What people earn on average differs among gender and race. Men earn more than women, and whites earn more than members of other races. But beyond these general facts, things get complicated: What jobs are people seeking and getting? What levels of education and experience are they bringing? Are the difference between full- and part-time work factored in? It’s hard to find a case for a true apples-to-apples comparison.
So the information coming out in a large ongoing study of postgraduate outcomes by the Minnesota Department of Employment and Economic Development, part of which was released last week, is useful for the general public as well as for academics and policymakers.
The study is an ambitious one that stems in part from action by the Minnesota Legislature to increase economic opportunities for members of disadvantaged groups. But this initial report only looks at those who graduated from post-secondary education from 2011 through 2013. It tabulates their earnings and employment status for the second year after graduation. This is a small subset of the entire population and one cannot make any inferences from it about all whites, all African-Americans, all Hispanics or whomever.
But what happens to people just out of college sets trends for themselves and broader populations in the future.
The headline findings is that two years out of college, whites earn more than members other groups, with Asians and Hispanics nearly tied for second and third, blacks further behind in fourth and those considered in two or more races and American Indians well at the bottom. In percentage terms, Asian and Hispanic recent graduates earn about 4 percent less than whites, blacks about 6 percent less and American Indians about 15 percent less.
That, however, is only for people with full-time, year-round jobs. As has been well publicized, lots of recent college grads have not been able to get such jobs. Factor in the hourly earnings of those with part-time work and results are different. Asians’ wages in such jobs are only 5 percent below whites, blacks 9 percent, Hispanics 10 percent and American Indians 21 percent.
The proportion of recent grads in part time work is in inverse proportion to wages, with American Indian highest at near 47 percent and Asians and whites down near 42 percent. Data limitations are such that over 20 percent of each group is “status unknown,” so one should not draw too-fine conclusions in this category. But it is generally true that the higher the proportion of a group in part-time or seasonal work, the lower the average annual earnings of the group as a whole.
The industries in which people find jobs also is an important determinant of incomes. Ten percent of Asians in the study work in manufacturing, with a median hourly wage of $22, but only 5 percent of African Americans and their median wage is about 70 cents per hour less. And for American Indians, manufacturing does not even appear in the top 10 sectors.
The “Temp Help” rubric is the fourth most common job for Blacks and sixth for Asians. For both groups, it accounts for 6 percent of all jobs but does not show up in the top 10 sectors for any other group.
“Nursing and residential care” is in the top 10 sectors for all groups except Asians but varies from over 14 percent for blacks to under 5 percent for Hispanics and whites. This is one sector in which the median wage for blacks, at $17.50 an hour, is greater than for any other group, including whites, who have a median 50 cents lower. America Indians in the sector earn 17 percent less than blacks.
Many of such discrepancies are because these are broad “industries” and not specific professions or college majors. “Nursing and residential care” includes registered nurses and people collecting soiled linen. “Manufacturing” includes skilled tool makers and common laborers pulling pallet jacks around in shipping and receiving.
For perspectives on this, DEED also published a set of useful studies in the December, 2015 issue of Minnesota Economic Trends, one of its quarterly publications.
One, written by Alessia Leibert, dissects “Racial Disparities in Wage and Employment After Graduation” from the same 2011-2013 data set. Its Table 2, which breaks down wages for recent graduates aged 21-30, gives tantalizing hints. For example, black and white men in health care earn equal amounts, but Asians nearly $5 per hour less. For women in the same sector, there is a $1 drop from white to black women and another 50 cents for Asians. In liberal arts jobs, there is only a 70 cent spread from the lowest paid, black men, to the highest paid, white women. In auto mechanics, black and Asian men have identical hourly earnings but in construction, blacks earn nearly $2 an hour less. In engineering, white men earn some $2.50 an hour more than women but for Asians, the relationship is almost exactly reversed.
The proportion of a racial or gender group in a particular occupation or sector is also key. For engineering, construction and mechanics, the proportion of all white workers who are in these well-paying careers is more than twice as high as for blacks. Tellingly, out of a population of over 100,000 graduates, only one African-American woman was in engineering. None were in construction and only two Asian women were. There were no female African American mechanics or repair technicians and only one female Asian in this career.
Nursing, however, is a relatively good field for black women. The proportion of white and Asian registered nurse graduates who work in hospitals, the highest paying category, is roughly twice that of blacks. But the median wages of the blacks who do work in hospitals is $2 to $3 higher than Asians and whites. The proportion of blacks working in nursing and residential care facilities is more than twice that of whites or Asians, and again, black wages are $1.50 to $2 higher per hour than Asians or whites. Nursing is one sector where, overall, the average wages for black women are at least as high as for whites.
This is a lot of detail. The point is to illustrate that many different factors enter into earnings outcomes for racial and gender groups. Looking through the data on occupational earnings and reading the analyses, particularly Liebert’s, teaches one a lot.
These studies all deal with post-secondary graduates. Within this group, there are different educational levels — from certificate programs of less than a year to doctorates. In general, minorities are over-represented in shorter-duration alternatives and under-represented in baccalaureate and post-graduate programs.
More importantly, much smaller proportions of minority groups, especially African-Americans, get any post-secondary education. This ties the DEED earnings studies released Wednesday to the Department of Education Minnesota Comprehensive Assessment test scores issued Thursday. These test scores seem stalled overall and the achievement gap between white and minority students remains large. Improving the educational attainment of minority students before they reach college is fundamental to getting them into the institutions and majors that will afford them good paying careers after college.
These recent DEED studies represent just the beginning of a multi-year initiative that is open to work by private sector research and social service organizations. These tabulations don’t give any clear answers or solutions. But they are valuable in helping us understand the key issues better.