The American condition, no matter how one measures it, inevitably comes back to jobs and wages. Wage inequality, whether between men and women, or African-Americans and whites, is a real concern.
Civil unrest in 350 of the 390 major metropolitan areas of the United States is not only a function of demands for social justice, but also the result of economic frustration driven by longstanding differences in income and wages.
The American economy is rife with inequality: until that difference narrows and is eventually evened, notions of social justice are unrealized. In this realm, it is not words, but actions that count.
Take inflation-adjusted weekly earnings of salaried employees since 1979, the start of an extended period of wage stagnation. The profile for males in the chart below illustrates that in real, inflation-adjusted dollars, earnings have been flat since that time; were it not for 0.4% average annual increase in wages since 2000, they would be down.
In plain English, working men are stuck in neutral; they have not had a raise in 21 years. Since the demise of trade unions during the 1980s, many of the jobs that men without higher education could do have been lost. They have been replaced by automation and advanced technologies, shipped to lower-wage countries or sent to states where unions have little power.
Weekly wages of women have been rising at a steady clip of 0.7% per year, and have increased to 80% of male wages from 60%. That speaks to the growing presence of women in the labor force.
The wage inequality of African-Americans, even compared to the bleak condition of blue collar workers, is far starker. Data collected since 2000 on the wages of African-American workers show that their real earnings remain at only 73% of male employees overall, and have decreased to 91% form 97% of female employees overall.
The preservation of a sense of entitlement by the privileged has continued throughout our history, despite the contributions that all ethnic groups have made to the great American mosaic. That sense of entitlement has generated both indirect and direct self-segregation that underscores those wage differentials and has resulted in an inequitable distribution of resources, education and investment that is directly linked to economic inequality across race and gender. Whether it be the passive self-segregation seen in the inequity of suburban and inner-city schools, or the systemic segregation and racism embedded in the domestic system of finance manifested in the red-lining of black neighborhoods, the result is the same–an economy that is separate and unequal.
Perhaps just as important, those inequalities generate a sense of entitlement and privilege among those who are unwilling to recognize the inequities embedded in the economy and society. Change will be hard won.
Finding a way out
In crisis there is always opportunity. A pandemic-derived health crisis, combined with depression-like unemployment levels and society’s revulsion by the tragic deaths of African-Americans at the hands of police, give our country a chance to recommit to the promise of Abraham Lincoln and Franklin Delano Roosevelt.
Perhaps a renewed focus on the expansion of health care and a massive infrastructure project that benefits businesses, workers and the country at large could help mitigate mass unemployment, bankruptcies and an emerging eviction crisis.
Enforcement of federal guidelines for minimum levels of earnings and a sustained move toward a livable wage would eliminate the forced reliance of the working poor on the social safety net. Finally, increasing the supply of education for everyone, regardless of wealth, ethnicity or ZIP code, will lift incomes for the poor and minorities. As the figure below demonstrates, the higher the educational attainment, the higher the earnings. If someone wants to get ahead, we can give them the means to do so.
Following the lead of Georgetown University, we can level the playing field for U.S. workers. It means investing in public education from birth to the high school diploma and then in the form of guaranteed means to attend a state college. The research universities in each of the states are not only the centers of academic and social advancement in our society, but they are also at the center of the American economic development model. Exposure to that should be available to all, regardless of ZIP code or accumulated wealth.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.