Two years into the COVID-19 pandemic, the labor market is approaching its 2020 pre-pandemic level of tightness. However, the return to normalcy has proceeded at different paces for different groups, and disparities remain.

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2022 Q1 & 2021 Q4 • Updated May 2022

A strengthening labor market brings improvements for all groups, though disparities remain

By Kyle K. Moore

EPI analyzes state unemployment rates by race and ethnicity, and racial/ethnic unemployment rate gaps, on a quarterly basis to generate a sample size large enough to create reliable estimates of unemployment rates by race and ethnicity at the state level.

We report estimates only for states for which the sample size of these subgroups is large enough to create an accurate estimate. For this reason, the number of states included in our maps and data tables varies based on the analysis performed. The following analysis contains data on the first quarter of 2022 and the fourth quarter of 2021.

First-quarter 2022 state unemployment rates, trends, and ratios

Two years into the COVID-19 pandemic, with over 80 million reported cases and nearly 1 million deaths in the United States, the labor market is approaching its 2020 pre-pandemic level of tightness. As the Omicron variant of COVID-19 subsided, many state economies continued their return to more normal economic activity. Unions worked to solidify the gains in worker power afforded to them by the conditions of the pandemic and the “Great Reshuffling,” with high-profile grassroots wins secured by Amazon and Starbucks workers.

The national unemployment rate in 2022Q1 was 3.8%, matching its rate in 2020Q1 and continuing an overall labor market tightening that brought with it some measure of increased worker bargaining power. A majority of states had unemployment rates less than or within 1 percentage point of their pre-pandemic (2020Q1) unemployment rate (Table 1).

The lowest unemployment rates were found in Nebraska (2.1%) and Utah (2.1%), while the highest rates were in D.C. (6.1%) and New Mexico (5.6%). Twelve states had unemployment rates under 3% at the beginning of the year, underlining the overall tightness seen in the recovery since the pandemic that began two years prior. Even so, the return to normalcy proceeded at different paces across different groups.

First-quarter 2022 trends among white workers

The white unemployment rate nationwide dropped to 3.0% in 2022Q1, matching its 2020Q1 level. A majority of states had white unemployment rates less than or within 1 percentage point of their pre-pandemic (2020Q1) white unemployment rate (Table 1).

White unemployment rates fell as low as 1.7% in D.C. and Nebraska, even lower than their 2020Q1 rates (2.0% and 2.7%, respectively). Nearly half the states (24 plus D.C.) had white unemployment rates at or below 3%. The highest unemployment rates for white workers were found in California (4.5%) and Maryland (4.4%)—higher than their 2020Q1 rates (3.5% and 2.9%, respectively), but low by most standards of labor market tightness.

First-quarter 2022 trends among Black workers

At the national level, Black workers saw an unemployment rate of 6.5%, still slightly higher than their 2020Q1 rate of 6.2%. Georgia (5.0%) and Florida (5.3%) saw the lowest rates among those states with large enough samples to analyze. No state saw a Black unemployment rate below 5%. The Black unemployment rate remained above 10% in D.C. and Illinois, at 12.5% and 12.2%, respectively.

Less than half of states for which data are available had Black unemployment rates less than or within 1 percentage point of their pre-pandemic rate (Table 1).

The national Black–white unemployment ratio remained unchanged at 2.2-to-1, reconfirming one of the most persistent trends in this area of research (Table 2). This ratio remains highest in D.C., where it rose sharply over the previous quarter: A 31% decline in white unemployment combined with persistent high Black unemployment to bump the ratio to 7.2-to-1. In contrast, the Black–white unemployment ratio in the neighboring state of Maryland was the lowest in the country, at 1.3-to-1. This again points to the unique nature of the D.C. labor market and its emphasis on white-collar federal employment.

First-quarter 2022 trends among Hispanic workers

Hispanic workers had an unemployment rate of 4.6% at the national level in 2022Q1, slightly below their 2020Q1 pre-pandemic rate of 4.8%. Hispanic state-level unemployment was lowest in Georgia (2.0%) and North Carolina (2.5%), and highest in Massachusetts (7.5%) and New York (6.3%).

In eight states (among the 13 states with sufficient sample size for analysis), the Hispanic unemployment rate was at or below 5% in 2022Q1. In all but one of the 13 states analyzed, the Hispanic unemployment rate was less than or within 1 percentage point of the pre-pandemic rate.

Nationwide, Hispanic workers were 55% more likely than white workers to be unemployed in 2022Q1 (a Hispanic–white unemployment ratio of 1.55-to-1, rounded to 1.6-to-1 in Table 2).

Massachusetts had the highest Hispanic–white unemployment ratio at 1.9-to-1. North Carolina and Georgia both had unemployment ratios of 0.8-to-1, meaning that in those states Hispanic workers were less likely to be unemployed than white workers were.

First-quarter 2022 trends among Asian American and Pacific Islander (AAPI) workers

AAPI workers saw a national unemployment rate of 3.4% in 2022Q1, slightly above the rate for white workers yet below the rates for Black and Hispanic workers. The AAPI unemployment rate for 2022Q1 remains slightly above its 2020Q1 pre-pandemic rate of 3.1%.

Among the five states with sufficient sample size for analysis, AAPI state unemployment rates were lowest in Texas, New York, and Hawaii (all tied at 3.8%), and highest in New Jersey (5.0%) and California (4.7%). Of these five states, only New Jersey and Texas had AAPI unemployment rates less than or within 1 percentage point of their pre-pandemic rate.

Fourth-quarter 2021 state unemployment rates, trends, and ratios

The fourth quarter of 2021 saw steady improvement in the labor market, even as the Omicron variant of COVID-19 continued to spread across the country. Though the incidence of cases was relatively high throughout the Omicron outbreak, the widespread availability of vaccines and boosters limited the severity of those cases. As workers moved back into the labor market, the economy continued to grow, though at a slower pace than in previous quarters of the recovery from 2020’s recession.

Inflation remained a presence throughout the economy, leading Fed Chair Powell to announce an increase in the pace of the Fed’s tapering policy (slowing down their economy-stimulating strategy of purchasing bonds).

The national unemployment rate in 2021Q4 fell to 4.2%, consistent with what many economists refer to as a “tight” labor market. Unemployment rates fell to as low as 2.3% and 2.4% in Utah and Nebraska, respectively. No states had overall unemployment rates higher than 10%; the highest unemployment rates were found in D.C. (6.2%), New Mexico (6.0%), and California (5.9%). A majority of states had unemployment rates less than or within 1 percentage point of their pre-pandemic (2020Q1) unemployment rate (Table 3). These trends of course mask disparities across groups.

Fourth-quarter 2021 trends among white workers

At the national level, white workers had an unemployment rate of just 3.3% in 2021Q4, nearly as tight as the labor market for white workers prior to the pandemic (3.0% in 2020Q1).  A majority of states had white unemployment rates less than or within 1 percentage point of their pre-pandemic (2020Q1) white unemployment rate (Table 3).

White workers saw the highest unemployment rates in Hawaii (5.5%), Maryland (5.2%), and Connecticut (5.0%). That said, even these highest rates are relatively low in the context of other groups and previous periods. White unemployment rates fell to 2.0% or lower in Nebraska (1.9%), Utah (2.0%), and South Dakota (2.0%). Low rates were not experienced across all groups, however, as seen in the following sections.

Fourth-quarter 2021 trends among Black workers

Black workers saw a national unemployment rate of 7.2% in 2021Q4, higher than the highest state unemployment rate for white workers. It is also higher than the pre-pandemic (2020Q1) rate by 1 percentage point. Less than half of states for which data are available had Black unemployment rates less than or within 1 percentage point of their pre-pandemic rate (Table 3).

There were still states in which the Black unemployment rate exceeded 10.0% this late into the recovery: Illinois (13.1%), D.C. (11.4%), California (11.1%), and Michigan (10.7%). Among the states with population sizes large enough for analysis, the lowest Black unemployment rates were found in Florida (4.7%) and Georgia (4.9%). These were the only states in which the unemployment rate for Black workers fell below 5.0%.

Nationwide, Black workers were more than twice as likely as white workers to be unemployed in 2021Q4, with the Black–white unemployment ratio at 2.2-to-1 (Table 4). Black–white state unemployment ratios were highest in D.C. (4.5-to-1) and Illinois (3.4-to-1), and lowest in Maryland (1.1-to-1). The sharp discrepancy between D.C.’s high ratio and Maryland’s low ratio reflects the specific makeup of the D.C. labor market, skewed as it is toward white-collar federal employment.

Fourth-quarter 2021 trends among Hispanic workers

Hispanic workers nationwide saw an unemployment rate of 5.2% in 2021Q4, in between the rates for Black and white workers, and slightly higher than their 2020Q1 rate (by 0.4 percentage points).

Of those states where population sizes met the threshold for analysis, the highest Hispanic state unemployment rates were found in Massachusetts (7.9%) and New York (7.1%), while the lowest rates were found in Georgia (1.7%) and Utah (2.9%). A majority of the analyzed states had Hispanic unemployment rates less than or within 1 percentage point of their pre-pandemic (2020Q1) Hispanic unemployment rate (Table 3).

Hispanic workers were 60% more likely to be unemployed than white workers when considering the entire country (a Hispanic-white unemployment ratio of 1.6-to-1; see Table 4). Hispanic workers were twice as likely as white workers to be unemployed in Massachusetts, the state with the highest Hispanic–white unemployment ratio in 2021Q4 (2.1-to 1). In some states, Hispanic workers were significantly less likely to be unemployed than white workers; in Georgia and Washington state, the Hispanic–white unemployment ratios were 0.6-to-1 and 0.9-to-1, respectively.

Fourth-quarter 2021 trends among Asian American and Pacific Islander (AAPI) workers

AAPI workers saw a national unemployment rate of 4.1% in 2021Q4, above the rate for white workers but still below the rates for Black and Hispanic workers. The 2021Q4 AAPI rate was about 1 percentage point higher than the pre-pandemic (2020Q1) AAPI rate.

The highest unemployment rates for AAPI workers among those with a large enough population size for analysis were New Jersey (6.8%) and California (5.6%), while the lowest rates were found in Texas (2.8%) and Hawaii (4.0%). Only one of the five states for which data are available had AAPI unemployment rates less than or within 1 percentage point of their pre-pandemic rate.

Methodology

The unemployment rate estimates in this report are based on the Local Area Unemployment Statistics (LAUS) and the Current Population Survey (CPS) from the Bureau of Labor Statistics (BLS). The overall state unemployment rate is taken directly from the LAUS. CPS six-month ratios are applied to LAUS data to calculate the rates by race and ethnicity. For each state subgroup, we calculate the unemployment rate using the past six months of CPS data. We then find the ratio of this subgroup rate to the state unemployment rate using the same period of CPS data. This gives us an estimate of how the subgroup compares with the state overall.

While this methodology allows us to calculate unemployment-rate estimates at the state level by race and ethnicity by quarter, it is less precise at the national level than simply using the CPS. Thus, the national-level estimates may differ from direct CPS estimates.

In many states, the sample sizes of particular subgroups are not large enough to create accurate estimates of their unemployment rates. We report data only for groups that had, on average, a sample size of at least 700 in the labor force for each six-month period. Data collection for the BLS surveys used to produce this report was affected by the pandemic, in some cases limiting sample sizes such that some states that usually meet sample size thresholds no longer did so.1

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Notes

1. See Bureau of Labor Statistics, “Effects of COVID-19 Pandemic on the Employment Situation News Release and Data” (web page), for more details on how the pandemic has impacted data collection.