# News US News: black/white pay gap rising due to discrimination

1. Sep 20, 2016

### kyphysics

http://www.usnews.com/news/articles/2016-09-20/black-white-pay-gap-climbing-due-to-discrimination

2. Sep 20, 2016

### Bystander

"– and other unmeasured and unobserved characteristics – "

3. Sep 20, 2016

Staff Emeritus
Junk science.

I am willing to believe that racial wage gaps are growing, although even this is difficult to measure: median income and median income of the employed are different numbers, as are mean income and median income. However, they provide exactly zero evidence that this is due to discrimination. Their position seems to be "if it's not a variable we controlled for, it must be discrimination". Worse, they could have corrected for that - looked at African-American led corporations (American Express, TIAA-CREF, and in the period they measure, McDonalds) and measured the size of the effect. Worse still, they mix science with policy, even when the science doesn't support the policy: for example, they claim that a great deal of the disparity occurs at the top end of the income spectrum, but argue that this says we need a higher minimum wage.

I am sympathetic to their goals. Junk science is not the way to reach them.

4. Sep 20, 2016

### mheslep

Their goals and motivations are unclear. I find when the motivations of the purveyors of junk science become clear they are seldom noble (e.g. Lysenkoism)

5. Sep 20, 2016

### mheslep

6. Sep 20, 2016

### OCR

Lol...

7. Sep 21, 2016

### kyphysics

mheslep, although Thomas Sowell is a very smart man, he's simply wrong there - at least, when it comes to modern day racial wage gaps..

It should first be noted that he's giving his opinion from decades ago! lol. At best, that was true back then, but I still don't think he's entirely correct there (for those years). I won't speculate if he's a paid shill for conservative think tanks, who believes a different opinion than the one he's espousing in that video, but I do know he's associated with some conservative think tanks.

Possible ulterior motives aside, he's completely forgetting tax changes over the years. From the at least the 1980's to 2016, we've seen tax rates for top earners being cut, while inequality in income has grown for the bottom 90% of Americans. African Americans who were already worse off economically before these tax cuts were hit harder during these times.

Reasons include structural disadvantages (like less programs helping the poor and, but also flat out racial discrimination.

Yes, I'm assuming racial discrimination existed in hiring back then, because I don't know of any studies (not really my area of studies). I just assume it was worse then versus now, given the outward racial progress we've seen over the years in the U.S. (first black President, for example, and lots more progressive people). But in terms of modern day wage and job discrimination, you can look up Roland Fryer's research. IIRC, he's Harvard's first black professor under the age of _____ (something cool like that...cna't remember the exact accolade).

He's done research showing race discrimination in the job market. It does exist.

As to how much it accounts for the increasing racial wage gap in the OP article, I can't say.

8. Sep 22, 2016

### Staff: Mentor

This is largely a myth due to the fact that the wealthy pay virtually all of the income taxes anyway (top 20% pay 87% of the income taxes) and the poor and lower-middle earners pay nothing or less than nothing (45% of households in 2015). As a result, tax cuts will always necessarily "favor" the wealthy, since you can't cut income taxes for people who don't pay income taxes. Essentially, the growth in income inequality has enabled the rich to pay an increasing share of the income taxes despite decreasing top tax rates (note: due to rising incomes, that doesn't necessarily even mean the rates they pay have decreased, since more income means more paid in the higher tax brackets). The share paid by the top 20% has increased to that 87% from 57% in 1969 and 69% in 2005.

This "inequality" isn't talked about much by the media, but presents a serious political/social danger in my opinion.

http://www.marketwatch.com/story/45-of-americans-pay-no-federal-income-tax-2016-02-24
http://www.nbcnews.com/id/29861648/...ll/t/how-tax-burden-has-changed/#.V-O4DPkrK00

Last edited: Sep 22, 2016
9. Sep 22, 2016

### Staff: Mentor

One takeaway from the article on a part of the issue that appears real:
Their proposal:
I'm not really sure what a "summit" is or even whether that is supposed to figure out the cause or correct it. My suggestion is doing a statistical study of that specific issue. Potential demographic cause and way to investigate:

More people are getting degrees today than in the 1980s. But are they getting useful degrees? And has the value changed? Examine how the value of degrees in general and different types of degrees in particular has changed over time. This should be able to identify if, for example, the distribution of degrees by race has stayed the same but the inequality between the valuable and low-value degrees has increased. What to do about that would be a harder problem to tackle though, since higher-income degrees such as those in STEM already have outreach programs to try to attract minorities (and women). Perhaps we could add push-away programs to discourage minorities from majoring in low-return fields...such as African American Studies?
http://www.pbs.org/newshour/rundown...-represented-among-low-paying-college-majors/
Note, this explains at least part of the gap though not necessarily how it has changed over time.
http://www.chicagotribune.com/news/...studies-college-major-met-20160905-story.html
Wow. I'm a big fan of irony, but this one makes me sad.

Last edited: Sep 22, 2016
10. Sep 22, 2016

### mheslep

Which Sowell says as well.

Edit: From ~11:00 in the clip
Above you patronized and smeared the motivations of a scholar. You might reconsider, take another look at what he says.

Last edited: Sep 22, 2016
11. Sep 22, 2016

### mheslep

In any case taxes are irrelevant to the OP point, wage discrimination. from employers.

12. Sep 22, 2016

### OmCheeto

It's a myth, as long as you define "income taxes" as "federal taxes".

If you were to include all taxes, then, the numbers kind of swing the other way.

I do believe, that even Warren Buffet said something to that effect.

13. Sep 22, 2016

### Staff: Mentor

I'm OK with including that as part of the issue. It affects take-home pay at least.

14. Sep 22, 2016

### mheslep

The OP issue is racial discrimination as it might effect wages. Federal income taxes are not explicitly discriminatory, other than on the *amount* of net income. The distinction is important, as certainly any proposed corrective action in the workplace has nothing to do with taxes.

15. Sep 22, 2016

### Staff: Mentor

I think you need to learn to think more like a liberal: The Oppressors are clever and nefarious, so they utilize demographics to promote their racist agendas. So, decreasing taxes for the rich and increasing them for the poor (if that were true ) is a clever tool of the racial oppression. In this case, The fact that the policies don't mention race is besides the point and only serves to add plausible deniability.

16. Sep 22, 2016

### Staff: Mentor

Yes, which kyphysics did when bringing up the issue.
It depends on the spin.
Yes, and what he said about it was wildly misleading. Very disappointing for such a highly respected businessman.

Last edited: Sep 22, 2016
17. Sep 27, 2016

### Staff: Mentor

IIRC, he was comparing his tax rate he pays versus the rate at which his secretary is taxed, not the actual dollar value of the taxes each of them paid.

18. Sep 27, 2016

### OmCheeto

I actually did about 6 hours of research on this the other day.
Of course, it's quite the pain in the behind doing taxes for all 50 states, at different rates, so I didn't take everything into account, so I'm sure my numbers are a bit off.
But here they are anyways:

Code (Text):
income                    tax rate*
minimum wage($15,000): 36.0% median salary($52,000):   41.1%
healthy salary($400,000): 42.3% Romney 2011($13,700,000): 26.4%
Trump:                    ?????
I ran the numbers for Romney this morning, after yesterday's Trump tax burden "revelation".

*Rates are based on federal income, median state income and sales, ssi, and medicare taxes. Filing as an individual with no dependents.

19. Sep 27, 2016

Yes, and what makes it misleading is that his "secretary" (probably doesn't actually have that title) probably makes on the order of $200,000 a year. But since he doesn't tell us, he makes his point using an unspecified outlier as an example. That's an extremely slimy/misleading argument. And while we know more about Buffet himself, and it is understandable that he would use himself as an example, he is also an outlier. The point being, that his example is nowhere close to generally true: except for a very tiny/limited chunk of the nebulous "rich", the rich pay much higher income tax rates than the typical "secretary". http://www.politifact.com/truth-o-m.../does-secretary-pay-higher-taxes-millionaire/ In fact, I'd wager (and can look at the numbers later) that the typical "secretary" who is single pays less than zero in regular income tax and only slightly above zero when you add the payroll tax. Last edited: Sep 27, 2016 20. Sep 27, 2016 ### Mark44 ### Staff: Mentor Again, the tax rate itself is pretty much meaningless on its own, and is misleading if the actual amounts of taxes paid are omitted. Doing very crude calculations (wage * tax rate), I get these figures, based on the numbers you posted: Wage -- Taxes$15,000 -- $5400$52,000 -- $21,372$400,000 -- $169,200 Romney --$3,616,800

This is what Russ was talking about with the top 20% paying 87% of the federal income tax burden.