The economic fallout from the coronavirus and the recent civil unrest have placed an uneasy spotlight on the disparity in employment opportunities among ethnic groups in the United States.
While the overall U.S. unemployment rate declined to 13.3% in May, black Americans saw it increase to 16.8%, up from 5.8% in February. For black men aged 20 and over, the unemployment rate is 15.5%, while for women in that cohort it stands at 16.5%. Black teens aged 16-19 now experience a rate of 34.9%.
Until there is equal opportunity to obtain gainful employment, the promise of America will not be realized.
The people whose ancestors were forced to help physically build this country and lay the foundations for free enterprise and the wealth that followed suffer from more than systemic racism or the degradation of their basic human rights.
There is a clear and easily identifiable inequality in employment opportunities that persists to this day. Even as the worst of the economic free fall is now behind the U.S., the opportunity to address long-term and systemic inequities embedded in society and the labor market cannot be missed.
Until there is equal opportunity to obtain gainful employment, the promise of America will not be realized.
One can point to Barack Obama or Colin Powell and state that everyone has equal opportunity in America, but that’s like saying everyone has the chance to win Mega Millions. Why are Americans of African descent victimized by the coronavirus more than those of European descent? Why are the schools in predominantly African-American communities struggling for books and air conditioning while suburban children attend modern campuses?
In the charts that follow, you can decide for yourself if the legacy of racism has been resolved, and then commit to ensure that truly equal education, opportunity and well-being are available for all.
Unemployment rates for black and white adult men
Unemployment for white men (20 and older) has averaged 4.8% since 1972. The average unemployment rate for black men has been 10.6%. Though great reductions in joblessness have been made during the economic recovery since 2010, a gap still exists.
The second figure shows that the gap between black and white unemployment increases during recessions and then endures for months after, before narrowing again during the ensuing recovery. At best, that pattern speaks to seniority, but more likely to bias in hiring and firing.
Unemployment rates for black and white adult women
Unemployment for white women (20 and older) has averaged 4.9% since 1972. The average unemployment rate for black women has been 10.0%. Though the employment profile for black women is slightly better than for black men, a black-white gap persists.
The second figure shows that, as with adult men, the gap between black and white female unemployment increases during recessions and then remains for months after, before narrowing again during the ensuing recovery. At best, that speaks to seniority or perhaps to bias in hiring and firing. The tightening of the gap during the health crisis most likely attests to the indiscriminate nature of the shutdown of normal activity.
Unemployment rates for black and white teenagers
The unemployment rate for white teenagers in the labor force (16 to 19 years old) has averaged 15.4% since 1972. The average unemployment rate for black teenagers has been 34.5%. The high rate of unemployment for both of those cohorts just entering the workforce is a disturbing reminder of the need for programs to accept first-time employees and to get them on a path to successful careers.
The second figure shows that the gap between black and white unemployment rates increases during recessions and then for months after, before narrowing again during the ensuing recovery. Again, that pattern is most likely because of last-in, first-out hiring and firing. An adult supporting a family is more in need of a job than a child who can still live at home.
The tightening of the unemployment gap during the health crisis is due to a sharp jump in white teenage unemployment from 12% to 31% in April, while black teenage unemployment moved from 24% to 28%. Because these data are based on surveys, an assessment of those moves seems premature.
Long-term impact of unemployment
Gains made by the labor force during the 2010-20 economic recovery – and the expansion of opportunity that went with it — are at risk of being reversed by the coronavirus shock. If the shutdown of the economy were to drag on, with short-term layoffs leading to further automation or businesses simply doing more with less, then we could expect the labor force to shrink as the unemployed become more and more discouraged.
The figure below shows that the labor force participation rate grew from the 1960s through the end of the 1990s as the U.S. manufacturing and service sectors grew and as women found places in the workforce. The participation rate peaked at the end of 1999, as manufacturing was pushed offshore, but began to recover in 2014 as the economic recovery from the Great Recession took hold and as the service sector gained the dominant role in the economy.
That upswing in labor force participation lasted until the coronavirus forced the shutdown of the economy after February 2020. The three-percentage point drop to 60.2% in the labor force participation rate in April and the uptick to 60.8% in May implies the depth of discouragement among workers that poses a threat to consumption and economic growth.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
