From the grassroots to the C-suite, the past decade has seen a growing focus on the stubborn racial disparities that persist in the US economy—contributing to the mass protests of 2020.
Yet a new report from The Conference Board finds that wage gaps have only widened between Black and White workers, even those of otherwise comparable backgrounds and qualifications. In 2010, for instance, Black men with a bachelor’s degree or higher earned 18 percent less than White men. By 2019, that gap had grown to 24 percent, driven by the striking underrepresentation of Black workers in high-paying industries and occupations.
Mind the Gap: Factors Driving Racial Wage Gaps and the Solutions to Close Themidentifies several factors that are leading to growing racial wage gaps at the same time US companies are elevating diversity and inclusion as a cornerstone of their brands and business strategies. If the trends of the last decade continue, today’s wage gaps are poised to grow as Black workers are severely underrepresented in fields and job markets likely to see the fastest growth in high-paying jobs. Yet the report also reveals how innovations like remote work can counteract these forces in the years ahead.
“As Americans mark Juneteenth, business leaders and policymakers alike must recognize the recent trends in racial disparities in the twenty-first century economy,” said Gad Levanon, Vice President, Labor Markets at The Conference Board. “Differences in educational attainment, lack of access to professional networks, and legacies of bias continue to play key roles in White-Black earning gaps. But increasingly, reversing these trends will require addressing deeply rooted labor market segmentation and geographical segregation in restricting access to high-growth fields.”
Among the report’s key findings:
The rise of the tech sector—where Black workers are especially underrepresented—has been a key driver of racial wage gaps over the past decade, especially among college graduates:
- Technology jobs have seen a remarkable increase in the number of high earners in recent years. However, only 4% of top earners in this group are Black, compared to 6% in other industries. Among software developers—which have seen the highest income growth of all—Black representation stands at just 3.3%.
- Black workers are similarly underrepresented in other booming fields for top earners, accounting for just 2.8% of top-earning CEOs and 3.8% of top earners in marketing management.
- Meanwhile, some industries and jobs with a large concentration of Black workers among top earners—including government, health, and education—are shrinking.
- As a result of this labor market segmentation, Black college graduates—and, to a lesser extent, White women as well—have seen their wage gaps widen compared to White men.
Geography is partly responsible for the low representation of Black workers in the tech sector—and opens avenues for addressing the problem:
- The issue of Black underrepresentation in the tech sector is not new, and previous efforts to address the gap have yielded little. But since 2020, a critical mass of CEOs and human capital managers have publicly pledged to diversify their ranks and build more inclusive cultures—a critical first step in acknowledging the issue.
- A heretofore difficult barrier is the mismatched geography of tech hubs and Black population centers. In cities that have seen the fastest growth in high-wage tech jobs—including San Francisco, Seattle, Austin, and San Jose—Black workers represent less than 2% of top earners.
- Meanwhile, more diverse cities—including Washington, DC, Philadelphia, New York, Houston—have seen the share of high-wage tech workers shrink or stagnate.
- Metro Areas with the largest overall Black populations also see the highest Black representation among top earners in tech—12% in Atlanta and nearly 20% in Virginia Beach–Norfolk. Tech companies can consider satellite offices in these locations to attract Black tech talent.
- Finally, the embrace of remote work can bolster diversity post-pandemic by opening positions to qualified Black talent unable or reluctant to relocate to heavily White West Coast tech hubs.
