A closer look at Asian-American income

Originally posted on the Economic Policy Institute

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In her blog post on the earnings differences among interracial couples, the New York Times‘ Catherine Rampell concludes:  “So basically, what these numbers are reflecting is that Asians earn more money, period, which is generally true across the population of Asian-Americans and has been the case for a while.” This is true when looking at household and family income, but there is a different and more complicated story underneath these numbers.

It is important to recognize that many more Asian Americans have college degrees than whites. This 2010 EPI report found that nearly 60 percent of Asian American workers have a bachelor’s or higher degree compared to about 40 percent of white workers. College-educated workers tend to earn more than less-educated workers and this pulls up the median Asian American earnings.

When one compares the annual personal income of Asian Americans and whites of the same gender and educational level, Asian Americans do not always come out on top. The figure below shows these comparisons for workers with a high school diploma and with a bachelor’s degree. In 2010, among workers with a high school diploma, white men earned about $11,000 more than white women and Asian American men and women.

Among workers with a bachelor’s degree, white men remain the highest earners, but their earnings advantage over Asian American men is only about $5,000. In this comparison, Asian American and white women earn significantly less than Asian American men. Asian American women earn about $11,000 less than Asian American men, and white women earn about $13,000 less than Asian American men. This puts Asian American and white women at about $16,000 and $18,000 behind white men, respectively.

Another issue to consider is that Asian Americans are more concentrated than whites in high-cost-of-living areas. Asian Americans are overrepresented in expensive metropolitan areas like Los Angeles, New York, San Francisco, and Honolulu. Given this fact, controlling for educational attainment, Asian Americans should earn more than whites, but as the figure illustrates, they often don’t.