Abstract
The article deals with racial disparities in the distribution of pre-tax wages and salaries for employed individuals in the USA between the ages of 18-65. This study is done for the ten largest metropolitan areas of the USA using the 2019 American Community Survey data. The metropolitan areas included in the study are Atlanta-Sandy Springs-Roswell, Chicago-Naperville-Elgin, Dallas-Fort Worth-Arlington, Houston-The Woodlands-Sugar Land, Los Angeles-Long Beach-Anaheim, Miami-Fort Lauderdale-West Palm Beach, New York-Newark-Jersey City, Philadelphia-Camden-Wilmington, San Francisco-Oakland-Hayward, and Washington-Arlington-Alexandria. Employing well over a quarter of the total employed labour force in the USA, these ten metropolitan areas are also some of the largest industrial worlds. Average pre-tax wages and salaries, the standard deviation of the mean and Gini coefficient by major racial categories are presented for each of these ten metropolitan areas. For each metropolitan area, black employed individuals earned less in pre-tax wages and salaries than white employed individuals. The Gini coefficient of black pre-tax wages and wages is also found to be smaller for each of the metropolitan areas compared to the white counterparts. It suggests a much tighter distribution in pre-tax wages and salaries for blacks compared to whites. Furthermore, employed workers from other races earned less in pre-tax wages and salaries than their white counterparts for each major metro. Except for Los Angeles-Long Beach-Anaheim metropolitan area, black employed workers also earned less pre-tax wages and salaries than members of the other races. The Gini coefficients of pre-tax wages and salaries for various metropolitan areas for different races are found to be broadly comparable and often larger than that of the whites. Together, these results point to the fact that the pre-tax wages and salaries of black workers are lower compared to both whites and other races and more tightly distributed. Lastly, the relative inequality between whites and blacks and others and blacks often point to the relatively broader dispersion in the later group compared to the former.
Highlights
The second half of the 20th century and the first two decades of the 21st century have seen significant increases in income inequality
The highest number of white employed individuals are found in New York-Newark-Jersey City, NY-NJ-P followed by Los AngelesLong Beach-Anaheim, CA and Chicago-Naperville-Elgin, IL-IN-WI
The highest number of employed individuals from other races is found in Los Angeles-Long Beach-Anaheim, CA followed by New York-Newark-Jersey City, NY-NJ-PA and San Francisco-Oakland-Hayward, CA
Summary
The second half of the 20th century and the first two decades of the 21st century have seen significant increases in income inequality. This phenomenon has attracted wide-ranging discussions in both press and academia (Acemoglu & Autor, 2011; Arrow, 1998; Autor, Katz, & Kearney, 2008; Bertrand & Mullainathan, 2004; David & Dorn, 2013; Glaeser & Resseger, 2010; Heckman, 1998). This paper focuses on pre-tax wages and salaries This source of income is expected to be most closely related to the labour market opportunities and impediments faced by an individual. The choice of pre-tax wages and salaries to analyze the income inequality and the methods adopted in this paper is most closely related to (Ray, 2021)
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