Incarceration and Invisible Inequality

Standard measures of economic disadvantage among young men became increasingly optimistic through the 1980s and 1990s due to the increase in the U.S. incarceration rate. I quantify the concealed inequality due to incarceration by (1) constructing employment to population ratios that include prison and jail inmates among those out of work, and (2) calculating black-white wage ratios that adjust for attrition from the labor market due to joblessness and incarceration. By 2000, among non-college black men, aged 22 to 30, the jobless rate (one minus the employment ratio) based on the Current Population Survey stood at 29.9 percent, in comparion to the adjusted rate of 42.1 percent that includes the prison and jail population. If we account for the large numbers of low-education men without work or incarcerated, racial inequality in hourly wages in 1999 would have been about twice as high as its observed level. Adjusting for racial disparities in joblessness and incarceration suggests that young black men have experienced virtually no real economic gains on young whites in the 15 years from 1999.