The 2023 “State of Working Wisconsin” report released by University of Wisconsin affiliate Center on Wisconsin Strategy at the beginning of September revealed that wages for some people of color rose enough to outpace inflation, while decreases in unemployment rates outpace national averages.
Though white workers in Wisconsin currently have the highest median wage, the median wage for people of color saw a noticeable increase as of 2022. In three years, the median wage for Black men rose by 13.6%, for Hispanic men by 7.5%, for Black women 4.2% and for Hispanic women by 16.2%, according to the report.
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According to the report wages for Black and brown people in Wisconsin have risen faster than inflation, decreasing income disparities between white people and people of color.
The COWS report also showed that the unemployment rates for Black people in Wisconsin, which previously fell behind national averages, are now outpacing them. The report shows unemployment rates dropped by 1.1% for Black Wisconsinites, while national unemployment for Black people only fell by 0.5% between 2020 and 2023.
“To be sure, the disparity [between unemployment rates for Black and white people] is still unacceptably high, but the direction of the trend is good news in Wisconsin,” the report said.
Unemployment rates are at a 50 year low according to the U.S Department of Commerce. This means the amount of job openings is at an all-time high, Bruce R. Ellig Distinguished Chair in Pay and Organizational Effectiveness Barry Gerhart said in an email statement to The Badger Herald. Because of this, there have been many more opportunities for Black people to gain employment.
COWS Associate Director and contributor to the 2023 “State of Working Wisconsin” report Laura Dresser said the spike in employment for people of color is largely due to the aftermath of COVID-19.
During the shutdown in Wisconsin, many people of color were employed as essential workers and were often obligated to perform in undesirable conditions, including working long hours in face-to-face environments and receiving very little to no sick leave, Dresser said.
Though these jobs did bring some benefits to workers such as a short term appreciation of wages, they were often paid minimum wage and were also more likely to be laid off, Dresser said.
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When the economy began to open up again at the end of 2020, many workers who had lost their jobs or worked in undesirable conditions during the pandemic were given a new platform to advocate for better working conditions and wages, Dresser said.
“There was a giant amount of turnover … They were moving to better jobs, demanding more than what they were making before. And that’s what’s lifted up the floor,” Dresser said. “And that’s why this period has seen a relative closing of the wage gap.”
However this upward trend in wages for people of color is not guaranteed to last forever, Gerhart said. The labor market is subject to constant change due to its reliance on the state of the economy.
The main concern is the likely return to normal for the labor market. With higher unemployment and less job opportunities, which may put workers of color at risk, Gerhart said.
To move towards closing the racial wage gap and keeping it closed, both Dresser and Gerhart said that reinforcing attributes that positively affect wages among people of color is the best solution.
“We know that very low unemployment rates don’t last forever,” Dresser said. “There’s cyclical variation in the economy, there will be higher unemployment rates. So it really matters that institutions and policies help shore up the low wage labor market …”
