Thursday, November 21, 2019

[NJFAC] About Unemployment and African Americans

Happy Thanksgiving for Black Americans? Unemployment Rates Are Low, So Give Thanks for That. But Make Sure the Dinner Guests Know the Whole Story      Frank Stricker
            You need some numbers. Maybe pick a few that stand out and slip them into the conversation between the appetizers and the main meal. Before people get a little bleary from too much food and drink.
Official Rates Deconstructed
1. In October of 2019, the share of African Americans who were unemployed was 5.4%. We don't know if that was the lowest level ever because we don't have numbers for the period before 1972. But 5.4% is the lowest rate in a long time and that's a real plus.
2. Now the negatives. The first is that black rates are still higher than white rates (and a little higher than Hispanic rates). Normally, the black-to-white ratio is about 2. In October white unemployment was 3.2%. Twice that number is 6.4%, so the black unemployment rate of 5.4% was less than twice the white rate. But just since May. And for how much longer?*
3. Also, there must be more hidden unemployment among blacks than whites. In most social groups there are always people who are not employed, want a job, but are not actively searching and aren't counted as unemployed. This group must be relatively larger for African-Americans for several reasons: the disproportionately high number of black people in prison, the high number of black people with prison records, and, lastly, because job opportunities in many locales are not good for African Americans, more of them stop looking for work and drop out of the unemployment count.
            A writer for Quartz online, Dan Kopf, reported on a striking thought-experiment that illustrates one of these points: if incarcerated males had been included in the unemployment totals for prime-age (25-54) males in 2014, those unemployment rates would have increased from 5% to 6.4% for whites, but from 11.4% to 18.6% for African Americans.
Should We Be Talking about "Full Employment" When Even Official Unemployment Rates Are Sky High in Some Cities and Rural Areas?
            A 2017 federal survey found that in many cities, unemployment rates were extremely high for black people. In 20 of 28 black-majority cities, black unemployment was at least 7 points higher than white unemployment. In Atlanta white unemployment was 2.5%, black unemployment 11.5%. In New Orleans, white unemployment was 2.3%, black unemployment 11.3%.
Does Work Pay Enough?
            Has lower unemployment and more work made the average minority household economically comfortable? In 2018 real median household incomes of $51,450 (Hispanic) and $41,361(African American ) were up since the Great Recession, but they were still far below comfort levels for most families and far below the average for whites ($70,642). Remember, too, that by definition, half the households of any population are below the median. Last year half of all black households lived on less than $41,361. Things can't be much different this year, so a lot of people, including a disproportionate number of African-Americans, won't have a happy Thanksgiving or a very merry Christmas this year.
            A related fact: minority poverty rates are high. The white rate fell from 13% in 2012 to 10% in 2018, the Hispanic rate from 26% to 18%, and the black rate from 27% to 21%. Fewer people in poverty is good and that's why we like economic growth. It trims the poverty population. But a lot of minority households are still poor and many are poorer than these numbers indicate. You may be tired of being reminded by this author that federal poverty lines are absurdly low, but here's a striking example: if you, your partner, and your two children had more than $25,465 in total income in 2018, you had too much income to be included in the poverty population. Pass the yams, please, and no, I am not making this stuff up.**
            More bad news. The wealth gap, which is already large, may be growing. Wealth includes savings, investments, real estate and other assets that people own. If wealth holdings are substantial enough, they bolster people's feelings of economic security. More wealth makes it easier for people to get through hard times and provides resources that parents mobilize--sometimes in criminal ways--to improve opportunities for their children. Higher unemployment means less income and makes it difficult to amass wealth. So does low pay. The Great Recession eroded the assets of many families. In the recovery period, the rich recovered speedily, but many Americans did not. This was especially damaging for minorities whose wealth holdings were often already tiny to nonexistent. People's savings and other assets took a permanent hit from the Great Recession and the inequitable economic recovery. An ACLU study concluded that by 2031 black families will have 40% less wealth than they would have had without the Great Recession and whites 31% less.
Why Do Black Americans Have More Unemployment and Less Income?
            That and the politics of reform are large questions for another time. But one explanation is clear: racist attitudes and policies that are supported and allowed by many white people, quite a few politicians and judges, some economists, too many police officers, and many employers. On hiring practices, for example, researchers have shown that quite a few employers discriminate. Experiments using fictitious responses to real want ads show that white-sounding names receive many more callbacks for interviews than black-sounding names. In really tight labor markets, there is less of this kind of racism as employers get desperate for workers, but very low unemployment, while vital, is not enough to erase discrimination. And low unemployment doesn't last forever. More substantial affirmative actions are indispensable if economic inequalities between whites and blacks are to be eliminated.
*Rates of participation in the labor force (at work or looking for work) and unemployment vary by age, race and gender. In October of 2019, 83.6% of prime-age (25-54 years old) black males and 78.8% of prime-age black females participated. The black male unemployment rate was 4.7%; the female rate 4.5%. For prime-age whites the participation rates were 90.2% and 77.3% and the unemployment rates were 2.4% for men and 2.7% for women. For this age group, black male unemployment was, in fact, twice the white rate.
** Also, average pay for African Americans has fallen farther behind white pay in the twenty-first century (2000-2017). The median wage gap between whites and blacks went from 21% to 27%.
Frank Stricker is emeritus professor of history and interdisciplinary studies at California State University, Dominguez Hills. He is on the board of the National Jobs for All Network. His views here are his own. His book, American Unemployment: Past, Present, and Future, contains a new history of the subject and sharp analyses of key concepts and solutions. It will be published in June 2020.

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