Policy

This Economic Commentary examines differences between the earnings of white men and those of Black and Hispanic men before and after the COVID-19 pandemic. Following larger initial employment losses for Black and Hispanic men, after the pandemic this group experienced a narrower earnings gap relative to white men, bringing the median log hourly earnings gap to its lowest level of the twenty-first century. The analysis shows that this narrowing extends across both the earnings distribution and occupation groups and is not driven by changes in workforce age or education composition. The evidence indicates that the post-pandemic narrowing reflects broad-based relative changes in earnings rather than effects confined to lower-earning workers or to economy-wide earnings compression alone. 

This Economic Commentary explores the evolution of wage gaps between white and Black and white and Hispanic workers in the United States from 1980 to 2022. It analyzes wage gaps at various percentiles of the wage distribution and decomposes them to identify the factors driving changes over time. The findings reveal that while the gap between wages for white individuals and for Black men has narrowed at the 20th and 50th percentiles, it has expanded elsewhere, with the most significant widening occurring at the 80th percentile, particularly for Hispanic workers. Differences in educational attainment and occupations are the key factors that explain the observed wage gap trends.