Gender, Race and Sectoral Inequality in Megacities: Case Study of Banking and Financial Services Industry

Abstract

This article explores the issue of inequality by using the example of the banking and financial services industry workers’ wages in 2022 in the most famous American metropolitan areas, focusing on 3 of its dimensions: gender inequality, racial inequality, and pay gaps in this sector compared to others. The study is based on data from the American Community Survey (ACS) conducted by the Census Bureau. Population-level figures are derived using the replicate weights calculated in the article using STATA 16.1 software (the information in the ACS is contained in raw microdata form, the ACS is a probability sample, so the sampling weights derived by factoring in the non-response bias are essential to arrive at the population-level estimates). The financial services sector plays a significant role in the economies of these metropolitan areas, employing an average of 7.77% of adult workers (the highest in Phoenix (10.41%) and Dallas (9.77%)). The study showed that in these megacities, financial services workers earned 64.77% more in 2022 than workers in other sectors of the local economy, with the highest gap in New York (111.24%) and Boston (80.81%). Women in the financial sector of these cities earn, on average, 65.59% less than men, with the largest gender gap in Chicago (71.84%) and Dallas (71.26%). The earnings gap for black and non-white workers compared to their white counterparts in the cities studied averaged 36.16%, with the largest sectoral gaps in Houston (60.14%) and Riverside (55.06%). The findings can inform the development of policies that promote equitable pay practices, enforce stronger anti-discrimination laws, and support diversity and inclusion initiatives within the industry.