the black and white labor gap in america

8/6/2019 The Black and White Labor Gap in America

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1 Center or American Progress |The Black and White Labor Gap in America

The Black and White Labor Gap in America

Why African Americans Struggle to Find Jobs and RemainEmployed Compared to Whites

Christian E. Weller and Jaryn Fields July 2011

Introduction

Our naions economy is now wo years ino a shaky recovery ollowing he Grea

Recession o 20072009, ye or he millions o Americans sill ou o work, herecovery is largely meaningless. All Americans saw signican job losses during he

Grea Recession and comparaively high unemploymen raes persis or all populaion

groupsnone more so han Arican Americans.

Te unemploymen raes or Arican Americans by gender, educaion, and age are much

higher oday han hose o whies, and hese unemploymen raes or Arican Americans

rose much aser han hose or comparable groups o whies during and aer he Grea

Recession. Te unemploymen raes or many black groups in ac coninued o rise dur-

ing he economic recovery while hey sared o drop or whies. Te rs ew monhs

o 2011 saw subsanial employmen gains or Arican Americans bu job growh salledye again in he pas ew monhs.

I is now painully clear ha Arican Americans are sill acing depression-like unemploy-

men levels. Policymakers should obviously address he overarching problem o unem-

ploymen in whaever plan comes ogeher o raise he ederal deb limi by Augus 2, bu

here are unique srucural obsacles ha preven Arican Americans rom ully bene-

ing rom economic and labor marke growhobsacles ha deserve paricular atenion

when unemploymen raes or Arican Americans sand a he highes levels since 1984.

Tis issue brie deails hese high unemploymen raes and explores he reasons or

hem, including paricular weaknesses in secors ha oer disproporionae employ-

men opporuniies or Arican Americans, long unemploymen spells, and he recur-

ring rs red, las hired phenomenon among Arican Americans ha plagues our

naions workorce pracices. We sugges a ew needed shor-erm remedies. Mos

immediaely, we sugges an overhaul o he unemploymen insurance sysem o address

his problem alongside more job creaion and job raining programs aimed a dieren

groups o Arican Americans.


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The situation today

Te unemploymen rae is a criical way o gauge he saus o various groups in he

labor marke. Te unemploymen rae measures he share o available job seekers who

are unable o nd a job ou o he enire labor orce. Te black unemploymen rae ends

o be abou double ha o whies, regardless o he economic climae. (see able 1)

Mos recenly, he black unemploymen rae averaged 16.1 percen in April, May, and

June 2011, compared o an average o 7.9 percen or whies in he same period.1 Ta

is, he Arican American unemploymen rae wo years ino he recovery was more

han wice as high as he whie unemploymen rae. Tis was also rue a he sar o he

Grea Recession in he ourh quarer o 2007, when he black unemploymen rae aver-

aged 8.4 percen bu he whie unemploymen rae sood a only 4 percen.

Table 1

The black and white gap

Diferences in unemployment rates or Arican Americans, broken down by subgroups, since start o Great Recession

Unemployment

rate for.

Fourth

quarter

2007

Second

quarter

2009

Second

quarter

2011

Difference between

African Americans

and whites for

respective groups in

second quarter 2011

(in percentage points)

Change since

start of Great

Recession

(fourth quarter

2007 to second

quarter 2011)

Difference in change

since start of Great

Recession between

African Americans

and whites for

respective groups

Arican American 8.4 14.8 16.1 8.2 7.7 3.8

White 4.0 8.3 7.9 3.9

Arican American men 9.2 18.0 18.3 10.0 9.1 4.9

White men 4.1 9.2 8.3 4.2

Arican American women 7.6 12.1 14.1 6.7 6.5 3.0

White women 3.9 7.2 7.4 3.5

Arican American,

no high school13.6 20.7 26.0 14.0 12.4 7.2

White, no high school 6.8 13.6 12.0 5.2

Arican American, high school 7.3 13.9 15.9 7.5 8.6 4.1

White, high school 3.9 8.5 8.4 4.5

Arican American, college 3.0 7.6 6.9 3.0 3.9 1.8

White, college 1.8 4.1 3.9 2.1

Arican American, 35 to 44 6.4 12.2 12.6 6.1 6.2 2.8

White, 35 to 44 3.1 6.9 6.5 3.4

Arican American, 65+ 4.4 6.9 9.4 3.5 5.0 2.3

White, 65+ 3.2 6.2 5.9 2.7

Note: All unemployment rates are in percent. All changes and diferences are in percentage points.

Source: Authors calculations based on Bureau o Labor Statistics, Current Population Survey (Department o Labor, 2011).


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Te gap beween black and whie unemploymen raes also widened during he Grea

Recession and he ensuing weak labor marke recovery. Te unemploymen rae or

Arican Americans rose by 7.7 percenage poins rom he ourh quarer o 2007 o

he second quarer o 2011, compared o an increase o only 3.9 percenage poins or

whies during he same period.

Breakdown by gender, education, and age shows consistent unemployment gap

Te gap in unemploymen raes beween Arican Americans and whies persiss across

a wide range o populaion groups. We observe sark dierences in he labor marke

experiences o Arican Americans and whies even i we accoun or gender, educaion,

and age. Te unemploymen rae among black women, or insance, was 14.1 percen

in he second quarer o 2011 compared o 7.4 percen among whie women. Similarly,

he unemploymen rae among black men was a saggering 18.3 percen over ha same

period while he unemploymen rae among whie men was 8.3 percen.

Te dierences in he oal unemploymen raes beween Arican Americans and

whies can also no be atribued o dierences in educaional atainmen. Black unem-

ploymen is signicanly higher han ha o whies a all levels o educaional atain-

men. Te unemploymen rae o Arican Americans wihou a high school diploma

was 26 percen in he second quarer o 2011, compared o 12 percen or whies wih-

ou a high school diploma. Te unemploymen rae among Arican Americans wih

high school diplomas and no possecondary educaion was 15.9 percen, while ha o

similarly siuaed whies was 8.4 percen. Finally, he unemploymen rae o Arican

American college graduaes was 6.9 percen, while he unemploymen rae among

whie college graduaes was a mere 3.9 percen.

Te dierences in unemploymen raes beween Arican Americans and whies also

hold across age groups. When employmen prospecs dry up, i becomes increas-

ingly dicul or young people in paricular o nd employmen, wih many pushed

ou o he labor orce. And once again, he unemploymen rae o black youh was an

asronomical 41.3 percen in he second quarer o 2011 compared o a sill very high

22.3 percen or whie youh.

Similarly, he unemploymen rae or Arican Americans in he prime working ages o

35 o 44 sood a 12.6 percen in he second quarer o 2011, compared o only 6.5 per-

cen or whies in his age group. And he unemploymen rae among Arican Americans

aged 65 and older was 9.4 percen, while he unemploymen rae o whies in his age

group was only 5.9 percen.


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Te upsho: Tere are srucural barriers o employmen in he labor marke aec-

ing Arican Americans aloneobsacles ha impede he advancemen o Arican

Americans. So les urn o he evidence poining o wha hose barriers migh be.

African American unemployment rates rise faster than whites

Te exisence o hese barriers is eviden in he changes in unemploymen raes across

all subgroups o Americans. able 1 shows ha he unemploymen rae o Arican

Americans increased subsanially aser han ha o whies, regardless o breakdowns

by gender, educaion, and age, since he sar o he Grea Recession. Indeed, he

relaionship beween unemploymen levels among Arican Americans and whies oen

held seady over his periodo he exen ha he unemploymen raes or Arican

Americans remained a wice he level o he whie unemploymen rae even as he

whie unemploymen rae sharply increased. Why would his happen?

First fired, last hired

Te unemploymen daa over he pas hree recessions il lusrae wo elling rends.2 Firs,

he unemploymen rae among Arican Americans rises aser han ha o whies during

a recession. Second, he unemploymen raes or Arican Americans end o sar o r ise

earlier han hose o whiesand hose raes end o say higher or longer han hose

o whies. Tis phenomenon can be described as rs red, las hired and is one o he

key srucural obsacles acing Arican Americans in he labor marke.

We look rs a daa rom he Grea Recession and is aermah o illusrae his poin.Te recession began in December 2007 and ended in June 2009. Over ha period he

unemploymen rae or Arican Americans increased by 6.4 percenage poins while

he unemploymen rae among whies only increased by 4.3 percenage poins. Once

he economic recovery was underway, beginning in he hird quarer o 2009, he whie

employmen rae began alling in March 2010 while he black unemploymen rae has

no ye begun o decline.3

Te same holds rue in he previous recession, which began in he rs quarer o 2001

and ended in he hird quarer o 2001. Te unemploymen rae o Arican Americans

sayed elevaed or a longer period o ime, increasing a ull percenage poin, compared

o hal a percenage poin increase in he unemploymen rae o whies. And aer he

recession ended, black unemploymen began o all in he hird quarer o 2003 while

he unemploymen rae o whies began o decline in he rs quarer o 2003.4


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We observe a similar dierence in he recession o he early 1990s. Tis recession sared

in he hird quarer o 1990 and ended in he rs quarer o 1991. Te whie unemploy-

men rae peaked a 7.2 percen in he rs quarer o 1992, one year aer he recession

ocially ended, which makes his recovery he rs jobless recovery. Te black unem-

ploymen rae peaked a 14.7 percen in he second quarer o 1992.5

So how will he curren economic recovery play ou or Arican Americans seekingemploymen? Te daa in able 1 urher underscore his phenomenon o labor marke

pain lingering longer or Arican Americans. Te unemploymen rae was lower or

only one Arican American grouphose wih a college degreein he second quarer

o 2011 han a he sar o he recovery in he second quarer o 2009. Bu he whie

unemploymen rae had dropped or six ou o seven subgroupswhie women being

he excepionduring ha same period. Te unemploymen rae among whies is sill

unaccepably high wo years ino he recovery bu a leas is saring o move in he

righ direcion, which is more han we can say or Arican Americans.

Policymakers need o learn rom his elling evidence ha black labor marke prospecsare hi much harder by recessions and ha i akes longer or Arican Americans o

recover rom an economic downurn. Te evidence is clear and so, oo, are he obsacles.

Structural obstacles to full labor market gains for African Americans

One srucural obsacle is he resul o he indusries and secors in which Arican

Americans ypically nd employmen. Te manuacuring secor, which employs a large

number o Arican American men, experienced seady job losses hroughou he Grea

Recessioneven hough jobs are reurning o his secor in he wake o he recovery.Manuacuring added 164,000 jobs beween November 2010 and April 2011 bu grew

by only 6,000 jobs in June aer shedding 2,000 jobs in May. And he workweek in

manuacuring ell by 0.3 hours in June 2011, which suggess ha employers can sill

ramp up producion by increasing hours again and no hiring more people. Tis is no

good news or Arican Americans given he rs red, las hired phenomenon hey ace

in he workplace.

Furhermore, as sae and local governmens coninue o cu spending, Arican

Americans are disproporionaelyaeced by he losses in hose areas. Sae and local

governmens los a oal o 25,000 jobs in June 2011 alone, and since he recovery began

in July 2009, sae and local governmens have shed more han 500,000 jobs.6 Te ac

ha he job losses in saes and local governmens coninued while privae-secor hiring

sared up again in par explains he dierence in unemploymen rends beween whies

and Arican Americans. Job losses coninued in a secor ha ypically oers dispropor-

ionae opporuniies or Arican Americans.
http://www.americanprogress.org/issues/2009/04/pdf/black_men_recession.pdfhttp://www.americanprogress.org/issues/2009/04/pdf/black_men_recession.pdfhttp://www.marketwatch.com/story/economy-moving-in-the-wrong-direction-2011-07-08http://www.marketwatch.com/story/economy-moving-in-the-wrong-direction-2011-07-08http://www.huffingtonpost.com/2011/04/27/black-unemployment-remain_n_853571.html?page=4http://www.huffingtonpost.com/2011/04/27/black-unemployment-remain_n_853571.html?page=4http://www.marketwatch.com/story/economy-moving-in-the-wrong-direction-2011-07-08http://www.marketwatch.com/story/economy-moving-in-the-wrong-direction-2011-07-08http://www.americanprogress.org/issues/2009/04/pdf/black_men_recession.pdfhttp://www.americanprogress.org/issues/2009/04/pdf/black_men_recession.pdf


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Anoher srucural obsacle: More people lose jobs and possibly say ou o a job longer

in groups wih higher unemploymen raes,7 hus suering rom a longer loss o job-

relevan skills and hence creaing a vicious cycle o high unemploymen.

Discriminaion may pose anoher srucural obsacle. A2011 Economic Policy Insiue

sudyconcludes ha labor marke discriminaion is a he roo o black male under-

employmen. Te sudy analyzes employmen daa and deermines ha occupaionalpreerences and a dearh o so skills are no he causes o employmen dispariies

beween blacks and whies. By sysemaically excluding hose oher causes, EPI con-

cludes ha discriminaion mus exis in odays job marke. Tis is a common approach

among economiss o deermine i discriminaion exiss: Eliminae all oher possible

causes and any remaining dierences in employmen beween Arican Americans and

whies are he resul o discriminaion.8

We use a similar ye much less sophisicaed approach in our analysis presened in able

1. We conrol or possible acors ha could explain unemploymen dierences, such as

educaional atainmen, gender, and age. Arican Americans sill see higher unemploy-men raes and sharper increases in unemploymen raes aer we conrol or hese ac-

ors, indicaing ha discriminaion could be par o he explanaion in addiion o oher

srucural obsacles already discussed.

Oher srucural obsacles may include he lack o relevan social neworks or Arican

Americans compared o whies, lack o public ransi opions o ge o a job, and lack o

savings o enable moving somewhere else o look or or ake a new job. Tis is by no

means an exhausive lis o he poenial obsacles o ull labor marke paricipaion or

Arican Americans bu he daa show ha Arican Americans need immediae atenion

o heir employmen sruggles as persisenly high unemploymen raes ake a oll onemployees and heir amilies.

Policy options

A good place o sar may be o consider adjusing he unemploymen insurance sysem

o make i more inclusive o Arican Americans. Par o he purpose o he unemploy-

men insurance sysem is o replace some o he wages los by hose who are involun-

arily employed, unneling money ino he economy and susaining economic demand.

Ta demand is wha uels hiring.

Unorunaely, Arican Americans are more likely o hold low-wage jobs or engage in

seasonal employmen and are hus less likely o be eligible or unemploymen insurance.

In 2009 Arican Americans were underrepresened among unemploymen insurance

recipiens in almos hal o he saes wih available daa.9 One o he ways o adjus he

unemploymen insurance sysem o make i more comprehensive is o exend he num-
http://www.epi.org/page/-/BriefingPaper288.pdf?nocdn=1http://www.epi.org/page/-/BriefingPaper288.pdf?nocdn=1http://www.americanprogress.org/issues/2011/02/strong_ui_system.htmlhttp://www.americanprogress.org/issues/2011/02/strong_ui_system.htmlhttp://www.epi.org/page/-/BriefingPaper288.pdf?nocdn=1http://www.epi.org/page/-/BriefingPaper288.pdf?nocdn=1http://www.epi.org/page/-/BriefingPaper288.pdf?nocdn=1


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ber o weeks ha unemployed workers can claim benes during ough economic imes.

Tis doesn address he issue o unemploymen insurance ineligibiliy bu by exending

coverage or hose eligible, he resul is more money fowing ino he economy, enabling

unemployed Arican Americans and ohers o acively seek employmen, hereby culi-

vaing an amosphere ha spurs job creaion.

Anoher response o he persisenly high unemploymen rae among all groups, buespecially among Arican Americans, should be a coninued emphasis on job raining

and job creaion programs. One such program, AmeriCorps, can creae 57,000 jobs in

scal year 2012 or young people. Wih almos 50 percen o black youh currenly ou

o work, invesing in AmeriCorps and oher naional service programs would undoub-

edly have a posiive eec.

In addiion, advancing a green jobs agenda can creae accessible and high-qualiy jobs in

he consrucion secor, where Arican Americans are ypically underrepresened. Te

Deparmen o Labor suppors programs ha help ex-oenders ransiion back ino

sociey and nd seady employmen. Such programs helped more han 10,000 AricanAmericans in 2009. Coninuing o suppor hose programs can lower he Arican

American unemploymen rae.

Finally, he Deparmen o Jusice, Oce o Federal Conrac Compliance Programs, and

he Equal Employmen Opporuniy Commission all should vigorously enorce policies

ha preven labor marke discriminaion. Labor marke discriminaion has become less

prevalen over ime bu remains a persisen problem, especially along racial lines.10

Tese are merely small seps o help address massive long-erm srucural obsacles o

he ull paricipaion o Arican Americans in our naions labor orce. Policymakers needo underake larger seps o address he persisen gap in he labor marke experience o

Arican Americans and whies, among hem more educaional opporuniies and closing

he wide racial wealh gap. Arican American workers and heir amilies can ill aord he

economic and human pain ha high and long spells o unemploymen bring wih hem.

Chrisian E. Weller is a Senior Fellow a Cener or American Progress and an Associae

Proessor, Deparmen o Public Policy and Public Afairs, a he Universiy o Massachusets

Boson and Jaryn Fields is a Special Assisan a he Cener or American Progress .
http://www.americanprogress.org/issues/2011/02/strong_ui_system.htmlhttp://www.americanprogress.org/issues/2011/07/sagawa_youth.htmlhttp://www.americanprogress.org/issues/2010/06/jones_small_people.htmlhttp://applications/AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/Content.Outlook/Library/Caches/TemporaryItems/Users/jfields/AppData/Local/Temp/Total%20Video%20Converter.lnkhttp://applications/AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/Content.Outlook/Library/Caches/TemporaryItems/Users/jfields/AppData/Local/Temp/Total%20Video%20Converter.lnkhttp://applications/AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/Content.Outlook/Library/Caches/TemporaryItems/Users/jfields/AppData/Local/Temp/Total%20Video%20Converter.lnkhttp://applications/AppData/Local/Microsoft/Windows/Temporary%20Internet%20Files/Content.Outlook/Library/Caches/TemporaryItems/Users/jfields/AppData/Local/Temp/Total%20Video%20Converter.lnkhttp://www.americanprogress.org/issues/2010/06/jones_small_people.htmlhttp://www.americanprogress.org/issues/2011/07/sagawa_youth.htmlhttp://www.americanprogress.org/issues/2011/02/strong_ui_system.html


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Endnotes

1 All data are quarterly, nonseasonally adjusted. Unemployment data are taken rom the Bureau o Labor Statistics, CurrentPopulation Survey(Department o Labor, 2011).

2 These trends also exist or earlier recessions but we ocus only on the last two to keep the discussion manageable.

3 Data are taken rom: Bureau o Labor Statistics, Current Population Survey.

4 Authors calculations based on: Bureau o Labor Statistics, Current Population Survey.

5 The black unemployment rate actually never declined to the peak o the white unemployment rate, staying above 7.2 percentthroughout the 1990s. The unemployment rate or both whites and Arican Americans declined in ts and spurts ater the joblessrecovery ended in the early 1990s but the white unemployment rate always dropped beore the Arican American unemploymentrate. Discussion is based on nonseasonally adjusted quarterly averages rom: Bureau o Labor Statistics, Current Population Survey.

6 Authors calculations based on: Bureau o Labor Statistics, Current Employment Statistics (Department o Labor, 2011).

7 Long-term unemployment rates are not broken down by race in public use data rom the Bureau o Labor Statistics but thelong-term unemployment data that are available suggest that long-term unemployment soared to record highs in June 2011with an average length o unemployment o 39.9 weeks. For details, see: Bureau o Labor Statistics, Current Population Survey. It islikely that the length o unemployment is correlated with the unemployment rate or diverse population groups, par ticularly asstructural obstacles to job reentry persist, so that Arican Americans sufer rom longer spells o unemployment than whites. Formore inormation, see: Sylvia Allegretto and Andrew Stettner, The Rising Stakes o Job Loss: Stubborn Long-term Joblessnessamid Falling Unemployment Rates (Washington: Economic Policy Institute, 2005).

8 For an example o credit market discrimination, see: Christian Weller, Credit Access, the Costs o Credit and Credit MarketDiscrimination,Review of Black Political Economy36 (1) (2009): 728.

9 Andrew Grant-Thomas, (Why) Are Arican Americans and Latinos Underrepresented Among UI Beneciaries?, available at http://4909e99d35cada63e7757471b7243be73e53e14.gripelements.com/presentations/2011_01_27_grant-thomas_nasi.pd.

10 See, or instance: Joseph Altonji and Rebecca Blank, Race and Gender in the Labor Market. In Orley Ashenelter and Andrew Card,eds., Handbook of Labor Economics, Vol. 3 (Amsterdam: Elsevier Science B.V., 1999); Susan Williams McElroy and William Darit y,

Labor Market Discrimination. Working Paper 5 (Carnegie Mellon Heinz Research, 1999), available at http://heinz.cmu.edu/research/71ull.pd; Lesley Williams Reid and Beth A. Rubin, Integrating Economic Dualism and Labor Market Segmentation: TheEfects o Race, Gender, and Structural Location on Earnings,The Sociological Quarterly44 (3) (2003): 405432.
http://4909e99d35cada63e7f757471b7243be73e53e14.gripelements.com/presentations/2011_01_27_grant-thomas_nasi.pdfhttp://4909e99d35cada63e7f757471b7243be73e53e14.gripelements.com/presentations/2011_01_27_grant-thomas_nasi.pdfhttp://heinz.cmu.edu/research/71full.pdfhttp://heinz.cmu.edu/research/71full.pdfhttp://heinz.cmu.edu/research/71full.pdfhttp://heinz.cmu.edu/research/71full.pdfhttp://4909e99d35cada63e7f757471b7243be73e53e14.gripelements.com/presentations/2011_01_27_grant-thomas_nasi.pdfhttp://4909e99d35cada63e7f757471b7243be73e53e14.gripelements.com/presentations/2011_01_27_grant-thomas_nasi.pdf

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