Segregation and the Racial Wage Gap of Economics - Research Paper Example

Segregation and the Racial Wage Gap of Economics of race and gender Introduction “Gender equality and women’s empowerment are human rights that lie at the heart of development and the achievement of the Millennium Development Goals (MDG)” (UNDP, “Women’s Empowerment”). Further United Nations observes that women lag behind men in access to land, credit, and decent jobs, even though a growing body of research shows that enhancing woman’s economic options boosts national economies (UN Women, “Focus Areas”). Universal Declaration of Human Rights made a landmark declaration on 10 December 1948 reaffirming that “all human beings are born free and equal in dignity and rights and that everyone is entitled to all the rights and freedoms – without distinction of any kind such as race, color, sex, language, religion, birth or other status” (UN, “Global Issues”). Though the world’s governing body has formulated policies for the development of gender equality and elimination of racial discrimination, numerous issues come to light regarding racial discrimination at schools, workplace; gender discrimination, etc. The major issues coming into discussions are about the racial and gender inequality at workplace, discrimination in wages, etc. in spite of various legal provisions available to assist the victim. This paper looks into such cases of discrimination and segregation at workplace with regard to unequal pay and race while reviewing cases published in various newspapers, magazines, journals and online articles. Body Wage Gaps based on race and gender inequality Occupation gender segregation is the strong feature of the US labor market as it is inefficient economically, preventing able people from moving into occupations where they could perform well. Occupation segregation is important point for discussion because occupational choice is constrained by socialization, lack of information, or more direct barriers to entry to training or work in occupations where one sex is small minority of the workforce (IWPR, 13). Various legislations have been passed in different countries regarding equal pays, right to living with dignity, etc. but the differences still persist in society at large. According to Alfano (Report: Race Gap in US Persists) the median income for white households was $50,662 in the year 2005 as compared to $30,939 for black households and $36,278 for Hispanic households which shows there is huge income gap among the non white and white households revealing the discriminatory practice in income generating opportunities. According to the Economist (Race and Red Tape) black workers in America earn less than their white peers due to less education, skills, knowhow and experience than the whites. However, the article reveals the bias attitude of American companies stating that the companies are more likely to interview white person than the black person, if both of them have identical qualification. The dismal condition of black people is known for generation, gender discrimination is also at large with women entering the workforce competing with the men for the same position. The wage gap between male and female workers was huge when there were no policies protecting their rights. However the gap has narrowed down to 77 cents earned by full time female worker, irrespective of black or white, as compared to every dollar earned by men. However, the gap widens for African American women with 67.9% of men’s wages while Latinas earn 58 percent of men’s earnings (Pappas, “Women Intensely Dissatisfied with Pay Gap”). Rayner (Pay gap is growing between men and women) reported the statistics from Chartered Management Institute (CMI) which reveals that male managers are paid more than their female counterparts with same qualifications and talents. This scenario has been explained briefly in an article at Center for American Progress (Wage Gap by Numbers) wherein its is stated that women with more education lose more income. According to Candisky (Pay Gap for state jobs in shrinking) women are paid $9.41 per hour less in administrative positions whereas blacks earn much lower than any other racial groups. It further reports that there is 20 percent wage disparity for women in top level jobs, were paid $11.26 an hour less on average as compared to their male counterparts during 2007. Further analysis into wage gap reveals that blacks, the largest minority group earned the lowest wages during 2010. The major area of wage gap was seen in top administrative positions where black men were paid $3 less per hour than white male whereas black females averaged $1.43 less per hour as compared to white female. Though the wage gap persists in gender as well as in race, the gender gap seems to be larger than race gap because of the male dominated society, as observed by Ariane Hegewisch, study director at Institute for Women’s Policy Research. It was further observed that highest paid jobs had larger gaps. In yet another article published in Milwakee News Buzz (“Wisconsin’s malingering wage gap”), the issue of segregated wage gap is raised in Wisconsin. According to the report prepared by Women’s Council of Wisconsin and the Center on Wisconsin Strategy, median income for men of all ages was $18 during 2009 as compared to $14.50 among women. The report further states that the gender gap stubbornly persists irrespective of race, age or level of education, despite the growing importance of women’s contribution to the labor force and to household incomes. The report further clarifies that gender wage gap has stuck to its position and is not narrowing as it was during the past decade. According to Shriver report, women often work in low paying jobs despite achieving higher levels of education. According to the report “Women’s earnings and income” by Catalyst, asians were earning higher than whites during 2008 while Latinos were the lowest earning people with an average of $559 for men and $501 for women as compared to $825 and $654 respectively. Surprisingly, the wage gap between men and women for Whites and Asians were much wider during the year 2008 which is shown in the table below. The adjacent graph published by BBC News (Schifferes, “Discrimination in the workplace”) clearly indicates that Asian’s are earning equal or higher than the white people. Though there were several arguments about the equal qualification and skills among men and women, still women getting less pay as compared to men, the table in the report “Women’s earnings and income” shown below reveals the exact rate of discrimination among men and women according to their level of education. The ratio of wage gap between women and men vary from country to country. The highest percent of wage earned by women is 87% for each dollar in Hungary while the gap widens in countries like Switzerland, Korea, United Kingdom and Germany where the earning of women is limited to below 60% as compared to their men counterpart which is shown in the table below. The history of discrimination goes back to ages when there was great indifference between blacks and whites while women were considered to work only in the limits of house. Till then women has come a long way to come out of the house and shoulder the responsibility of earning with men. The discriminatory approaches in wage gap at workplace forced the government to formulate the Equal Pay Act 1964 to protect the interests of women and minority classes from discriminatory practices at workplace either in wages or promotion. As per the data published by U.S. Current Population Survey and the National Committee on Pay Equity, there is huge wage gap between white men and black men since 1970 prompting racial discrimination at workplace whereas gender discrimination is more severe in terms of wages wherein women were earning 58.7% of men’s earning while black women were earning 48.2% during the same period. Over the period of time, the wage gap has not been eliminated completely from the scenario but has been reduced to an extent with women earning 73.5% of men’s salary during the year 2006. The racial discrimination in regard to wages was higher as white women (73.5%) were earning comparatively higher salary than black men (72.1%) for the same period (“The Wage Gap, By Gender and Race”). Table: Wage Gap by gender and race Year White men Black men Hispanic men White women Black women Hispanic women 1970 100% 69.0% n.a. 58.7% 48.2% n.a. 1975 100 74.3 72.1% 57.5 55.4 49.3% 1980 100 70.7 70.8 58.9 55.7 50.5 1985 100 69.7 68.0 63.0 57.1 52.1 1990 100 73.1 66.3 69.4 62.5 54.3 1992 100 72.6 63.3 70.0 64.0 55.4 1994 100 75.1 64.3 71.6 63.0 55.6 1995 100 75.9 63.3 71.2 64.2 53.4 1996 100 80.0 63.9 73.3 65.1 56.6 1997 100 75.1 61.4 71.9 62.6 53.9 1998 100 74.9 61.6 72.6 62.6 53.1 1999 100 80.6 61.6 71.6 65.0 52.1 2000 100 78.2 63.4 72.2 64.6 52.8 2003 100 78.2 63.3 75.6 65.4 54.3 2004 100 74.5 63.2 76.7 68.4 56.9 2006 100 72.1 57.5 73.5 63.6 51.7 Source: U.S. Current Population Survey and the National Committee on Pay Equity. Why the Gap exists? According to Blau and Kahn (6) women tend to accumulate less labor market experience than men due the traditional division of labor by gender in the family. Women have lower incentives to invest in market oriented formal education and on the job training because of the discontinuous work lives. Further women have to shoulder family responsibilities because of which they spend less time at workplace. Miller (Despite Stride by US Women, Wage Gap Remains) mentioned that employed married women aged between 25 to 54 years spent less time at workplace during 2009, as compared to married men of same age group. According to Newman, occupation segregation is another cause for wage gap between men and women. In a study, it was found that women in female dominated jobs earn the lowest wages as compared to men in male dominated jobs. Some economists and policy makers argue that the wage gap is essentially an institutional byproduct that exists because men on the whole have more work experience and training, work more number of hours, and more likely to work full time schedule than women. The wage gap is persistent even in the factors like experience, age and education. The average income of female workers in the United States is significantly lower than that of men with the same level of educational attainment. Men with bachelor’s degree earn 60 percent more than women with bachelor’s degree (197). Schifferes (“Discrimination in the workplace” education is one of the most important factor wherein black men, specifically, have lower levels of education as compared to the population in whole. Geographical mismatch is another factor that causes the people to work in low wage job to eke their livelihood. According to Pappas (“Women Intensely Dissatisfied with Pay Gap”) child rearing responsibilities cause mothers to choose lower paying, flexible jobs and wage differences exist as they move in and out of the workforce. It is further reported that education, experience and race contribute to 33 percent of the gap. Few findings from the research suggest that employers are more likely to hire men than women due to their ability work long hours, even though both of them have equal skills and qualifications. Further analysis by IWPR (13) confirms the different role of educational attainment and vocational qualifications for male and female dominated jobs. Educational achievement is key for advancement along the earnings scale which plays greater role in female dominated occupations and those with more even gender balance. According to an article published in Daily Mail (Pay gap between men and women rises as girls are stereotyped into careers), the pay gap between men and women is widening because they are still being considered to pursue stereotypical careers like clerical, housekeeping, teaching, secretary, etc. which yield lower salaries. Baroness Margaret, Chairwoman of Women and Work Commission criticized the UK government’s policies which were not able to promote not traditional jobs among girls even in the present scenario. It is further stated in the report released by Women and Work Commission that lower wages and lower savings leave women in vulnerable position in a situation of crisis and nations’ economy is damaged by such wastage of women’s skills and talents. The main reasons that block the road to total equality for women include their undervaluation of skills which reflect a range of social, historical and industrial factors, lower share of discretionary payments, and lack for formal recognition of women’s skills, family responsibilities and deregulation of the labor market affecting pay equity (NSW, “Why there is a gap between men’s and women’s earnings?”). Conclusion Segregation of wage gap among men and women is not a new issue as it has persisted for many years. The equal pay act during 1964 ensured that no human being is treated unequal on the basis of pay irrespective of caste, religion, sex and disability. Despite of numerous legislations, acts and policies, the wage gaps persists not only among men and women but also in race. Review of news articles and journals reveal that wage gap has widened from 2007 due to numerous factors like deregulation and recession. Wage gap is a serious concern to the economic development of nations and therefore a strict policy, not only protecting the rights, but also devising strategy to evaluate the implementation is necessary and need of the hour. Works Cited 1. Alfano, Sean “Report: Race Gap in U.S. Persists” 14 November 2006 CBS News.com. 18 Apr. 2011. Web 2. Blau, Francine D and Kahn, Lawrence M. Gender Differences in Pay, Working Paper 7732. National Bureau of Economic Research. (2000) 1-40 Print 3. Candisky, Catherine “Pay gap for state jobs is shrinking” The Columbus Dispatch. 12 July 2010 Dispatch Politics.com 18 Apr. 2011. Web 4. Center for American Progress ‘Wage Gap by the Numbers’ Womens health and Rights 6 Jan, 2009, americanprogress.org, 18 April 2011: Web 5. Daily Mail “Pay gap between men and women rises as girls are stereotyped into careers” Mail Online 29 July 2009 DailyMail.co.uk. 18th April 2011: Web 6. IPWR,. Separate and Not Equal? Gender Segregation in the Labor Market and the Gender Wage Gap, September 2010, US: Print 7. Miller, Stephen Despite Strides by US Women, Wage Gap Remains: Women’s earnings are higher percentage of family income. 3 April 2011 SHRM.org. 8th April 2011. Web 8. Newman, David M. ‘Sociology: Exploring the Architecture of Everyday Life, 2nd Brief Ed., Pine Forge Press, United States of America, 2011: Print 9. NSW Government, Why is there a gap between men's and women's earnings? industrialrelations.nsw.gov.au 18 April 2011: Web 10. Pappas, Stephanie “Women Intensely Dissatisfied with Pay Gap” Business News Daily. 26 July 2010 businessnewsdaily.com 18 Apr. 2011. Web 11. Rayner, Gordon ‘Pay gap is growing between men and women’ 05 Sept, 2007 The Telegraph, 18th April 2011: Web 12. “Race and Red Tape” The Economist. 13 November 2008 Economics.com, 18 Apr. 2011. Web 13. Schifferes, Steve “Discrimination at the workplace” BBE News, BBC.co.uk. 18 Apr 2011. Web 14. "The Wage Gap by Gender & Race Timeline History (White, Black, Hispanic, Men & Women)." Infoplease.18 Apr. 2011. Web. 15. UN Women “Focus Areas”. United Nations Entity for Gender Equality and the Empowerment of Women, UN Women.org. 16th April 2011. Web 16. UNDP “Women’s Empowerment” UNDP.org 16th April 2011. Web 17. United Nation “Global Issues” Women, UN.org. 16th April 2011. Web 18. “Wisconsin’s malingering wage gap”. News Buzz. Milwaukee Magazine. 27 April 2010. milwaukeenewsbuzz.com. 18 Apr. 2011. Web 19. “Women’s Earnings and Income”. Quick Takes. February 2010. Catalyst. 18 Apr. 2011. Web Read More