Sources of Inequality

The forces behind Washington's growing economic inequality

Declining unionization, and race- and gender-based discrimination are increasing economic disparities in the state.

Declining Unionization

While no single factor is entirely responsible for the growth in inequality, declining unionization has been a contributing influence.[8] Following the passage of the National Labor Relations Act in 1935, the spread of collective bargaining led to decades of faster and fairer economic growth that persisted until the late 1970s. However, Washington state has recently bucked the national trend, posting increases in union coverage and membership each year since 2015.

Tableau

Since the 1970s, however, declining unionization has fueled rising inequality and stalled economic progress for the middle class. Nationally from 1972 to 2007, one-third of the rise in wage inequality among men, and one-fifth of the rise in wage inequality among women, is attributable to declining unionization. Among men, the erosion of collective bargaining has been the largest single factor driving a wedge between middle- and high-wage workers.[9]

Tableau

Gender Pay Discrimination

Another persistent source of income inequality is the gender pay gap. In Washington, a typical woman (or one earning median wage) is paid 22 cents less per dollar paid to a typical man.[10] While the gender pay gap has declined since 1979, the state has not made any significant or lasting progress in closing the gap since the late 1990’s.

Tableau

The gender pay gap is not an education gap – nor is it solely a product of having fewer women in some industries than others. At every level of education, women are paid less than similarly educated men – and the wage gap rises with additional education. The gap also exists in all industries – including those in which more women are employed than men.[11]

Tableau

Gender Wage Gap, Washington

Sector Ratio of Female
to Male Workers
Yearly Wage Gap (Female vs.
Male Workers’ avg. earnings)
Health Care and Social Assistance 3.35 -$23,758
Educational Services 2.25 -$9,325
Finance and Insurance 1.71 -$45,737
Other Services (except Public Administration) 1.27 -$15,298
Accommodation and Food Services 1.17 -$3,556
Management of Companies and Enterprises 1.16 -$28,781
Arts, Entertainment, and Recreation 1.04 -$13,775
All Sectors 0.94 -$25,853
Real Estate and Rental and Leasing 0.91 -$11,878
Retail Trade 0.90 -$16,067
Professional, Scientific, and Technical Services 0.87 -$36,376
Public Administration 0.80 -$15,708
Administrative and Support and Waste
Management and Remediation Services
0.70 -$11,337
Agriculture, Forestry, Fishing and Hunting 0.56 -$9,502
Information 0.48 -$52,665
Transportation and Warehousing 0.45 -$15,864
Utilities 0.44 -$27,223
Wholesale Trade 0.43 -$20,916
Manufacturing 0.37 -$17,748
Construction 0.22 -$18,305
Mining, Quarrying, and Oil and Gas Extraction 0.16 -$19,573

Source: U.S. Census Quarterly Workforce Indicators, Full Quarter Employment (Stable); monthly wage calculated as 4-quarter average for 2017 Q2 through 2018 Q1.

Racial Pay Discrimination

The National Picture

All demographic groups are experiencing growing income inequality and slowing growth in living standards. At the national level, since 1979 median hourly real wage growth has fallen short of productivity growth for all groups of workers, regardless of race or gender. However, these wage trends are markedly different for men than for women, and for blacks relative to whites.

Median hourly wages for both white and black men have fallen, with black men suffering larger losses (7.2 percent, compared a 3.0 percent loss for white men). While median hourly wages of black and white women have increased, white women’s wages grew much more (30.2 percent) than those of black women (12.8 percent).[12]

Tableau

The Pacific Region

In the Pacific region of the U.S. (Washington, Oregon, California, Alaska, Hawaii), pay disparities by race and ethnicity have grown since 1979. While the median wage for White workers increased to $24.05/hour (+$3.58), for Hispanic workers it declined to $15.10/hour (-$0.33), and for Black workers it declined to $17.15/hour (-$0.93).[13]

Tableau

Put another way: in 2018 a typical (or median) Black worker was paid 29 cents less, and a Hispanic/Latinx worker 37 cents less, per dollar paid to a typical White worker. For Black workers, that gap has more than doubled since 1979, and for Hispanic/Latinx workers the gap has not narrowed substantially since the late 1980s.

Tableau

Washington State

In Washington, the gap in average monthly wages between White workers and workers who are people of color grew dramatically, even during economic expansions. From 1991 through 2018, the gap in average monthly wages between White workers and workers who are people of color grew between 20% and 87% (save for workers of Asian descent, a subset of whom are employed in very high-wage information, technology and professional sectors). As of March 2018, the racial gap costs workers of color an average $14,288 to $24,200/year.[14]

Gap in Average Monthly Wages versus White Workers, All Industries, Washington State

Avg. monthly wage (2018 dollars)

Gap in avg. monthly wage compared to White workers

Equivalent yearly
wage gap

Increase in
wage gap

Race/Ethnicity

1991 Q1

2018 Q1

1991 Q1

2018 Q1

1991 Q1

2018 Q1

n/a

Amer. Indian/ Alaska Native

$3,040

$4,241

$1,201

$1,772

$14,410

$21,258

48%

Asian

$3,440

$7,513

$800

($1,501)

$9,604

n/a

n/a

Black or African American

$3,338

$4,320

$903

$1,692

$10,832

$20,303

87%

Hisp./Latinx

$2,713

$3,996

$1,527

$2,017

$18,328

$24,200

32%

Native Hawaiian or Pacific Islander

$3,005

$4,186

$1,236

$1,827

$14,832

$21,922

48%

Two or More Race Groups

$3,249

$4,822

$991

$1,191

$11,895

$14,288

20%

White (not Hisp./Latinx)

$4,241

$6,012

n/a

n/a

n/a

n/a

n/a

Source: U.S. Census Quarterly Workforce Indicators, Full Quarter Employment (Stable). Inflation adjusted to 2018 dollars using CPI-U-RS. Monthly wage calculated as 4-quarter average ending with quarter specified.

As with the gender pay gap, workers of color cannot educate themselves out of pay disparities. Nationally, as of January 2017, average hourly wages for White college graduates are far higher ($31.83) than for Black college graduates ($25.77) – and the national unemployment rate for Black college graduates was 4.0 percent, compared to 2.6 percent for White college graduates.[15],[16]

Footnotes

[8] Economic Policy Institute, “Union decline and rising inequality in two charts”, https://www.epi.org/blog/union-decline-rising-inequality-charts/.

[9] Economic Policy Institute, “How today’s unions help working people”, https://www.epi.org/publication/how-todays-unions-help-working-people-giving-workers-the-power-to-improve-their-jobs-and-unrig-the-economy/.

[10] American Community Survey 2017 1-Year Estimates, Sex by Industry and Median Earnings in the Past 12 Months for the Full-Time, Year-Round Civilian Employed Population 16 Years and Over, Washington State.

[11] Based on EOI analysis of U.S. Census Quarterly Workforce Indicators, Full Quarter Employment (Stable) wages and employment. Monthly wage calculated as 4-quarter average for 2017 Q2 to 2018 Q1.

[12] Based on Economic Policy Institute analysis of unpublished Total Economy Productivity data from Bureau of Labor Statistics Labor Productivity and Costs program, and Current Population Survey Outgoing Rotation Group microdata.

[13] Based on Economic Policy Institute analysis of Current Population Survey data.

[14] Based on EOI analysis of U.S. Census Quarterly Workforce Indicators, Full Quarter Employment (Stable). Monthly wage calculated as 4-quarter average. Inflation adjusted to 2018 dollars using CPI-U-RS.

[15] Economic Policy Institute, “Racial gaps in wages, wealth and more: a quick recap”, https://www.epi.org/blog/racial-gaps-in-wages-wealth-and-more-a-quick-recap/.

[16] For a deeper review and analysis of the racial pay gap, see “Black-white wage gaps expand with rising wage inequality”, Economic Policy Institute, https://www.epi.org/publication/black-white-wage-gaps-expand-with-rising-wage-inequality/.

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