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Closing the Black-White Unemployment Gap
In the study of labor markets, few trends are as persistent as the unemployment gap between white and non-white workers. Discrimination, lack of local job opportunities, and education barriers have kept the gap wide open for most of recent U.S. history.
This gap is even more pronounced for Black workers. On average the Black unemployment rate is often twice as high as the white unemployment rate. This gap accelerates when recessions strike. Black workers are often the first to lose their jobs. The gap persists across geographies, gender, and history. But for the first time, the national unemployment gap between Black and white workers is nearing zero. Why?
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To understand this gap, we must first understand what we mean by unemployment. The federal Bureau of Labor Statistics (BLS) defines the unemployed as “people who are jobless, looking fora job, and available for work.” Contrary to popular belief, unemployment is not people sitting around, waiting for a government check. It’s folks actively looking for work—as officially defined by the BLS.
For as long as BLS has collected data, Black folks and other non-white Americans have actively looked for work but have been unable to obtain it at the same rate as white Americans. Formal work, an integral path toward economic mobility in the U.S. market economy, has historically been difficult to secure for non-white workers, until now.
So why is the gap closing? From BLS data and research by social scientists, a few theories emerge:
- A Hot Labor Market: The American labor market is the hottest it’s been in recent memory. Since October 2021, for every six people looking for jobs, there have been roughly 10 jobs available, according to BLS. To keep pace, employers have expanded beyond their traditional recruitment networks to find talent. There’s even been a push to recruit from historically Black colleges and universities (HBCUs). Every time the labor market tightens, Black workers make considerable gains.
- Declining Incarceration Rates: The gradual unwinding of the carceral system has begun to remove barriers to employment. Incarceration, which disproportionally affects Black people by a factor of five, poses a significant challenge for people seeking employment. They lose out on years of workforce development and face steep challenges reintegrating back into society. But since 2009, prison populations and imprisonment rates have decreased, partly due to state-led drug decriminalization. Additionally, legislation banning employers from collecting criminal history has reduced discrimination. These combined efforts may have historically improved Black people’s access to employment.
- A Shifting Black Workforce: The Black workforce itself has changed. With the expansion of higher education and training opportunities, Black workers have entered a more diverse range of occupations. A recent White House Council of Economic Advisers analysis found that Black workers have shifted towards a broad array of industries and away from more volatile sectors like hospitality. Along with giving the Black workforce more opportunities for employment, this shift has made them more resilient to economic and sector shocks, ensuring that the gains created during periods of growth aren’t entirely wiped out in the next recession.
- A Shifting White Workforce: Perhaps one of the longest-running shifts in labor markets is the steady decline in white labor force participation. In 2023 labor force participation exceeded pre-2007 recession levels for Black people, while for white people it matched the worst period of the 2007 recession. As the white population of the U.S. ages, retires, and shrinks, there are simply fewer white people working. These workforce exits translate to higher employment rates of non-white workers, even before the hot labor market of today.
In this post-COVID economy, it’s increasingly difficult to predict how labor markets will evolve. Whatever the explanations for the narrowing gap between white and Black unemployment, the reasons are likely to be structural, rather than temporary.
And if there is growing equality in the opportunity to join the labor market and earn wages, it’ll be fascinating to see how pay equity and the distribution of wealth will evolve in the years to come.
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Between 2008 and 2015, the various islands making up the U.S. territories received half the total media attention of equivalent-size states (4,936 vs. 10,138 articles).
An uptick in coverage of the territories in 2016 and 2017 was largely driven by the Puerto Rican debt crisis and the devastation of Hurricane María in the Caribbean.
North Korea’s 2017 announcement that Guam would be the target of its nuclear missile program also contributed to increased coverage that year.
In 2018 The New York Times reported heavily on the destruction caused by Typhoon Yutu in the Northern Marianas Islands.
The historic election of 2020 and the COVID-19 pandemic exacerbated the disparity in coverage between states and territories.
While native residents of the territories are generally U.S. citizens (except in American Samoa where they are U.S. nationals), they do not have the right to vote in general elections. Coverage about COVID-19 levels in different states and counties often excluded the territories.
The Enormous Federal Data Disparity
Federal data collection largely stops short of U.S. territories. Over the next 10 years, the Census Bureau will release approximately 264 key datasets for the 50 states. But for the territories of Guam, the Northern Marianas, American Samoa and the Virgin Islands, the Census Bureau will release only three total datasets over that same period: one decennial count and two economic surveys.
All told, the data collected by the Census Bureau will help direct at least 2.8 trillion dollars annually to 353 federal-assistance programs. While data on the 50 states helps the government direct funding where it’s needed most, a lack of territory data forces officials to operate in the dark.
For its most populous territory, Puerto Rico, federal data collection is a little better. The Census Bureau conducts an annual “Puerto Rican Community Survey” for the region’s 3.2 million residents. But the resulting estimates don’t use the same rigorous control methods as the “American Community Survey.” And data is only available on the county level instead of more specific geographies like zip codes and census tracts.
A Blindfold for Local Officials
Around the turn of the 20th century, the U.S. expanded its colonial influence over seas. Long left to the rule of the U.S. Navy, the nation’s territories were neglected by the government that claimed to rule them. This neglect hampered the development and assessment of the regions’ social programs. In recent years, a lack of federal data has hindered the ability of island territories to respond to disasters like the COVID-19 pandemic and extreme weather.
For example, in 2018, Typhoon Yutu devastated the Northern Mariana’s islands. By 2020, the recovery effort had just gotten underway when the spread of COVID-19 crushed the region’s critical tourism industry. When the federal government asked the region’s department of labor to estimate how many workers lost their jobs during the pandemic, they had no idea.
Speaking to the Honolulu Civil Beat, the head of Northern Mariana’s labor department Vicky Benavente said, “This is one lesson we learned. Data is so critical for justifying our asks to the federal government.”
State governments had ready access to reliable data. They used monthly reports from the Current Population Survey to monitor pandemic-induced rises in unemployment. Working without this data, the Northern Marianas government had to rely on a survey of employers conducted every two years. By 2021, so many businesses had shut their doors that few were left to reply.
About the Data
Data is sourced from the Department of Labor's Bureau of Labor Statistics (BLS) via the Federal Reserve's data tool (FRED). BLS estimates on labor force participation, unemployment and employment ratio are drawn from regular representative nationwide surveys. For more information, visit the BLS's unemployment research center.
Further Reads
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