Thursday, March 22, 2012

African Americans and the Great Recession

Black workers have been especially hurt by the Great Recession and the weak economic recovery. The black unemployment rate was 15.8 percent in 2011 compared with 7.9 percent for whites and 11.5 percent for Hispanics.

The question is, why have blacks been hit so hard? A new study by the Department of Labor has the answers. First, blacks have been disproportionately affected by what the report characterizes as "drastic layoffs in government." Blacks are 30 percent more likely than non-blacks to work in the public sector. Nearly one in five blacks (19.3 percent) works for federal, state, or local government versus 14 percent of whites and 10 percent of Hispanics.

Second, once unemployed, it has been more difficult for blacks to find another job because they are more likely to live in areas with relatively high unemployment rates. Fully 63 percent of unemployed blacks versus 39 percent of unemployed non-blacks live in areas with an unemployment rate of 10 percent or more. That explains why blacks are more likely than whites or Hispanics to have been out of work for 27 weeks or more (defined as the long-term unemployed). Nearly half of unemployed blacks (49.5 percent) are long-term unemployed versus 42 percent of whites and 40 percent of Hispanics.

That explains the bad news. The good news is that the worst may be over for black workers. The number of employed blacks grew by 700,000 between January 2011 and January 2012.

Source: Department of Labor, The African-American Labor Force in Recovery

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