The Income Differential Effects Among Women, Men and Women and Men of Color and Possible Solutions United States has a strong economy that makes this country a country that offers a better life for their citizens and people who migrate. Throughout the economic history, it is well known that the development of inequality and gap differential between genders has shaped their economy and socioeconomical status. The income differential has been uneven among women and men in America not only for people who have a college degree and/or high school diploma but for people of color as well, who have college degree and/or high school diploma. This issue has been there in the economy affecting all of these individuals for a long time. It has made a big impact and difference in society as well in the economy. Income differential is important address this issue due to the impact that it makes to women and men and also to women and men of color who experience this income differential, know how society can fix this issue and how to create an equitable economy.
The income differential has been affecting both genders in different ways, it might be a possibility that males are somewhat less affected from this issue than females. Throughout the years the wage gap between genders has decline. The author Hada Mandel in his article “The role of occupational attributes in gender earnings inequality” explained the reasons why occupational attributes has a lot to do with earnings inequality and how sociologist argued this issue has to do with the occupations offer in the labor sector. The first reason Mandel gives is the skills requirement, training time and/or the educational credentials that attribute individual workers and these workers are measured at the individual level (Mandel, 2016). The main key is that there is a similarity between individual and occupational attributes to occupations that required higher education and training levels. Moreover, sociologist argued that occupations contribute to the formation of inequality above and beyond the effect of individual attribution and this is shaped by the social structures that exist (Mandel, 2016).
In Mandel’s study, he challenges the idea of occupational attributes to the aggregate individual incumbents because there are not expected effects that affect the gap between genders but affects in the distribution of the compensation among genders, the author compares the mechanisms and the social closure that measures the gap. Mechanisms is based on the negotiation, wage structure and competition. While, social closure refers to the occupational attributes that is based on the educational credential or training time; it will increase the economic differentials between genders and it is expected to benefit, on average and every member prerequisite criteria men and women equally (Mandel, 2016). If this is true that the reason why there is such income differential is based on the occupational attributions (social closure), then the main question is how occupations can be changed in order to eliminate the gender segregation in occupations and how to eliminate the gender pay gaps by the unequal distribution. (add something to connect male and females of color and pay gap. There is such a debate whether earnings inequality I caused by occupational or by other factors such as, government policies and interventions, the skilled-biased technological change, globalization and deindustrialization and the free market mechanism. Dennis J. Snower argued that earnings inequality is the price people has to pay for the economic efficiency and the income people are willing to loss for a more equal division. (Snower 1998).
During the study made by Snower he acknowledges that the causes of earnings inequality is caused by the organizational change/revolution which means the skills and the transforming rewards received in their work. By saying this the more skilled an individual is the better opportunities they have to have a better income distribution for males and making an emphasis on the inequality can only be reduced by the expense of the economic efficiency, the wage efficiency and the insider-outsider approaches that imply that equality and efficiency can be promoted simultaneously creating a difference and eliminating inequality. Snower mentioned that without empirical evidence there is not such a significant change in the efficiency for economy, wage and the insider-outside approaches. Leaving the gap of not knowing if the organizational revolution will help to reduce such an earnings inequality and if the rich get richer and the poor would get poorer sending off gender to two different categories (poor and rich). Moreover, this wage gap not only affected their predominated ethnicity but it also affected women and men of color who were born in the U.S. but their parents are immigrants or people who immigrated in the last years to U.S. Predominated ethnicity experience these earnings inequalities in the first hand and affects them in a way that they can face discrimination; for immigrants and individuals of color experience not only discrimination but they can experience stronger effects in their wages.
The article “New Color Lines: Racial/Ethnic Inequality in Earnings among College‐Educated Men” by Chang Hwan Kim introduces the color line as “the impenetrable black-white divide that has long characterized the racial and ethnic hierarchy in the United States” (Kim, 2015). America has a big diversity, there are many people that migrate to U.S. seeking for a future that the economy of their origin country might not being offer for them. Along with these migrations, there are other factors that has been changing the line of color, such as interracial marriages, multiracial identification and immigrant assimilation that has shape the economy as a whole and wages. There is this stigma made by society that most immigrants come from a low-income background. As it is suggested by Miles Corak, the income inequality make the family background an important and strong role in the life of younger generations (Corak, 2013). If the economic background plays an important role in the younger generations this can either help them to pursue a higher education and in the future have better returns or for them to earn their high school degree and pursue immediately returns (finding a job). Not always generations who come from immigrant backgrounds or a different background have the opportunity to pursue a college degree, not only because of the money but the responsibilities they need to fulfill and the stigma passed throughout generations made by the America’s racial hierarchy that will keep them in a hard position of being able to stand as the person they are and not being excluded or being treat differently for the stereotypes made by society.
Furthermore, Individuals in general can be exposed to face discrimination in their labor sector. Gary S. Becker in his book call “The economics of Discrimination” mentions the effects of discrimination that exist in different groups made by these groups also. Becker made an statement of if discrimination made by predominated ethnicity will reduce the income of people of color and would help to increase their own self-interest (Becker, 1971). Becker emphasis the assumption of people of color usually suffer more from the market discrimination but no one has found the solution that can solve this issue. He also mentions if the assumption is right, predominated ethnicity would diminish their own salary and he asked if their income would be greater or less than the income of people of color. The authors (Richard Hogan et.al) of the “Racial Inequality in Men’s Employment and Retirement Earnings” argued that there are programs that are planned to reduce racial inequality and to narrow down the earnings gap. Rogan et.al discuss the racial differences in employment and pensions are quantified by education and employment status (Hogan et.al, 1997). Education seems to be the reason why there are wages differentials among ethnicity and gender. Hogan et.al suggest that there is a lack in the system in the comparation of the racial inequality in employment, retirement earnings and assets; they also mentioned that effects of inequality increased back in the days increased because the increase of racial inequality among retirees of older generations that brought the different employment wages cohort (Hogan et.al, 1997).
Tiering back to the Corak’s article and the main point of the economic background of a family decides the future of younger generations, whether it is good or bad their background will shape their lives according to their socioeconomic status and the education they can receive. During the study made by Hogan et.al they evaluate racial inequality in employment and retirement for men who were married to determinate if the findings would be the same as the assumptions. The findings were that racial inequality exist in employment since they work a few hours, they do not have as much of experience and their wages are low but over time in their retirement income would increase; meaning while people of color, men who are married in specific overtime will increase their retirement but still their retirement wages will not be greater than predominated ethnicity. On the other hand, women and people of color are overrepresented according to Samantha Waxman, who wrote the article “State Eitcs Make Work Pay for People of Color and Women”.
Eitcs is a program designed by policy makers to make work pay and help families with children that struggle on low wages. This program also encourages women who are single parents to work and increase their earnings to reduce the poverty that exist among them (Waxman, 2018). Ronald G. Ehrenberg and Robert S. Smith the authors of the book “Modern Labor Economics”, explain females who have higher education do not earn the same wages as males because the length of work life due to the changes in a women’s life such as maternity and their wages are flatter because for a women who have household duties plus children is hard to go back to a full time job that offers them flexibility. Most women who are married and single mothers have to find job options that offer them some time of leisure they have to give up in order to be mothers. As a result of this men have more stable wages and their wages increases rapidly. Women receive less on the job training because of child-rearing, many women decide to invest in their human capital to increase their returns and to have higher returns. There are employers who agree to employ women since there are policy to prevent discrimination but less females receive training because employers in the long run assume they will quit their jobs and all the investment made to train women will be lost as they leave their job. According to Suzanne Bianchi, all workers face struggles when they find intense to balance work and family. In the last decades, the labor force rate of mothers has increased from 47.4 percent to 71.6 percent and mothers who have infants decrease from 39.0 to 63.3 percent in the labor force (Bocheli, 2011).
John Pencavel the author of “a Life Cycle Perspective on Changes in Earnings Inequality Among Married Men and Women” shows that here is income differentials in a marriage, the income earned by women will make an increase in the household income which makes a positive impact for households’ income. The earnings inequality in a family can be equal to the inequality of the earnings of husbands. There is variation that can help and/or affects the income of the husband and the wife (Pencavel, 2006). Women seem to be a key piece in the income of a household because if the income of the husband decrease, the income of the wife can make up for the loss of the income and vice versa if the income of the husband increase, the income of the wife will make better off their economy and putting their household a better budget constraint. The inequality differential is real and affects everyone in their income distribution, household income and family background. The main reason seems to be in education and the family background, both play an important role and it is important to mentioned that the greater and better education is the most likely will be that this individual will be better off in the returns in the future and all of the human capital investment they do in the present will bring them greater returns. Many economists have studied this issue and many of them have make emphasis that the issue has narrowed down but have not change over the years. the growing in wages is shifting their demand/supply and their changes according to Frank Levy and Richard Murnane (Levy, 1992). Even though, many sociologist and economist have been trying to find solutions to solve the gap that exist, they have failed to develop programs/policies that help and support the equal distribution for both genders and people of color as well. There are many factors that needs to be changed in order for earning inequality to disappear. It is hard to find a solution that can help women in their process of equal distribution wages, because of the length of time of work based on their life changes (maternity), it is impossible to ask to a woman give up work to raise kids and vice versa give up kids to grow in their professional area. It seems that this is falling to the stigma women needs to be the take care givers and the men the supports and be the head of the household. I argue that to start finding solutions there is the need to take a lot of the stigmas the society have in order to make an advance and look forward to solutions.
Moving on to the economic side, in order for low income children to overcome the family background to move to a better off background there is a need of increasing equally wages but on the other hand, this can affect economy as a whole and there will be the need of new policies make by policy makers that will reverse the issues the economy could have. It is easy to say that this can be done because if that was the case long time ago this issue will be no longer an issue. It is hard to find the right solution that will benefit employers, employees and genders that will not discriminate them. In conclusion, inequality differential is a really important issue to solve because it is affecting women and men and their lives. Not having an equal distribution in wages makes a rough impact in the economy of United States. Income differential is important to address due to the effect that it makes to women and men and also to women and men of color who understands this income differential, know how society can fix this issue and in what way can it create a reasonable economy. Many economists have tried to solve this issue without a solution that will work for everyone and even when the inequality has narrowed down it has not been enough to say that United States have equal distribution among genders. It is also essential to emphasis that if the predominated ethnicity does not have equal distribution neither would have men and women of color. There is a lot of things to fix (social closure) before in order to fix it economically.