The coronavirus recession continues to severely impact Black and Latinx workers, who are disproportionally suffering, compared to other workers in the United States. Understanding the causes of these disparate impacts is critical to designing policies that leverage political will to reduce longstanding systemic racism.

One dominant false narrative that continues to dominate policy discussions is the so-called skills gap—a largely unfounded explanation for the present wage divide in the U.S. economy that poses a serious risk to the efficacy of relief and stimulus policy proposals. This false narrative is based on the correlation between technological advancement, the skill levels of workers needed to translate those advancements into increased productivity, and rising income inequality.

To be sure, at one time, the skills gap was a “stylized fact,” economic parlance for a generally accepted explanation of a larger part of specific wage trends. From 1980 to 2000, there was an economywide correlation between schooling and wages, which upheld the “skill-biased technical change” theory and informed policy priorities for the labor market. But this empirical relationship broke down between 2000 and 2017. Yet the skills gap narrative still undergirds policy proposals, placing the onus on workers for stagnating wages despite evidence on the relationship between declining worker power and income inequality.

In particular, promoting the skills gap in policy encourages Black and Latinx people to use their own minimal resources to invest in education and workforce development, disproportionately taking on debt to do so, without any guarantee that it will translate into higher wages and better job quality. These policies do not account for the historical wealth disparities fostered by systemic racism that crushed the ability of Black and Latinx families to build their own wealth over generations.

Despite this glaring wealth handicap, educational attainment increased across all racial and ethnic groups over the past 20 years. Yet the wage divide between Black and White workers worsened over the same time period. Indeed, the racial wage gap is greater at higher levels of education. At the same time, Black college graduates owe more student debt at graduation, and these differences in debt grow over the following years.

Read the full article about racial wage divides by Kate Bahn and Kathryn Zickuhr at Equitable Growth.