Introduction
The income disparities in America have persisted since the end of slavery. There exist a wide gap between the levels of income between the white and the African American irrespective of the U.S. GDP growth. The gap has nearly tripled from $ 85,000 in 1984 to $ 236,500 in 2009 (DeNavas etal 36). There are many causes and this may include house hold income, unemployment, education differences, home ownership and inheritance (Thomas 34). These inequalities can be traced back 300 years of physical, legal, cultural, political and economic discrimination which were all based on race (UN).
Although the Civil Rights Act of 1964 was passed which illegalized employers from discriminating employees on racial basis (Coleman and Major 216), the wages payable to the whites exceeded those of all the others save that one for Asians which was almost equal. In the year 1940, the Blackmans wage was only 48.4 percent of the white man’s wage. In the year 1990, the black man’s wage increased to 75 percent of the white man’s wage (US census Bureau 56).
The white and Asian Americans earn the highest median incomes and are concentrated on managerial, executive and professional occupations relative to the Blacks, Hispanics and American Indians. The Blacks and the Hispanic workers are not usually likely to get the blue collar jobs or service jobs. They are usually concentrated in the lower wage such as operators, laborers and fabricators instead of higher paying production and craft jobs within the same category. This disparity is not limited to women of various races as the White and Asian women are the only probable of working in managerial and professional occupations. On the hand, the black, Hispanic and the Indians are entitled to work in service occupations. As a result, gaps in median incomes between races arise.
Education
Education is one the main wage determinants which one can have in a life time. Therefore education causes the gap between the whites and the minorities who includes the African-American and the Hispanic. Lower wages means that the minorities shall live a poor life since they are unable to afford the basic needs that can be afforded by those who earn more. Education determines the type of occupation; the whites are more of professionals, executives and managers whereas the blacks and the Hispanic tend to occupy the blue collar jobs like fabricators, operators among others.
Public education in the US is offered on bases of the local property taxes which vary from one region to the other. This type of fund creates inequalities depending on the amount available to invest in education.
Unemployment rates
History
Soon after the end of slavery, the Blacks did not own any means of production. Aspects of farm tenancy and share cropping became more rampant to the disadvantage of the Blacks who remained dependants to the whites. In addition, the white were given loans on low interests while the Blacks were denied banking services and hence remained trapped in debts. Furthermore, the white were also able to go to the west and obtain the unclaimed land which was offered as a government grant. The Rights of the Black on the land grants were not enforced at all.
Nevertheless, during the great depression, when the social security was initiated, it exempted all the agricultural and domestic workers greatly affecting the African American and the Hispanics. This made African Americans and Hispanics to spend their savings on old age and also overburdened by the other dependents in the family who could not save enough to take care of themselves during the old age.
Inheritance
A good part of what is owned in America comes from what is inherited from the parents. It can also come from what mainly is transacted as a gift. It has been established that inheritance alone account for 10-20% of the differences in the wealth between Blacks and the Whites (US census Bureau 140). The overall results are that he Blacks and the whites are going to be in constant disparity where the blacks remain in poverty and the whites wealthier.
Investments
In general terms those with more assets tend to take riskier investments which have higher return rates. Therefore the whites invest more in the riskier investments than the Blacks and the Hispanics. The whites invest heavily on stocks than the Blacks and the Hispanics. As a result, the Blacks accumulate wealth at a much slower rate than the whites and consequently lead to income inequalities.
The factors explained above have led to extreme poverty among the Blacks and the Hispanics compared to the whites. Data shows that in 2009, poverty rates were 27.4% for the Blacks, 26.6% for the Hispanics, 12.1% for the Asians, and 9.9% for the non-Hispanic whites. It is thus very clear that the Hispanics and the Blacks are disproportionally poor (US census Bureau 212).
Solutions
There are several policies that have been proposed to help in the reduction of the wage gap between the whites and the minority Blacks and the Hispanics. However this cannot be limited to one minority group but is a general suggestion to solve the problem across the minorities.
Investment in Education
The most conspicuous of them all is greater investment in education. Massey (24), argues that the investment in education, especially in higher education will result in higher rates of economic growth and consequently lead to lowered income inequalities. This means that the Blacks and the Hispanics shall be capable of getting high paying jobs and hence higher wages. Due to the higher wages, the blacks and the Hispanics shall be able to take riskier investments and hence increase their total wage earnings.
Elimination of Racial segregation
Total elimination of racial segregation shall offer one of the best ways to remove wage inequalities in America. This shall mean that all the residents of America shall be able to get employment based on their experience rather than race. This shall consequently lead to more Blacks and Hispanics getting employment and hence lead to reduced wage inequalities. This can be done by simply enforcing the existing legislations. There are several legislations which include Fair Housing Act, Home Mortgage Disclosure Act and Community Reinvestment among others.
Auditing of workers
Specific auditing can be taken in companies to check the actual levels of inequalities and minimize them by a balanced recruitment exercise. Random audits can be carried out in the national, state and local grounds to ensure that inequalities are not persistent.
More legislation
Since the effects in America are also affected by globalization where countries which were less developed have continuously improved economically with more skilled labour and wealth creation, American has since been outsourcing experts in several companies. This needs to be addressed in form of legislation to determine the actual number of persons who can be out-sourced. This shall ensure that the poor Americans who mainly comprise of The Blacks and The Hispanics are protected since they bear the most of such effects. In general, the labour force can be organized to ensure that there is no any group that is left marginalized in economic activities.
Raising the minimum wage
Since most of the poorly paid people in the U.S. are the Blacks and the Hispanics, rising of the minimum wage is going to cushion them against extreme poverty. The states need to put up a policy raising the minimum wage so as to offer the poor an opportunity to safe and even invest. Since most employers are the rich whites, the gap between the poor and the wealthy will eventually be reduced by raising the minimum wage.
Provision of an all-inclusive environment of growth
The investment environ need to formulated such that majority of the people regardless of their tribe can invest in. Banking services can exclusively be offered to all without inhibiting policies that govern the financing institutions.
Work Cited
Coleman, Major G. "Job Skill and Black Male Wage Discrimination". Social Science Quarterly (2003). 84 (4): 892–906. doi:10.1046/j.0038-4941.2003.08404007.x. Print
Tackling Ethnic and Regional Inequalities". Combating Poverty and Inequality: Structural Change, Social Polics, and Politi. United Nations Research Institute for Social Development. Retrieved 18 October 2011.Print
Thomas Shapiro, Tatjana, Meschede and Sam, Osoro (February 2013). "The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide". Research and Policy Brief. Brandeis University Institute on Assets and Social Policy. Retrieved 27 November 2013.Print
Unemployed Workers-Summary: 1990-2010". Labor Force, Employment, & Earnings. U.S. Census Bureau. Retrieved 27 November 2013. Print
Angel, Jacqueline L. Inheritance in Contemporary America (2008). Baltimore Maryland: The John Hopkins University Press.Print
DeNavas-Wait, Carmen; Bernadette D. Proctor, and Jessica, Smith. "Income, Poverty, and Health Insurance Coverage in the United States:2009". Current Population Reports. U.S. Census Bureau. p. 15. Retrieved 27 November 2013.Print
