Race And Gender Have Huge Impact On Income, But Not As Much As Education

race gender affect incomeA report from the U.S. Census Bureau confirms once again that higher degrees really are worth the heavy cost, when it comes to the boost it gives your lifetime earnings. Your level of education has more of an effect on your salary than your race, gender, ethnicity, citizenship, English-speaking ability or location. But race, gender and ethnicity in particular still matter -- a lot.

A fully employed junior high dropout earns close to $40,000 less than someone with a professional degree, as in law or medicine, when those two people are under 30 years old. And as these two individuals age, their salaries diverge increasingly. That junior high dropout will be making the same $20,000 a year or so at 60, while the J.D. will be taking home an annual average of $103,000, in 2008 dollars.

But if these numbers are parsed out by gender, race, and ethnicity, many more gaps appear, according to data collected between 2006 and 2008 by the American Community Survey, a large monthly national poll. And in general, women in even the most economically advantaged race groups, white and Asian, earn less than men in the most economically disadvantaged race and ethnic groups, black and Hispanic.

White males and Asian males with professional degrees have by far the highest earnings, which inch close to $5 million over a lifetime. An Asian woman with a professional degree makes the same over her lifetime, on average, as a white man with the lower earning power of a Ph.D. ($3.7 million).

A black man with a professional degree earns a little more, on average, than a white man with just a master's degree ($3.5 million). A white woman and a Hispanic man with professional degrees earn a little less than him ($3.2 million and $3.1 million, respectively).

Black women and especially Hispanic women fare the worst. A black woman with a professional degree earns the same as a white man with a bachelor's ($2.8 million). A Hispanic woman with a professional degree earns just a little more, on average, than a white male who has a degree from a community college ($2.3 million and $2.1 million, respectively).

In some cases, the race and gender gap only widens -- the more education a person gets. A Hispanic woman with just a high school education, for example, earns 60 percent of what a similarly educated white man would, but a Hispanic woman with a Ph.D. earns just 49 cents for every dollar earned by an identically credentialed white man.

But education remains the most effective way to improve your earning potential in absolute dollars (especially since gender, race and ethnicity aren't so easy to change). Someone with a professional degree will take home $72,000 more a year on average than an otherwise identical person with just an eighth-grade education, which is probably worthwhile, even if the median white man is taking home more.



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Ranting Loons

It does not sound like this study, at least as reported, takes into account what the degree is in. For example, stating that someone with a "PhD" in "ethnic studies" earns less that someone with an BS in some forms of Engineering.

A study was done at the University of Chicago (just looked at Sex, not race) that showed when you factor in experience, time off, etc, there was NO difference in the salaries earned. They noted in their studies that men tended to work more IN THE OFFICE. Yes, women tend to have a greater roll with the family, and that affects there overall earning potential. Should we penalize men who work more by paying them equal amounts?

November 18 2011 at 1:49 PM Report abuse rate up rate down Reply

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