How the Recession Hurt Black College Grads More Than Their Peers

The gap in unemployment rates between African Americans and whites is even worse now than it was in 2007.


The Great Recession might be over, but it has left behind widened racial inequalities in unemployment and wealth.

The unemployment rate for white Americans over 25 who had not finished high school was 9.7 percent in 2013. Meanwhile, the unemployment rate for black Americans who had advanced further on their educational trajectories, attending but failing to graduate from college, was 10.5 percent. That’s an increase from 2007, before the recession:

U.S. Unemployment Before and After the Recession

This same trend can be seen among recent college graduates. The unemployment rate for black degree-holders between the ages of 22 and 27 was 12.4 percent in 2013. The unemployment rate among all college grads in that age range, by comparison, was 5.6 percent, according to a May report from the Center for Economic and Policy Research. The number was even lower for white college graduates in the age range—4.9 percent, the study’s co-author told The New York Times.

That’s a gap of 7.5 percentage points. Compare that to 2007, before the recession, when the gap was just 1.4 percent. Black Americans with college degrees then had a 4.6 percent unemployment rate, while white Americans with undergraduate degrees were at 3.2 percent, the Times notes.

And the recession hasn't only affected people coming out of college. The median net worth of white households was 10 times that of black households’ median wealth in 2007—and 13 times the median wealth of black households in 2013, according to a recent Pew Research Center report.

Median Worth of U.S. Households

Why are white Americans recovering from the recession so much better than black Americans?

The CEPR study points out that the recession made it difficult for all young people to get jobs, and racial prejudices in the U.S. have always skewed the labor market against black applicants. Employers are less likely to call back applicants with names that sound African American, according to some studies.

Additionally, black U.S. graduates who are working are more likely to be overqualified than other Americans. Of the black college graduates ages 22 through 27 who were working in 2013, 55.9 percent had jobs that didn't even require four-year degrees, up from 45 percent in 2007. For all recent college grads, that number has hovered around 44 percent for the last decade. (It was 45 percent in 2013, according to the report.)

And even black Americans who are wealthy recovered from the recession at a lower level than their white counterparts—at least in part because the two groups invest their money differently. Stocks, in which white Americans invest more so than black Americans, have done well since the recession ended. Meanwhile, black Americans tend to pursue more conservative investments such as certificates of deposit, life insurance, and savings bonds.