Black workers earn a median hourly wage around $3 lower than white workers, who earn $22 an hour. Hispanic workers earn $5 less than white workers.
That’s according to data from the Kentucky Center for Economic Policy, a progressive think tank.
The data also showed the average unemployment rate for Black residents is almost four times that of white residents – more than 11% compared to more than 3%.
Jason Bailey, the center’s executive director, said racial pay gaps have far-reaching consequences for marginalized communities. They can make it harder to pay off medical and loan debt, save for retirement, start a business or buy a home, which is a major wealth-building avenue.
“It perpetuates inequality and actually causes it to grow, whereas those who make higher wages are able to accumulate wealth, accumulate assets and have much more stability that you need to ultimately prosper,” he said.
For 15 years, Kentucky’s minimum wage has been $7.25. Increasing that is much needed, Bailey said. In 2023, 19% of Kentucky workers were paid less than $15 an hour, according to the think tank’s report.
Since the 1990s, the median wage for Kentuckians with a bachelor’s degree or higher has remained stagnant at $30 an hour, adjusted for inflation. But higher education levels don’t improve the number of quality jobs available, Bailey said. Low job quality paired with stagnant wages and few workplace protections makes it hard for families to make ends meet.
“Certainly, education is a great thing, but I think there's been a myth perpetuated that it's the answer to everything,” he said.
Bailey said unionizing and automatic expungement of criminal records are other efforts that could help bridge the wage gap, especially for marginalized communities. Right now in Kentucky, the service sector has the most open jobs of any industry, but wages are low, he said.
“There's nothing in there about them that requires them to be low-wage, but they're non union, and with a minimum wage as low as it is, it's created a situation where the job quality is so low,” Bailey said, adding that there is a “real need” for unions.
Michael Gritton is the executive director of Kentuckiana Works, a government-funded workforce development board. He said employment gaps stem from racist policies like redlining. He said the effects didn’t end when that kind of housing discrimination was outlawed.
“It still left African Americans living in neighborhoods where jobs were moving away, making transportation a bigger issue, making the social networks that you have to try to get to those jobs really important,” he said.
Gritton said he doesn’t come across many jobs where employers are looking for people to work for minimum wage. Most entry level jobs seem to be paying $12 to $16 an hour, he said.
“And the more they pay $12 instead of $16, the more we all know they're going to struggle to find people, because the effective minimum wage sort of moved very close to that $15 an hour level over the last two or three years,” he said.
Gritton said it’s also important to tackle the lack of adequate transportation to job centers, a big barrier to marginalized communities trying to get well paying jobs.
