Job Differences by Race and Ethnicity in the Low-Skill Job Market

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Abstract

This brief uses data from the 2007 Survey of Employers in the Low-Skill Labor Market to examine differences in the noncollege jobs held by workers of different races and ethnicities and the impact of these differences on wage rates.

Introduction

While the wages earned by whites and nonwhites in the United States have become closer over the past quarter-century, a gap persists. In 2005, the median hourly wage of black men was $12.48, compared with $17.42 for white men (Mishel, Bernstein, and Allegretto 2007). According to past research, differences in the education, skills, and experiences of white and nonwhite workers along with differences in the industries and types of firms that employ them account for some of this gap; however, differences in these factors can themselves be the result of discrimination.

Whether such factors as test scores can totally explain the difference in race wage differentials is a point of debate.1 Some claim that any remaining gap in wages after taking into account workers’ skills and backgrounds and the characteristics of their employers reflects discrimination in the labor market. Others suggest that unobserved but very real differences in workers and jobs account for the remaining pay gap.

Another potential explanation for differences in wages across race and ethnicity is differences in the type of jobs workers hold—what the job requires and what the worker does. Employers who know workers’ job skills sort them into different types of jobs; this may account for some of the pay differences between racial and ethnic groups. Since these job characteristics are often unavailable in the data researchers commonly use, they have rarely been considered in understanding pay differentials.

This brief uses data from the 2007 Survey of Employers in the Low-Skill Labor Market to examine the differences in jobs held by workers of different races and ethnicities and the impact of these differences on wages (see box for more information about the survey). We focus on the less-skilled labor market because many workers in this sector are either newly entering the labor market or struggling to make ends meet. Policymakers are concerned about how to improve these workers’ earnings generally, along with specific issues for young black men and immigrant workers. Understanding racial and ethnic wage differences for less-skilled workers and the potential role of discrimination will help address the need for and creation of targeted policies to improve wages for these workers.

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