Byrne: Let’s talk a little bit about some of the landmark discoveries you made as a scholar, as they relate to income inequality.
Charles: The discovery that whites outearn or have higher levels of wealth is not mine alone. There’s a generation of scholars of all races who’ve documented that fact very carefully. And so I’m building upon their ideas, their work, and extending it in ways that fit my style, my technical capacities and my particular interests. Having said that, I am interested in earnings differences. And in that project with my friend, Pat Bayer of Duke, I’m interested in two things. One is the observation that black-white experience, the differences, the contrast, the gaps, is improperly captured by the mean. It turns out that the overwhelming majority, the 90 odd percent of racial comparisons about earnings differences had focused just on the mean difference. My friend, Pat Bayer and I said, “Look, we should look at other points in a distribution.”
Because to the extent, the black experience is more and more heterogeneous over time, it would be useful to think about the distribution. That’s number one. The second point is that the overwhelming majority of literature documenting earnings differences, which I usually admire and respect. But over time, as the incidence of non-work for both races becomes an evermore important phenomenon, examining contrasts among workers becomes less and less reflective of what is true in the population.
A third point, is that contrasts that are made by race tend again in the 90 odd percent, they focus on differences in what Pat and I call differences in the levels. So give me the average white guy’s income minus the average Black guy. And that is the Black-white gap. That’s a perfectly legitimate gap. It measures something but there’s a different kind of gap that Pat and I explore and document since 1940. Imagine that a black man at a certain percentile point in the earnings distribution were put into the white distribution. So conceptually, give me the median black man, and take his income and put it into the white distribution in that year. How far below the median would he be? Notice I’m not even imagining he’d be above the median. So that second thing has received stunningly little attention. And our contribution in the paper is to document what is called or what we define as the positional gap. Our observation is that both the level and the positional gap reveal fascinating things about the evolution of earnings differences in the U.S. that are masked by the historical focus on the mean differences among workers. In terms of position, the median black man ranks as far below the white median today as his father or his grandfather. There has been virtually no advance, no advance over the last 75 years. Indeed, if one then asks about the level gap, which I’ve already described at the median, there too one sees things that are disturbing. The level gap at the median closed between 1940 and 1980 or so. And contrary to what the bulk of existing previous literature said, that it’s plateaued and remained, we show that since 1980, it has consistently eroded. So today it is as large as it was in 1953. Yet, blacks at the top-end of the earnings distribution, 90th percentile or so, have made tremendous positional advances. And so we had for 30, 40 years, blacks at the top-end of the black earning distribution ranking consistently below their white counterparts. There was a tremendous convergence in their position relative to whites. And if you restrict attention to the college educated, the gap is now historically unprecedented smaller. So among black college graduates at the 90th percentile, they are about five percentile points or so below their white counterparts college educated at the 90th percentile. Meaning, if they were white, there’d be 85th percentile. There’s several things that emerged from that. One is the, when one talks about the black experience, one must be careful. One must be careful to speak with subtlety and breath. So as to capture the fact that whereas all blacks rank relative to their white counterparts below in level and position, the lower down the distribution one goes is more and more dire. But the experience between the median and the 90th is hugely different. And that must be captured and reflected in our conversation about efforts to remediate.
Byrne: Should I conclude from that observation that higher education is a leveler of some sort.
Charles: It is. The opening up of American higher education to blacks in levels and rates theretofore unprecedented opened up tremendous gains at the 80th percentile and above. There were also lots of educational-related changes, but these changes were not at college or grad school. The country had for more than a century, I believe, very deliberately underspent on black education. Because of federal policy, those changes were reversed. It turns out that there were tremendous educational gains for African Americans, tremendous. In 1950, the median African American man had a seventh grade education. Today, the median is 12th grade. That’s a tremendous improvement indeed. In the absence of those educational investments, the flatness in position would have been an erosion in position. And the erosion in the level would have been even larger. However measured, education is a tremendous leveler, I am convinced.
Education has another function. Universities serve an aggregator-interaction function. The student at the university is brought into meaningful close engagement with our colleague across the aisle. They’re taking the same chem class or the same art history class. They dorm together and party. These are not small things. These are profoundly important things because they affect the view that both students might’ve had about the groups from which the other person comes, and I believe affect those views positively. And so this aggregator function is another very important thing in my view.
Byrne: How frustrating is it to face the limits of scholarship? And when I say the limits of scholarship, you’re doing this study and others, and you’re seeing this great gap, and the gap is in fact almost disguised by the mean, but all you can do is point it out. You have no power to change it.
Charles: I think this is true for all scholars in the social sciences field. One writes a paper about bail or eviction or about school buses or whatever, one devotes years to this enterprise, one’s collecting data and sitting in one’s basement at 2:00 in the morning and giving talks and people are ripping the paper apart. And once we run the regressions and it’s published, it’s read by ten people, including one’s mom and one’s aunt. And that’s it, that’s it. The ability to shorten the distance between scholarly output and policy and other impact or the inability to do that, I think gnaws at every scholar. And I think it, especially gnaws at scholars of color working on questions of the sort we have described. I will frankly tell you that a desire to shorten that distance in some way before my career draws to a close, is one reason that deaning at a school like the School of Management appealed to me. But I love writing papers, I absolutely love it. In fact, I love writing papers and teaching school more than anything. But fine. There is that frustration. And as Dean, I have the ability, I hope, to in various ways, shorten the distance. Not necessarily for my own work, maybe for other people’s work, so that’s a big allure.
Byrne: Do you, because of your background, because of your research, experience the news of George Floyd’s death differently than others? When you heard about the death of George Floyd, what was your immediate reaction?
Charles: Rage. I heard about it from a close friend, who said, “Have you seen this?” I hadn’t seen it. He described it. I didn’t look at it. I couldn’t look at it for awhile. I was very angry and upset. I just left Chicago where a couple of years ago there was a police shooting that garnered much attention. My brother, my best friend, lived many years in Saint Louis. My sister-in-law and her family are from St. Louis. There was a few years ago a shooting in Ferguson, Missouri, which is not far from where she’s from.
And I can go on with example after example. And so there was a feeling of rage, an immediate overpowering rage. And in some ways that feeling was, I’m certain, no different from the feelings of other Black men and Black people. There is a feeling of a kind of solidarity, understanding, profound compassion and empathy. There’s that. And then there’s a feeling of vulnerability. Look, I am a social scientist, and I am aware of small numbers. How many shootings are there? But what is it that makes something like this event so salient for me? The black people who are professors at Yale, or who work for the New Yorker Magazine or work in law firms have the same lived experience as the black people at the median and below in the cities where they live. Anxiety about the police sometimes is a leveler. There are times when I have had interactions with the police, that you, John, have never had. I’m very sure.