Racism is costly.
In fact, racial prejudice is a key reason for the wage gap between Black and White workers, according to a new study in the Journal of Political Economy.
Over a lifetime, the researchers concluded, racial prejudice accounts for a quarter of that gap, costing a Black worker up to $115,000.
Kerwin Kofi Charles, from the Harris School of Public Policy Studies at the University of Chicago, and Jonathan Guryan, from Chicago's Booth School of Business, found that educational inequality, differences in workers' skill levels and other forms of discrimination likely account for the rest of the gap. The study’s authors monitored a series of surveys conducted by the National
Opinion Research Center at the University of Chicago. In the surveys, White people were asked their views on issues such as interracial marriage, Whites-only private clubs, neighborhood segregation and whether or not they would vote for a Black president, e! Science News reports. What they found was a significant link between wage gaps and bias.
"Though prejudice explains only a minority—albeit a significant one—of the Black-White wage gap, the costs borne by Blacks ... are large," the researchers found. "Consider an 18-year-old Black male choosing between two states… . Our estimates imply that if he lives in Florida rather than Massachusetts. … the net present value of his [lifetime] earnings will be about $34,000 smaller. If he lives in Mississippi rather than Wisconsin … his discounted earnings are about $115,000 smaller."