Racial Disparities in Household Income

From US Census table B19013

In Los Angeles, black households earn 55 cents for every dollar white households earn. Latinos earn 65 cents for every dollar white households earn. Racial household income disparities are higher in southern California than the national average. While incomes across the board are higher in the LA region than nationally, whites earn significantly more, contributing to income disparities.

Nationally, black and latino households still earn less, but better, when compared to whites. Blacks earn 61 cents for every dollar white households earn; latinos earn 76 cents.

The disparity in household income is a result of people of color in low paying jobs, and lower labor force participation. In Los Angeles 53% of whites work in executive, management, professional or technical occupations. For blacks, that’s 27%, and latinos, 21%. Only 47% of whites work in clerical, sales, craft, laborer, or service occupations, as opposed to 73% of blacks, and 81% of latinos in LA.

In California’s state and local government employment, racial disparities still exist, but are less stark than in the private sector. Whites in 2017 earned a median of 71,500, with blacks earning a median of 64,200, approximately 10% less. Hispanics and latinos in state and local government employment earned a median of 62,700, 12% less than whites. While the wage gap still exists in California public employment, disparities are less. The civil service exam system’s standardized criteria, the grade and step system, compressed wage scales, and high rates of unionization may contribute to reduced inequality when compared to the private sector.

Local governments have painted black lives matter on the boulevards of US cities, and instituted limited police reforms, while diverse groups such as the Union of Reform Judaism have called for reparations for African-Americans.

Short of large scale capital transfers from wealthy elites and financial institutions to black households, what do reparations look like?

Workers, union members, community advocates, civil society, and policymakers should look to inequality and racial bias in the labor market to overcome America’s painful history of racial class stratification. Looking at why there are such high rates of inequity in the private compared to public sector labor market is key to repairing a fissured and unequal society.

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