A few months ago, I wrote a post about how the Coronavirus-triggered recession disproportionately targeted Black workers. As my wife can attest, I’m often wrong about stuff. But, unfortunately, this time the unemployment rate suggests I may have been right.
First, the good news. Recently, the monthly unemployment reports put out by the government have been trending in the right direction. Between April and June, the unemployment rate dropped from 14.7 to 11.1 percent. In layman’s terms, that’s a decline from really f&$king bad to just plain f&$king bad. An unemployment rate of 11.1 percent is higher than at any point since the 1950s. But, it’s still an improvement over just a few months ago. And, for now, we’ll take any good news we can get.
Unfortunately, that recovery has been unequal along racial lines. So, while you wouldn’t know it from listening to the president, recent jobs reports haven’t been good news for Black people. Let’s take a look.
Unemployment Looking Better, but Only for Some
When the Bureau of Labor Statistics (BLS) makes the unemployment statistics available, the “headline” number — 11.1 percent in June 2020 — gets a lot of attention. But, the BLS also publishes a lot of other useful information, including rates by race, ethnicity, and gender. Using this information, the figure below shows that while the unemployment rate has dropped for white people, it has hardly budged for Black people. In fact, the much celebrated headline May 2020 number — you know, the one that surprised all us economists — hid a stark fact. The unemployment rate actually rose for Black people.
Figure. Unemployment Rate by Race, February 2020 to June 2020
The figure also shows how big, but equal, the initial shock to employment was for both Black workers and white workers. In April 2020, the first full month after Coronavirus hit the U.S., the gap between Black workers and white workers was just 2.5 percentage points, about the same as it was in February. Now, it’s 5.3 percentage points. Whatever improvements are happening in the labor market, they aren’t happening for Black workers.
It won’t be clear exactly why this his happening for some time. But, remember, Black people face discrimination in labor markets. And, one of the ways this discrimination manifests itself is in an inability to get job interviews. In one study, to have a 90 percent chance of getting a callback, a white person would need to apply to 22 jobs. A Black person would need to apply to 34. That would obviously lead to a lag in Black people regaining their jobs. Whatever the reason, the Coronavirus continues to exaggerate inequality that has always existed.
Eye on the End of July
July is the last month of extended unemployment benefits. In August, those extra $600 a week will stop coming unless congress acts. And, while congress may want to tweak the program around the edges — for example to make sure people can’t make more in unemployment than they used to at work — it is important to continue it.
After all, unlike stimulus checks that go out to everyone willy nilly (“willy nilly” is an official economics term), the unemployment insurance program targets those directly affected by the pandemic. And, as you now know, those people are disproportionately Black. At a time when our nation is increasingly aware of racial inequality, let’s not pull back a benefit that is helping make this difficult time a little less difficult for Black people.