Black workers, hammered by pandemic, now being left behind in recovery

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Black Americans, who were among the hardest hit by coronavirus layoffs, are now recovering at the slowest rate, a one-two punch that threatens to worsen the United States’ already stark wealth and income disparities long after the pandemic recedes.

While Hispanic workers initially saw the sharpest uptick in unemployment when business shutdowns began last spring, Black people have seen a slower return to work even as the economy is poised for a robust rebound, government data and economic analyses show. When the overall unemployment rate ticked down in February, Black workers were the only group that saw a rise in joblessness, a 0.7 percentage point increase.

The share of Black Americans holding jobs also dropped over the month while it continued to move up for all other races and ethnicities. Over the past year, white, Asian and Hispanic Americans have regained roughly two-thirds of their initial job losses in terms of what share of their population is working, a key measure of labor and unemployment known as the “employment-population ratio." Black workers have only recovered slightly more than half.

The data has fueled fears that the nascent recovery will not be evenly shared, a dynamic that would exacerbate income and wealth inequality while prolonging the return to full employment. The trend is reminiscent of the Great Recession, when Black workers saw a worse downturn and slower rate of return to normal. And this time, it has caught the attention of top policymakers across the Biden administration and in Congress.

“We’re trying to make sure that it is not like so many other recoveries,” said House Majority Whip Jim Clyburn (D-S.C.), the most senior Black lawmaker in Congress and chair of the Select Subcommittee on the Coronavirus Crisis. “Slow for everybody, and a snail’s pace for Black and brown communities.”

The headwinds that Black workers face are plenty, some unique to the coronavirus recession but others the result of structural inequities that have long contributed to high rates of unemployment — typically double that of white workers even in strong economies.

For one, many of the industries in which Black workers are heavily represented are not recovering as quickly as others as the economy reopens — or are even continuing to backslide. State and local governments have long been a major employer for African Americans. But while the labor market broadly improved last month, state and local governments shed another 83,000 jobs and remain down 1.4 million workers from a year ago.

“Those sectors in which the rebound is really not happening, or not happening in impactful ways, are really almost the same industries in which African Americans are overrepresented,” said Michelle Holder, a labor economist at John Jay College of Criminal Justice in New York. She cited transportation, a major employer for Black men, and health services, where Black women are heavily represented, as two other industries that have taken longer to come back, keeping the unemployment rate high.

The devastation of the child care sector amid the shutdowns has also heavily affected Black and Hispanic women, who are more likely to work at child care centers and to depend on them in order to be able to take jobs elsewhere.

And while employment in high-wage sectors has almost completely recovered, low-wage industries remain down 28 percent from a year ago, according to Harvard’s Opportunity Insights tracker — a disparity that disproportionately affects workers of color.

Structural inequities in the U.S. labor market that have affected Black and Hispanic workers’ ability to advance out of low-paying jobs, as well as discrimination in hiring practices, are also likely having an effect, some economists say.

When unemployment spiked in April, the gap between Black and white rates of joblessness narrowed significantly, indicating the losses were spread across the board. But it has steadily grown since then as white workers have returned to work faster — which William Spriggs, chief economist at the AFL-CIO, said he took as “proof” of the effect of discriminatory hiring practices.

Spriggs also said that for much of the past year, unemployment has been higher for all Black workers, including those with college degrees, than for those of all races with less than a high school education.

“This is not a matter of skills,” Spriggs said. “It’s a matter of the way discrimination takes place within the recovery.”

One way to address the slower recovery among workers of color is to ensure that federal support remains in place as long as Black and Hispanic unemployment remains elevated, advocates say, rather than cut it off once the levels return closer to normal. And given that these workers typically remain out of work the longest, President Joe Biden will need a prolonged economic recovery to ensure the labor market gets tight enough to pull them back in from the sidelines.

Clyburn’s focus is two-fold: tracking the Covid relief money as it goes out to ensure that it’s being spent equitably, and pushing the Biden administration to invest heavily in a second stimulus package focused on infrastructure, which would spark job creation across the country.

Clyburn said he has spoken about the need to address the uneven recovery with both Biden and Susan Rice, the president’s top domestic policy adviser, adding that Biden has made clear “he plans to do the right thing.”

There are signs the administration is focused on the disparities. The White House Council of Economic Advisers highlighted adjusted unemployment rates, which include those who have given up the search for work, broken down by race and gender after the latest jobs data was released for February. The report showed that the Black unemployment rate stood at nearly 15 percent — affecting nearly 1 in 6 workers — compared to an overall rate of 9.5 percent. The adjusted Hispanic unemployment rate is 12.4 percent.

At the Labor Department, chief economist Janelle Jones penned a blog post last month stressing the disproportionate economic impact of the pandemic on Black Americans, particularly women.

And Federal Reserve Chair Jerome Powell says he is tracking the Black and Hispanic unemployment rates, among other statistics, because elevated joblessness there signals weakness in the broader labor market.

“This particular downturn, of course, was just a direct hit on a part of the economy that employs many minorities and lower paid workers… and it’s the slowest part of the economy to recover,” Powell said at a March 17 press conference. “We’d like to see those people continue to get support as the broader economy recovers, as it’s very much doing now.”

The longer the rate of recovery for Black workers continues to lag, the more likely it is to have a lasting impact. Workers who fall into long-term unemployment — defined as being out of a job for six months or more — take longer to return to work and are more likely to drop out of the labor market entirely.

Black workers are also far less likely to have had savings to lean on to weather an extended period of joblessness — the net worth of an average Black family is about one-tenth that of a white family — and therefore more vulnerable to falling into debt or losing their homes. And another prolonged economic recovery for Black Americans could worsen the already dramatic racial wealth gap, particularly as it drags on both personal savings and future earnings.

The key to addressing the inequities lies in promoting a strong economic recovery for everyone, while recognizing that some communities and workers will take longer to return to normal and require more help than others, economists say.

“People love the quote [from] John F. Kennedy, ‘A rising tide lifts all boats.’ It lifts all the boats that got solid bottoms,” Clyburn said. “If the bottoms got holes in them or if the boats have deteriorated, a rising tide ain’t gonna lift them.”

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