The Good News on Unemployment for Black Americans

The Good News on Unemployment for Black Americans 1

In a recent article that stressed America’s impressive recovery from the Covid economic slump, I compared current conditions with those in late 1988, when George H.W. Bush won an electoral landslide in part because of the perception that the economy was in great shape. As I noted, inflation at the time was roughly what it is now, while the unemployment rate was about two points higher.

What I didn’t point out was that unemployment was especially high among disadvantaged groups, especially Black Americans. And one of the relatively unsung bright points of the U.S. economy in recent years has been a reduction in Black unemployment.

Here’s the history of unemployment among Black men since the Bureau of Labor Statistics began collecting that data:

Bureau of Labor Statistics

I focus on men here not because I consider women less important, but because a fantastical idea of able-bodied Black men choosing not to work as a result of excessively generous government aid or dysfunctional culture or something else has played such an unfortunately prominent role in U.S. politics over the years. Right now, for example, Republicans are demanding stringent work requirements on aid programs despite overwhelming evidence that such requirements have little effect in encouraging work but lead to large losses in coverage. What’s behind these demands? Well, the political ancestry of such demands runs right back to Ronald Reagan complaining about people seeing a “strapping young buck” using food stamps to buy T-bone steaks.

Actually, I’d be curious to see a survey of Republican voters that asked who they imagine benefits from food stamps and Medicaid. My guess is that many still think of these as programs mainly for inner-city Black people (and maybe immigrants), and are unaware that a majority of food stamp recipients are white, and that many are in rural states.

That aside, given the racial history of American welfare politics, it does seem important to realize that the historically high unemployment rate of Black Americans has improved — a lot. As you can see from the chart above, the unemployment rate for Black men is at its lowest level since the government began recording it. This is in part because we have low unemployment overall — more on that in a bit. But it’s also because the racial gap in unemployment has drastically narrowed. Here’s the gap between unemployment rates for Black and white men over time:

Bureau of Labor Statistics

In the late Reagan economy — which, as I said, Americans thought was pretty good at the time — Black men generally had an unemployment rate six to seven percentage points higher than that of white men. As of April 2023, that gap was down to 1.6 percentage points.

Now individuals are only considered unemployed if they’re actively seeking work. So is falling Black unemployment the result of potential workers simply giving up? No. I looked at the white-Black gap in prime-age (25-54) employment rates over time (the data only goes back to 1994). There’s still a gap, but it, too, has narrowed a lot over time:

Bureau of Labor Statistics

The improvement in Black employment matters a lot, and not just because of the income generated. As the sociologist William Julius Wilson argued, the loss of economic opportunities as jobs moved out of urban areas was a major driving force behind social dysfunction in Black communities. I’ve long seen the recent emergence of social dysfunction in largely white small towns and rural areas left behind by a changing economy as a vindication of Wilson’s thesis (and a repudiation of “cultural” explanations). So the fact that Black America is working again is really good news on multiple fronts.

So what went right? A long period of truly full employment was crucial. You can see from both the second and third charts here that the old rule of “last hired, first fired” still applies: Black workers are still hurt much more than whites by recessions, and correspondingly benefit more when jobs are plentiful. The sluggish recovery from the 2008 financial crisis held Black progress back; the rapid recovery from the Covid recession has been good for everyone, but especially for groups that are still relatively disadvantaged. And this is a good reason for the Federal Reserve to try, if at all possible, to avoid imposing a gratuitous recession in its efforts to control inflation.

But while full employment helps, racial gaps are considerably smaller now than they were circa 2000 — arguably the last time we had truly full employment. Why?

I don’t pretend to know the answer. It’s possible that the poisonous interaction between residential segregation and urban deindustrialization identified by Wilson has lost some of its force. I’d also argue — this will probably get me in trouble on both the right and the left — that racism and racial discrimination, while both still very real, have gradually declined over time, at least in a way that’s reflected in employment numbers.

Whatever the causes, the news here is very, very good. Let’s hope that bad policy doesn’t destroy the progress we’ve made.

Full employment has also helped people with disabilities.

The long-term decline in male labor force participation.

Unemployment is bad for your health.

It’s hard to believe how racist America was in an era some regard with nostalgia.

Feeling good? Well, better.

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