The Racial Gaps in America's Recovery
The national unemployment rate continues to improve, but progress has been much slower for blacks and Hispanics.
When the jobs numbers are reported each month, it’s easy to think of America’s workers as a single entity, moving (however glacially) toward economic recovery. According to the Bureau of Labor Statistics’s latest report, the unemployment rate in July was 5.3 percent, which is encouragingly low compared to the height of the recession, when it reached 10 percent. It’s also tantalizingly close to the 5.0 to 5.2 percent range that Federal Reserve policymakers say will signal the country’s return to full employment. What’s lost in that marquee number, though, is that this progress has been incredibly uneven, and minorities continue to struggle disproportionately.
Currently the national unemployment rate for white Americans is about 4.6, for Hispanics, it’s 6.5, and for blacks, 9.1. Those numbers are strikingly worse.
For white Americans unemployment is back to pre-recession levels, or lower, in 14 states—and within 1 percentage point of pre-recession norms in another 28. African Americans, by contrast, remain the furthest away from their pre-recession levels. In Arkansas, Illinois, Maryland, Pennsylvania, and South Carolina, the unemployment gap is more than two and a half times as large as the rate for white Americans. In Washington D.C., it’s five times as high. This year is the first since then that the national unemployment rate for black Americans has dipped below the double-digit mark—and that feat has only been accomplished in 11 states. The lowest state unemployment rate for black Americans—6.9 percent, in Tennessee—is equivalent to the rate of white unemployment in West Virginia, the state with the highest share of jobless white Americans in the country.
Hispanics also trail behind. In Connecticut, the Hispanic unemployment rate is more than 3 times as high as the white employment rate. In North Carolina, it’s more than 2.6 times as high, and in Pennsylvania and Nevada, it’s more than double the rate for white residents.
Racial inequality is a constant in the U.S. economy. Black and Hispanic workers consistently have a higher rate of unemployment than their white counterparts—for blacks it’s usually twice the rate of whites and for Hispanics, it’s closer to 1.5 times. (These gaps were the smallest at the peak of the recession, since so many white Americans were also losing their jobs.)
In the recovery, white unemployment numbers have improved more rapidly than minority numbers. According to Valerie Wilson, the director of the Program on Race, Ethnicity, and the Economy at the Economic Policy Institute, the recovery only really started for black and Hispanic Americans in 2014. “That’s when you saw the greatest improvements in the unemployment rate, the employment-population ratio, and labor-force participation,” she said.
To be clear, the unemployment rate between these minority groups and white Americans in most places never reached parity, and some of these states had pre-recession minority unemployment rates that were high to begin with. But the fact remains that seven years after the start of the recession, many black and Hispanic Americans are only now seeing their employment situation improve. That’s an important consideration especially when it comes to major policy decisions related to the recovery, such as raising interest rates, which have been kept low by the Fed after the downturn in an attempt to spur growth. Wilson says that changing things now, when the national picture looks better but just as many minorities are getting back on their feet, could dampen the long-awaited progress for these groups.
It’s also important to consider why this stubborn gap persists in the first place. Perhaps most troubling is the fact is that discrepancies in unemployment haven’t improved much over time, despite the fact that younger generations of minorities are graduating from college at higher rates. The stubbornness of the unemployment gap points to other issues—such as systemic discrimination and racial biases—that existed long before the recession and its sluggish, unequal recovery.