The state of black employment: Better, but dangerously fragile

The top line numbers seem to tell it all. When it comes to American employment, a rising tide lifts all boats. The jobless rate in America reached a 50-year low in April, and black unemployment, at 6.0 percent, is the lowest it has been since the Bureau of Labor Statistics began measuring it in 1972. But the story does not end there.

The fact is that black unemployment is still almost twice the national average; blacks are almost 86 percent more likely to be unemployed than Americans as a whole. This gap in employment has narrowed, however, since the depths of the Great Recession, when white unemployment hovered around 6.6 percent and black unemployment dipped as low as 14 percent. The African American employment rate was more than twice the overall rate during the recession but has narrowed to 86 percent percent greater than the employment rate today. This suggests a roughly 15 percent relative gain for black Americans between 2012 and 2019. 

While black unemployment is low by historical standards, it is still at or near what would be considered recession levels for other races. Any emphasis on improving the state of black labor in America, therefore, should focus not only on the bottom-line numbers, but the employment rate of African Americans relative to other groups.

In order to reduce black unemployment to more closely match the overall labor market, it would be useful to closely scrutinize the landscape of black employment in the United States. One feature of this landscape is the 10 largest black-majority cities. These are cities, such as Baltimore, Atlanta and New Orleans, that have majority-black governments and populations. Surprisingly, in those cities the employment gap between blacks and whites is among the largest nationwide. In New Orleans and Atlanta, black unemployment rates are more than five times larger than white unemployment rates. 

Why is this? Is there a leadership dynamic in these cities that provides political cover for such dismal black labor force representation?

The other broad measure of the state of African American labor is the labor force participation rate. Despite the rising economy and so-called “full employment,” the labor force participation rate among all workers — but particularly males — continues to be stubbornly low. The labor-force participation rate for African Americans between ages 25 and 54 — prime working ages — has not recovered to 2008 levels, and even those rates hover well below levels in 1999 and 2000. 

For African Americans, persistent low labor force rates make it even more difficult to overcome the employment gap; their skills atrophy from persistent exclusion from the workplace. Even as the labor market seeks to absorb more workers, there are still barriers to entry for workers who do not have recent skills and experience.  

Persistently high incarceration rates pose a formidable headwind for African Americans seeking economic and social advancement. It is not certain whether low employment and labor force participation cause increased incarceration rates, or vice versa, but the two phenomena are certainly related. Blacks are incarcerated or over five times the rate of whites. Despite accounting for less than 14 percent of the overall population, blacks constitute more than 40 percent of all incarcerated persons in America. It goes without saying that having a criminal record complicates efforts by formerly incarcerated individuals to obtain post-release employment. 

Moreover, serving significant periods of incarceration reduce one’s work experience and labor market skills. Policy initiatives to reduce incarceration and instill workforce skills among formerly incarcerated individuals, including the First Step Act spearheaded by the Trump administration, should be a priority going forward.  

The labor climate for African Americans, although better than in the past, remains dangerously fragile. Blacks tend to occupy lower-skilled and semi-skilled trades, and are affected more when recessions occur. They often are the last to be hired and the first to be fired. Because of this cycle, it takes longer for blacks to fully recover from periods of prolonged cyclical unemployment. 

A perhaps under-appreciated aspect of labor market dynamics is entrepreneurship. Signs point to a resurgence in black entrepreneurship over the past two years, with one survey citing a more than 400 percent increase in small-business starts by African Americans in 2018 alone — the highest increase among any ethnic group. Barriers to entrepreneurship continue to fall in the current deregulatory environment, and that bodes well for black businesses. 

Blacks workers, like all workers, will continue to benefit from economic policies that spur economic growth — especially private-sector growth. But black Americans would particularly benefit from policies that protect low-skilled and semi-skilled labor, including reforms of the immigration and international trade regimes. 

Moreover, America’s criminal justice and prison systems are in desperate need of reform. We cannot continue to support a system in which almost 2 million people remain idle and unproductive for extended periods of time. This only compounds the problem — social isolation — that put them there in the first place.

Armstrong Williams (@ARightSide) is the owner and manager of Howard Stirk Holdings I & II Broadcast Television Stations and the 2016 Multicultural Media Broadcast Owner of the Year. He is the author of “Reawakening Virtues.”