Policy is an extremely important tool to address racial discrimination, both through racially targeted and race neutral efforts. Enforcement of anti-discrimination laws during the 1960s played a critical role in reducing, but not eliminating, racial discrimination in employment and pay. Even today, racial discrimination is difficult to prove because workers have much less information available to them than do employers.
Consistently strong enforcement of these laws requires an ongoing national commitment that includes greater transparency in the ways that hiring, pay, and promotion decisions are made and ensuring that workers have effective and efficient tools to pursue any violation of their rights. A recent proposal by the Equal Employment Opportunity Commission and the Department of Labor to annually collect summary pay data by gender, race, and ethnicity from businesses with 100 or more employees is an important step in the right direction.
In terms of race neutral policies, the tight labor markets of the late 1990s helped to narrow pay disparities as employers were forced to compete for a shrinking pool of available workers by offering higher wages. These tighter labor markets also made it easier for workers who felt they were being underpaid to pursue or bargain for higher pay.
Policies aimed at achieving full employment, including monetary policy decisions that prioritize low rates of unemployment, are essential. Efforts by the Fed Up campaign have been effective in pressing the Fed to acknowledge the fact that communities of color are experiencing a slower rate of recovery than indicated by national unemployment and job growth numbers. In the absence of any risks of high inflation, near term increases in the interest rate unnecessarily dampen any hopes for a full economic recovery or much needed wage growth.