The racial wage gap may be shrinking, but it’s still got a ways to go. Nationwide, Black people make 76 cents to white people’s dollar, according to the Department of Labor.
And it turns out that disparity starts pretty early on. In the fourth quarter of 2023, the median weekly earnings for full-time wage and salaried white workers ages 16 to 24 was $747 per week, according to the Bureau of Labor Statistics. The median weekly earnings for full-time wage and salaried Black or African American 16-to-24-year-olds was $614. Though a smaller gap than the national one, that still works out to be about 82 cents to white workers’ dollar.
Many people in this age group are only starting their careers and haven’t had much time to accrue work experience. So what explains their disparity in pay? Here’s what experts believe is playing into it.
‘What you’re really describing is the outcomes of adults’
Especially as it pertains to young people, job opportunities are often a direct result of their family situation.
“Children born in higher income and higher wealth families will have greater access to opportunities that their parents can present,” says Andre Perry, senior fellow at Brookings. A kid born to parents who work in law and advertising, for example, will have more access to internships or administrative positions in those higher paying fields than a kid born to parents who work in the postal service or the local transit system.
Statistically, Black people are overrepresented in lower paying fields. They make up 40.4% of postal service clerks, according to the Pew Research Center, where they make a median of $56,200 per year, according to BLS. They also make up 36.6% of bus drivers, transit and intercity workers, who make a median of $50,980 per year.
Conversely, they make up just 10.5% of computer and mathematical science occupations, according to the Economic Policy Institute, where the median annual salary is $100,440, and 6.9% of legal occupations, where the median annual salary is $95,170.
Children born in higher income and higher wealth families will have greater access to opportunities.
Andre Perry
Senior fellow at Brookings
The resulting family wealth can hinder access to higher paying jobs as well.
A college or high school kid can be offered a lucrative gig in a neighboring town, but if they don’t have a way to get there, it’s harder to accept it. “If your parents have a car, you’ll have more opportunities to get a premium job,” says Perry.
And even if public transportation gets you to that job, you “may be limited in the number of hours of work because [you] can’t use transportation at any time,” says Valerie Wilson, director of the EPI’s Program on Race, Ethnicity and the Economy.
“Whenever you’re talking about outcomes of children, what you’re really describing is the outcomes of adults,” says Perry.
Consider ‘where we know communities of color are concentrated’
Geographic location plays a role in how much young people ultimately get paid as well. It’s important to consider “the average wages in places where we know communities of color are concentrated,” says Laura Valle-Gutierrez, a fellow at left-leaning think tank The Century Foundation.
More than half of the U.S.’s Black population lives in the South, according to the Pew Research Center, a region with some of the lowest minimum wages in the country. The biggest Black populations live in states like Texas, where the minimum wage is $7.25 per hour, and Georgia, where the minimum wage is $5.15 per hour (for any employer that doesn’t fall under the jurisdiction of the federal $7.25 per hour).
There’s also variation in the youth minimum wage. Nationwide, under the Fair Labor Standards Act, employers are allowed to pay people younger than 20 years old $4.25 per hour for the first 90 days of employment. Some states follow that rule while others, like Minnesota, have implemented a higher $8.85 youth minimum. Minnesota’s regular minimum wage is $10.85 per hour.
“That can play a role as well,” says Wilson.
Finally, college degrees play into this disparity. While 11% of white 18-to-24-year-olds have a bachelor’s degree, according to the Census Bureau, 7% of Black 18-to-24-year-olds do. Some of the people in this age group “are working jobs that don’t require a post secondary credential,” says Valle-Gutierrez. “So that is part of why they’re having lower wages.”
Big picture, “I think it’s just important to keep in mind that these wage gaps that do start early really do result in a lifetime of consequences in terms of lifetime earnings,” says Valle-Gutierrez. Young people who start behind their peers have that much more ground to make up to reach similar wages, if they’re ever able to at all.
Want to land your dream job in 2024? Take CNBC’s new online course How to Ace Your Job Interview to learn what hiring managers are really looking for, body language techniques, what to say and not to say, and the best way to talk about pay. Get started today and save 50% with discount code EARLYBIRD.
This story originally appeared on CNBC
