Wage gap between high and low earners rising most among Hispanics
The earnings gap in the nation’s workforce has widened in recent years as the pay of high-wage workers has risen and the pay of low-wage workers has fallen. But while this double-edged phenomenon affects all racial and ethnic groups, Hispanics may be feeling the impact more acutely than others, according to a Pew Research Center analysis.
The median weekly earnings of Hispanics at the low end of the wage scale fell by 9.4%, from $278 to $252 (in fourth quarter 2013 dollars) between 2007 and 2013, years that span the Great Recession and the fitful economic recovery. Meanwhile, the median weekly earnings of Hispanics in the highest wage bracket increased 4.4%, from $1,604 to $1,675.
The earnings gap also stretched among other groups of workers, but to a lesser extent.
Among blacks, the median weekly earnings of those in the lowest wage bracket of the U.S. income distribution decreased 7.7% from the fourth quarter of 2007 to the fourth quarter of 2013 while the earnings of those in the highest wage bracket increased 1.9%. Over the same period, the pay of white low-wage workers fell 5.6% and the pay of white high-wage workers rose 3.4%. Among Asians, the earnings of low-wage workers were unchanged but the earning of high-wage workers increased 6.8%.
High unemployment and a rise in part-time work are likely explanations for the large drop in the earnings of low-wage Hispanic and black workers. As noted in a recent Pew Research Center Hispanic Trends Project report, unemployment rates for Hispanics and blacks peaked at 12.7% and 15.6%, respectively, in the fourth quarter of 2009. By comparison, among whites and Asians, unemployment rates peaked at 8% and 7.8%, respectively. During the recovery, from 2009 to 2013, unemployment rates for all groups improved, but among blacks, the rate was still in double digits at the end of 2013, standing at 12.1%.
Because part-time employees work fewer hours and earn less, their growing presence within a group can reduce the median earnings of the group. Among employed Hispanics, the share working part-time increased from 13.6% in the fourth quarter of 2007 to 18.7% in the fourth quarter of 2013. Meanwhile, the share of black workers employed part-time increased from 14% to 18.9%. The rise in part-time work was more modest among white workers—from 18.6% to 19.7%—and among Asian workers—from 14.1% to 15.2%.
Rakesh Kochhar is Associate Director for Research at the Pew Research Center's Hispanic Trends Project.