Income Inequality and the Persistence of Racial Economic Disparities

Abstract

More than 50 years after the Civil Rights Act, black–white family income disparities in the United States remain almost exactly the same as what they were in 1968. This article argues that a key and underappreciated driver of the racial income gap has been the national trend of rising income inequality. From 1968 to 2016, black–white disparities in family income rank narrowed by almost one-third. But this relative gain was negated by changes to the national income distribution that resulted in rapid income growth for the richest—and most disproportionately white—few percentiles of the country combined with income stagnation for the poor and middle class. But for the rise in income inequality, the median black–white family income gap would have decreased by about 30 percent. Conversely, without the partial closing of the rank gap, growing inequality alone would have increased the racial income gap by 30 percent.