Black unemployment rate falls in September jobs report, but doesn’t tell the full story

The shrinking Black labor force suggests the improved unemployment picture for Black Americans can be attributed partially to job seekers exiting the labor force rather than an indication of longer-term recovery, economists said.

“The improvement in this month’s unemployment rate is misleading given the decline in the participation rate, in particular when you look at Black men and women,” said economist Valerie Wilson a director at the Economic Policy Institute.

“I don’t think that is signaling any acceleration or improvement in the pace of recovery at this point,” Wilson added, noting the difficulty of drawing conclusions about labor market trends from month-to-month changes.

The combination of falling unemployment rates and labor force participation indicates a division in the economic recovery, according to William Rodgers, director of the St. Louis Federal Reserve’s Institute for Economic Equity.

“You have a set of people who are benefiting and being drawn into the economy and finding opportunity, but then you have another set of people who face barriers, hurdles, constraints that are putting them in positions to where they are leaving the labor force,” Rodgers said.

Economists said factors contributing to labor force dropout include the Covid-19 delta variant, a disproportionate representation of Black workers in industries impacted by the pandemic and systemic discrimination.

Among Americans not in the labor force in September, 1.6 million cited the pandemic for why they could not look for work, according to Labor Department.

“Those labor force participation rate declines are also another indicator of damage from this delta peak. Reliable child and elder care has continued to be a problem for a lot of people,” University of Georgia economics professor Ian Schmutte said.

While the 7.9% Black unemployment rate in September indicated a sharp improvement from the month prior, the white unemployment rate recovered to the 7% range by August 2020. The unemployment rate for white workers last month was 4.2%, down from 4.5% the month prior.

“That suggests and points to underlying structural factors that result in this persistent two-to-one disparity in unemployment, and discrimination is a part of that,” Wilson said.

September’s jobs report also showed labor market recovery among women lagging behind men, a trend throughout the pandemic.

Article source: https://www.cnbc.com/2021/10/08/black-unemployment-falls-in-september-jobs-report-but-doesnt-tell-full-story.html