ECONOMY-U.S.: Wage Racism Affects the Wealthy

By IPS Correspondents

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WASHINGTON, Aug 20 (IPS) - They wear silk suits, drive expensive cars, and exude the self-assurance of the well heeled but at the top of the U.S. wage ladder, black men generally stand a few rungs below their white counterparts, according to a new study.

A study in the current issue of the American Sociological Review followed more than one million workers and found that even as black men enter high-prestige professions, they earn as little as 72 cents for every dollar paid to white men in the same occupation.

The more than 470 jobs covered by the study included lawyer, physician, dentist, and securities and financial service sales representative.

Earlier studies of income differentials also have looked at black and white workers but the latest study is the first to focus on differences within the same occupations. It only analysed data on men. The authors said a similar survey of women is forthcoming.

The greatest inequality in pay was in securities and financial sales, where black men working earned 72 cents on the dollar compared with white men.

Black dentists and physicians earned 80 cents for every dollar earned by their white counterparts. Black lawyers earned 79 cents for every dollar earned by white lawyers.

The disparities persisted even when the black and white men had the same education and work experience.

However, the study found that in jobs with lower status - including cooks, taxi drivers, and upholsterers - blacks earned virtually the same as their white co-workers. Wages in these jobs are typically based on production, and there is less room for race-based factors, the authors said.

By contrast, the higher the occupational level, the more 'intangible' the nature of the work and the fewer blacks there are - prime conditions for wage racism.

The researchers also found fewer wage disparities in the public sector than in the corporate sector. Government jobs and wages are generally determined by merit, education and experience, leaving managers less discretion over hiring, firing, and promotions.

Businesses discriminate not only in compensating staff, but also in giving them assignments, according to the study.

Xerox Corporation, for example, is being sued by several of its black sales representatives for allegedly assigning the most profitable territories and sales accounts to whites.

The company has denied any wrongdoing and vowed a vigorous defence in court.

Anne Mulcahy, president of the company most famous for its photocopiers, told employees in a letter last month: "We treat diversity as a business goal. The goal is creating and maintaining a supportive, inclusive work environment for all employees."

The study, however, suggested that it is common for black professionals to be matched with black clientele because supervisors believe black staff will relate better to black customers, and whites to whites.

The problem for the average black salesman is that black businesses, like black families, tend to earn less than their white counterparts and therefore have less to spend. Thus, black sales professionals given largely black client populations are doomed to relatively low incomes, fees, and commissions.

The phenomenon is particularly pronounced in high-level service occupations such as securities and financial sales, where professionals solicit and service clients' investment or banking needs. In such cases, earnings are especially dependent on commissions from sales and trades of stocks, bonds, or other investment and savings vehicles.

Yet, black men in financial firms are perhaps even more likely to be steered to black or other 'lower net worth' clients because whites are considered to have more of the 'soft' or 'people' skills needed to interact with wealthier - overwhelmingly, white - clients. Such 'skills' often boil down to dress and demeanour and are measured by the ease of interaction, much of it social, with clients. (END/IPS/NA/IF/AA/01)