The March jobs report released Friday beat expectations, adding 196,000 jobs and keeping the unemployment rate at 3.8%, near a 49-year low. And while this report posted strong numbers, the tightening labor market hasn’t reduced disparities in unemployment rates among the different ethnicities.
According to data analyzed by the Economic Policy Institute (EPI), black unemployment levels are twice as high as white unemployment rates, not just at the national level, but also in 14 states and the District of Columbia. That’s out of 21 states (and Washington D.C.) for which data was available. Thought the disparity is startling given the gains minorities have made in the current labor market, it isn’t new.
“I find that to be consistent with the data that we have observed and known about for decades,” said Valerie Wilson, EPI’s Director of the Program on Race, Ethnicity, and the Economy. She authored the report on the recent unemployment rates.
“I would be shocked to find a state where the black unemployment rate is equal to or lower than white workers,” she continued. “The lowest ratio was 1.6 — which is essentially double.”
And while this disparity isn’t new, African-Americans are the only ethnic group suffering from such a wide gap with their white peers.
“The 2-to-1 ratio is unique to African-Americans,” Wilson said.
Other ethnic groups, Wilson points out, have managed to have unemployment rates lower than that of their white peers. In Oklahoma for example, the unemployment rate for Hispanics is 2.4%. It’s 2.6% for whites.
Typically, tight labor markets increases employment levels for minorities and women. As the pool of qualified candidates shrinks, employers turn to candidates they might have otherwise overlooked.
Addressing the gap
But as unemployment levels have fallen, the ratios haven’t. In June, the employment rate for black workers fell below 6%, the lowest figure ever recorded since the Bureau of Labor Statistics started tracking the figures by race. President Trump has repeatedly touted the falling black unemployment rate as a win for his economic policies. At the time when the black unemployment rate hit record lows, his son Donald Trump Jr. tweeted: “Black unemployment under 6% for the first time in history! Democrats, tell me again why anyone should vote for you and your economic policies ever again?”
But Wilson says those figures, while accurate, aren’t a reflection of the president’s policies, but rather are the product of an economy that has been going strong.
“Unless the Trump administration had done something drastic, the unemployment rate is going to continue to fall,” she said. “He can’t take credit for coming in when the black unemployment rate had been improving for 6, 7, years. That’s a continuing pattern.”
She adds that the bigger challenge is addressing the unemployment rate disparity — something she notes, has not been a priority for Trump’s administration.
Currently, the black unemployment rate sits at 6.7%, while the white unemployment rate is 3.4%.
But achieving employment parity will require changes in both the private and public sectors. She argues that employers and Congress and individual states need to prioritize addressing the gap. “Rigorous enforcement” of anti-discrimination laws could keep workplaces diversified, while the government should enact policies to improve employment opportunities for communities of color, Wilson said.
Even from the Fed, which has repeatedly argued that it couldn’t address inequality with interest rates has a role to play, Wilson said. But she points out that when the Fed ensures the economy is strong and unemployment is low, black workers benefit.
“We do know that the black unemployment rate is more volatile with respect to changes in the macro economy,” Wilson said. “When the national unemployment rate goes up by 1 percentage point, you get about a 1.6 [percentage point] increase in the black unemployment rate.”
“It doesn’t completely eliminate the disparity, but you are going to get closer to it.”
Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.