What Went Wrong? The Erosion of Relative Earnings and Employment Among Young Black Men in the 1980s

Abstract

This paper shows a widening in black-white earnings and employment gaps among young men from the mid-l970s through the 1980s that differs among subgroups. Earnings gaps increased most among college graduates and in the midwest while gaps in employment-population rates grew most among high school dropouts. We attribute the differential widening to distinct shifts in demand for subgroups due to changes in industry and regional employment, the falling real minimum wage and deunionisation, the growth of the relative supply of black to white workers that was marked among college graduates, and to increased crime, that was marked among high school dropouts. The differential factors affecting the groups highlights the economic diversity of black Americans.