How the job market is changing for black Americans

For black Americans, job prospects have improved since 2020. This is good news.

The bad news is that the gains made over the past two years — since the killing of George Floyd on May 25, 2020, have led to a national reckoning about race — look as shaky as ever. Indeed, inflation threatens to turn progress in the labor market upside down as policymakers respond to the backlash against rising prices.

While the uprisings that brought thousands to the streets in 2020 helped highlight the disadvantages of black workers, most experts instead point to government aid and a tight US labor market during the pandemic as driving the collective progress of themselves and other groups.

One key measure that economists track shows employment of black Americans of “essential working age” — 25 to 54 — jumped to 77.4% in April, the highest rate in 22 years. While this is still well below the equivalent measure for white Americans, the slight rise has narrowed the gap between the two numbers to the narrowest number ever, in data going back to 1994.

It’s a sign that the hottest labor market in generations is making discrimination against African American job applicants “more expensive for companies,” according to Algernon Austin, director of race and economic justice at the Center for Economics and Policy Research in Washington, D.C.

The black unemployment rate has also returned to pre-pandemic levels. After the 2008-2009 recession, it took nine years for black unemployment to return to levels that prevailed before the economic downturn. This time, it only took two.

The figure was 5.9% in April – down from the 6% recorded for the group in February 2020 before COVID-19 shut down businesses across the United States.

However, the economic gap between black workers and white workers persists. And for many, the hope inspired by Black Lives Matter has been dashed by other racist killings, including this month’s mass shooting in Buffalo, New York.

The unemployment rate for black women, among the workers hardest hit in the early months of the pandemic, fell to 5% from 16.6% in May 2020. But this is still well above the 2.8% rate seen by white women.

“Overall, we are frankly seeing that a lot of black workers are able to take advantage of labor market tightness and strong employer demand for jobs that would have taken much longer to reach other previous downturns,” Joel Gamble, chief economist at the Department of Labor American.

Part of the difference this time has to do with the reaction of the US government and the Federal Reserve.

Instead of opting for a long, drawn out recovery with all its disproportionate consequences for black Americans — as they did in the 2008-2009 recession — lawmakers stepped in during the coronavirus outbreak with massive financial support for American families, transferring trillions of dollars to them through stimulus checks and dramatically expanded unemployment insurance programs. Big. This ensured continued consumer spending in the economy, which in turn provided a basis for the re-employment of those newly fired from work.

“In this recovery, we are unlikely to see scars from long-term unemployed workers,” Gamble says.

Black labor may also have received a boost this time around due to the pandemic’s unusual effect on industry-wide employment, according to Evgenia Doszak, an economist at the Federal Reserve Bank of San Francisco.

Duzhak, in an analysis published on the bank’s website on May 16, found that black unemployment had not risen on a relative basis during the pandemic as much as expected. This is “partly because more than 25% of black men work in occupations of production, transportation, and material transport, and these occupations were better than the service sector.”

But now, progress risks being reversed in an all-out effort to tame inflation.

Economic policymakers in the White House and at the Federal Reserve are shifting their priorities from rebuilding the workforce to curbing price pressures through austerity measures — which threaten to slow or even reverse recent employment advances.

Republicans and two Democrats sidestepped President Joe Biden’s agenda to Build Better, a broad package that included several job creation initiatives and would have added more to public spending, citing the need to curb inflation.

Perhaps most important is the central bank’s response. Fed Chair Jerome Powell and his colleagues have embarked on a rapid tightening cycle and warn that fighting inflation with higher interest rates is likely to raise the unemployment rate, and may eventually lead to another recession.

For observers such as William Spriggs, Howard University economics professor and chief economist for the American Federation of Labor and Congress of Industrial Organizations, this poses an existential risk to the entirety of efforts to build a more inclusive economy, the need for which has been underscored greatly by the events of the past two years.

“We’re still the last employee hired, so if you raise the unemployment rate, you roll back all the gains,” Spriggs said. “What is the point of a narrow labor market? It is the necessary condition for the advancement of blacks.”