribution and is larger at the top of end of the wage distribution, where Black workers are excluded from high-wage jobs. Yet a greater proportion of specific wage gaps between Black men and White men and Black women and White men are “unexplained” by the so-called human capital model or are interpreted by economists as the result of overt discrimination, compared to the gender wage gap between all men and all women workers, which is explained to a greater extent by differences in occupational segregation. The racial wage divide is one of the most persistent features of the U.S. Low minimum wages and the racial wage divide We then close with an analysis of what it would mean for economic security of Black and Latinx families to increase the federal minimum wage closer to a living wage. We then review who was covered historically by minimum wages, and how the changing real value of minimum wages over time and across geographic divides reflect continued structural racism. We first examine the role of minimum wages today in perpetuating the current racial income divide. This issue brief shows how minimum wages were and remain an important tool for racial justice. Centering racial justice in economic policy is critical to ensuring broadly shared growth in the future. Research from previous economic downturns highlights how these racial income disparities will not be alleviated by market forces in the eventual post-pandemic recovery. Why minimum wages are a critical tool for achieving racial justice in the U.S. labor market since the start of the current recession now appears to have stalled, leaving Black and Latinx workers with significantly elevated unemployment in the double digits. And the tenuous partial recovery of the U.S. Black and Latinx households today are more likely to report a loss in income and difficulty paying expenses. Indeed, the coronavirus recession demonstrates how persistent disparities in economic security by race and ethnicity are exacerbated in a crisis. Yet those reforms six decades ago are now increasingly unable to address racial income inequality without keeping pace with inflation and economic growth. Importantly, though, reforms in the 1960s turned the minimum wage into a critical tool for decreasing the wage divides between Black and White workers because Black Americans were overrepresented among low-wage workers who were not initially covered by the federal minimum wage. This was the case at its inception in some states in the early 20th century, as a key federal component of the New Deal reforms during the Great Depression, and today, amid the coronavirus recession. The minimum wage is one of the primary tools for raising the wages of low-income workers. High school students, union activists, and fast food workers rallying in New York City to demand a $15/hour federal minimum wage, April 2015. ![]()
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