Saturday, May 13, 2023

On the Workers’ Compensation Quid Pro Quo and the Racial Wage Gap

Some obvious things take their time to hit me in just the right way that I take notice. I spend a lot of time thinking and writing about what I perceive as the inherent unfairness for all workers embedded in the workers’ compensation quid pro quo – the historical trade of tort remedies for workers’ compensation benefits. But lately I have also been thinking about whether statutory wage-based benefits necessarily carry within them racial injustice. To put it as simply as I can, if wages are inherently racially biased, any wage-based benefit (including workers’ compensation) must also be biased.

A “racial pay gap” is not as widely known or discussed as the gender pay gap, despite its being both larger and more resistant to improvement over time. Using the metric of comparing only workers who worked full-time, year-round, in 2019, the average Black worker earned 73.5 cents and the average Latinx worker earned 74.6 cents on the dollar to the average White worker. While there was some improvement prior to 2000, these racial pay gaps are now larger than they were four decades ago. Now, you can have your own views about why these gaps exist. If you hum to yourself the tune, “That’s Just the Way it Is,” what I say next will not make much sense to you. But suppose you see things somewhat differently. I’m reading Professor Stephanie Bornstein’s lucid and eye-opening forthcoming Vanderbilt Law Review article, “Confronting the Racial Pay Gap,” and find myself agreeing with the data and arguments underlying her assertion: “In the 1980s, as unemployment rose and unionization rates fell, the Black-White wage gap increased.” Bornstein goes on to summarize economist Elise Gould’s work:

In the 1990s, with an increase in the minimum wage and strengthening labor markets generally, the gap declined for a period of time, stall[ed] . . .  in the early 2000s . . . In the two decades since, the Black-White wage gap has increased in all wage quartiles for workers of all education levels. . . The average overall Black-White pay gap increased from 21.8% in 2000 to 26.5% in 2019, with marked increases at every level of education: from 15.3% to 18.3% for high school, 17.2% to 22.5% for college, and 12.5% to 17.6% for advanced degree holders. That means that, in 2019, Black advanced degree holders earned on average 82.4 cents to the dollar of White advanced degree holders. Even a multiple regression analysis that controlled for not only education level but also age, sex, and geographic region of workers revealed a significant, and worsening, gap from 10.2% in 2000 to 14.9% in 2019.

There are similar such gaps between Hispanic and White men; and the even more dramatic gaps involving women of color are doubly impacted by gender and race. Additionally, “[w]hen compared to the earnings of White women . . . the racial pay gap for Black and Latinx women has also increased. Black women went from earning 92.1% of what White women earned in 1979 to 80.1% in 2019 and Latinx women from 82.5% to 70.4%.”

I don’t care to discuss the existence of such gaps. I would refer the reader to Professor Bornstein’s fine article and ask you to assume that I consider their existence irrefutable—though the cause of the gaps is, as I have already suggested, open to debate. A critical sentence in Bornstein’s article is that “scholars have documented that ‘observable’ or ‘explained’ factors like education, work experience, and geography fail to account for between one-third and two-thirds of racial pay gaps.” Furthermore, “. . . the vast racial pay gap does not account for the additional economic inequality wrought by excess unemployment and mass incarceration of Black and Latinx Americans.” If anything, the racial wage gap overstates the economic “progress” of, in particular, Black men.

Back to workers’ compensation. On the one hand, the system is neutral: however wages became what they are, workers’ compensation tries to repair (badly in my view) destruction of that earning capacity. But there is a very serious discussion of the demographic concentration of workers of color in low paid and more dangerous occupations that needs to be undertaken. I link you here to the Center for American Progress’s article, “Occupational Segregation in America.”

If I play around in the “tool” accompanying the article, I find that the top ten occupations for black men (in terms of frequency or prevalence) are: barbers; industrial truck and tractor operators; refuse and recyclable material collectors; security guards and gambling surveillance officers; bus drivers; baggage porters; dishwashers; cleaners of vehicles and equipment taxi drivers; and laborers.  

For black women, the top ten occupations are: home health aides; nursing assistants; personal care aides; food servers; postal service mail sorters; maids and housekeeping cleaners; “other” health care support workers; licensed practical and vocational nurses; postal service clerks; and laundry and dry cleaning workers.

I hypothesize that a much higher injury rate than average exists among workers of color who frequent these occupational categories. And if, as the Center for American Progress argues, “Race-based occupational segregation has its roots in slavery,” inadequate work injury remedies become harder to characterize as a mere “accident” of history. A person of color is more likely to have been channeled into injury prone occupations and then compensated for injury based on a wage scale that is itself rife with racially disparate elements. This is not, by any means, my final word on the workers’ compensation connection to such issues. But for now it seems enough to say that the idea that workers’ compensation is somehow immune from this type of analysis is not persuasive.

Michael C. Duff

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