On Asian-American earnings

In a previous post I showed that generalizations about Asian-American incomes often are misleading, as some groups have above-average incomes and some have below-average incomes (also, divorce rates) and that inequality within Asian-American groups was large as well. In this post I briefly expand that to show breakdowns in individual earnings by gender and national-origin group.

The point is basically the same: This category is usually not useful for economic statistics, and should usually be dropped for data on specific groups when possible.

Today’s news

What’s new is a Pew report by Eileen Patten showing trends in race and gender wage gaps. The report isn’t focused on Asian-American earnings, but they stand out in their charts. This led Charles Murray, who is fixated on what he believes is the genetic origin of Asian cognitive superiority, to tweet sarcastically, “Oppose Asian male privilege!” Here is one of Pew’s charts:

The figure, using the Current Population Survey (CPS), shows Asian men earning about 14.5% more per hour than White men, and Asian women earning 11% more than White women. This is not wrong, exactly, but it’s not good information either, as I’ll argue below.

First a note on data

The CPS data is better for some labor force questions (including wages) than the American Community Survey, which is much larger. However, it’s too small a sample to get into detail on Asian subgroups (notice the Pew report doesn’t mention American Indians, an even smaller group). To do that I will need to activate the ACS, which is better for race/ethnic detail.

As a reminder, this is the “race” question on the 2014 American Community Survey, which I use for this post:

There is no “Asian” or “Pacific Islander” box to check. So what do you do if you are thinking, “I’m Asian, what do I check?” The question is premised on that assumption that is not what you’re thinking. Instead, you choose from a list of national origins, which the Census Bureau then combines to make “Asian” (the first 7 boxes) and “Pacific Islander” (the last 3) categories. And you can check as many as you like, which is good because there’s a lot of intermarriage among Asians, and between Asians and other groups (mostly Whites). This is a lot like the Hispanic origin question, which also lists national origins — except that question is prefaced by the unifying phrase, “Is Person 1 of Hispanic, Latino, or Spanish origin?” before listing the options, each beginning with “Yes”, as in “Yes, Cuban.”

Although changes have not been announced, it is likely that future questions will combine the race and Hispanic-origin questions, and also preface the Asian categories with the umbrella term. This may mark the progress of getting Asian immigrants to internalize the American racial classification system, so that descendants from groups that in some cases have centuries-old cultural differentiation start to identify and label themselves as from the same racial group (who would have put Pakistanis and Japanese in the same “race” group 100 years ago?). It’s hard to make this progress, naturally, when so many people from these groups are immigrants — in my sample below, for example, 75% of the full-time, year-round workers are foreign-born.

Earnings

The problem with the earnings chart Pew posted, and which Charles Murray loved, is that it lumps all the different Asian-origin groups together. That is not crazy but it’s not really good. Of course every group has diversity within it, so any category masks differences, but in my opinion this Asian grouping is worse in that regard than most. If someone argued that all these groups see themselves as united under a common identity that would push me in the direction of dropping this complaint. In any event, the diversity is interesting even if you don’t object to the Pew/Census grouping.

Here are two breakouts. The first is immigration. As I noted, 75% of the full-time, year-round workers (excluding self-employed people, like Pew does) with an Asian/Pacific Islander (Asian for short) racial identification are foreign born. That ranges from less than 4% for Hawaiians, to around 20% for the White+Asian multiple-race people, to more than 90% for Asian Indian men. It turns out that the wage advantage is mostly concentrated among these immigrants. Here is a replication of the Pew chart using the ACS data (a little different because I had to use FTFY workers), using the same colors. On the left is their chart, on the right is the same data limited to US-born workers.

Among the US-born workers the Asian male advantage is reduced from 14.5% to 4.2% (the women’s advantage is not much changed; as in Pew’s chart, Hispanics are a mutually exclusive category.) There are some very high-earning Asian immigrants, especially Indians. Here are the breakdowns, by gender, comparing each of the larger Asian-American groups to Whites:

Seven groups of men and nine groups of women have hourly earnings higher than Whites’, while nine groups of men and seven groups have women have lower earnings. In fact, among Laotians, Hawaiians, and Hmong, even the men earn less than White women. (Note, in my old post, I showed that Asian household incomes are not as high as they look when they are compared instead with those of their local peers, because they are concentrated in expensive metropolitan markets.)

Sometimes when I have a situation like this I just drop the relatively small, complex group, which leads some people to accuse me of trying to skew results. (For example, I might show a chart that has Blacks in the worst position, even though American Indians have it even worse.)

But generalization has consequences, so we should use it judiciously. In most cases “Asian” doesn’t work well. It may make more sense to group people by regions, such as East-, South-, and Southeast Asia, and/or according to immigrant status.