The African American Labor Force Shows Remarkable Resilience

Today’s jobs report brings some positive news to balance the disappointing first quarter estimates of GDP growth (a meager 0.1 percent) announced earlier this week; there were 288,000 jobs added in April. At the same time, the unemployment rate fell to 6.3 percent, but this decline was entirely the result of people leaving the labor force, not people finding work. While all major race and ethnic groups experienced a similar pattern of declining unemployment rates and labor force participation rates in April, there are some interesting insights into the upward trend in the black-white unemployment rate gap to be gained from today’s numbers.

As unemployment rates have gradually declined over the last four years, the black-white unemployment rate ratio has been increasing and is currently higher than it was before the recession, meaning that there’s been less improvement in the black unemployment rate than the white rate. Indeed, the African American unemployment rate remains 3.3 percentage points higher than the 2007 average while the white unemployment rate is just 1.2 percentage points higher than in 2007.

Further, when we look at the difference between the current and 2007 employment-population ratios, we find that the decline in the share of employed working age adults in the population was greater for African Americans (down 4.6 percentage points) than for whites (down 3.9 percentage points).

Yet, despite worse employment prospects, African Americans have experienced less reduction in their labor force participation rate than whites, contributing to less change in unemployment rates as unemployed workers continue to search for work. The African American labor force participation rate is just 2.8 percentage points lower than in 2007, compared to 3.3 percentage points lower for whites.

This point is also supported by the fact that long-term unemployment remains higher for African Americans than whites, reflecting the fact that unemployed African Americans face greater challenges in securing new employment, but also the fact that, by and large, African American job seekers continue to hold on to hopes of finding a job despite this difficulty. In short, the black-white unemployment rate ratio has grown partly because African American workers have remained relatively more attached to the labor force than their white counterparts over the course of the recession and recovery.

  • mostberg

    Good to see African-Americans making progress. More of them should be looking for entry into the blue collar trades such as plumbers and electricians. From my perspective we have a surplus of white collar workers, except in all of the medical fields and anything related to caring for the growing elderly population. Those are a couple of areas to train for jobs and look for jobs. I would also suggest more bang for the buck at 2 year community college where they train for real jobs – not art history majors and the like.

    • Tony Suggs

      I actually agree with you that more African American should have degrees as plumbers and electricians, etc. But the big issue is that we are consumers that spent with folks that don’t hire in correlation to what we spend. Too few businesses owned by African Americans compared to Mexicans or Asians that come from other counties. If you had a group of churches contribute to start businesses in their communities instead of masses buildings, fancy homes and cars owned by their pastors it would be a start of securing funding. Can’t blame everyone for all the problems some we create all by ourselves.

      • mostberg

        Tony, the Small Business Administration is out there to help with business loans for anyone coming up with a workable business model. Also, if this is an interest of yours, check out SCORE – the Senior Corp of Retired Executives – who do volunteer advice to a small start ups. But I have to tell you that the best source of funding is collaboration with loyal and reliable friends and relatives. When Indians, Koreans, Chinese, Pakistans, Jews, etc start a business sometimes they save costs by living on the business site and the whole family running the business and making side money as well. Most do not come with much money – just total committment and not an 8 hour day, but 16 hour days and 7 days per week. My family always had small businesses: tavern, filling station, small beat up truck company. All at different times There were times we could have made a lot more in a regular job and much easier. But for those who have the risk tolerance and willingness to work very, very hard, a small business makes you fiercely proud and independent – but seldom rich. But rich is possible if you grow your business.