Even during expansion, African Americans are more vulnerable in the labor market. Progress has not erased systematic racial differences in market outcomes. With higher unemployment rates, lower pay, and fewer benefits regardless of educational attainment, there will need to be new and innovative approaches to shrinking the racial wealth gap.
To view the original research and data created by Christian E. Weller with the Center for American Progress, click here.
The U.S. labor market has now seen a record 109 months of uninterrupted job growth, with the overall unemployment rate falling to its lowest level in 50 years. (see Figure 1) However, African American workers still face more hurdles to get a job, never mind a good one, than their white counterparts. They continue to face systematically higher unemployment rates, fewer job opportunities, lower pay, poorer benefits, and greater job instability. These persistent differences reflect systematic barriers to quality jobs, such as outright discrimination against African American workers, as well as occupational segregation—whereby African American workers often end up in lower-paid jobs than whites—and segmented labor markets in which Black workers are less likely than white workers to get hired into stable, well-paying jobs.3 Despite African American workers having increased access to jobs and actually getting more jobs, labor market outcomes—including higher unemployment and fewer good jobs—continue to be worse for African American workers and their families.
These differences are not new, and the longest labor market expansion on record has not eliminated them. African Americans have always been more vulnerable in the labor market. They regularly experience higher unemployment rates and work in worse jobs, which feature lower pay and fewer benefits, than whites. Moreover, they tend to work in jobs that are less stable than those held by white workers. For example, African American workers often see their unemployment rates go up sooner than white workers when the economy sours, and their unemployment rates also take longer to decline when the economy improves than is the case for whites—a phenomenon often described as “last hired, first fired.” Moreover, unemployed Black workers look longer to find and secure a new job than do white workers.
The labor market experience for African Americans has historically been worse than that for whites, and this continues today. There are several factors that have contributed and continue to contribute to this. These include repeated violent oppression of African Americans such as the riots that destroyed Black business owners’ wealth on the Black Wall Street in Tulsa, Oklahoma in 1921, codified segregation, legal racial terrorism during the almost centurylong period from Reconstruction to the civil rights era, systematic exclusions of African Americans from better-paying jobs, and continued occupational segregation. Despite notable improvement, today’s Black workers still have a harder time than whites securing good employment. For Black women, the intersection of race and gender bias has had a combined effect on their labor market experiences, too often devaluing their work and confining their opportunities.
To close these persistent labor market gaps, African American families need more wealth to begin with. Wealth makes it easier for families to invest in their own futures. For example, wealth can be used to support both children’s and parents’ education, to start a business, to buy a house in a neighborhood with access to good jobs, and to move to new places when better opportunities arise. Each of these benefits gives families access to more and better jobs. People with a college degree typically have lower unemployment rates and greater access to well-paying, stable jobs with decent benefits; starting a business gives people more control over their own lives and thus the potential to avoid the uncertainty that can come from working for somebody else in a low-paying job with irregular hours; and buying a house closer to where good jobs are located makes it easier to switch jobs when one does not pan out as expected. Similarly, wealth allows families to move to a new location when jobs in one area decline or disappear altogether. Having less wealth makes all these benefits much harder to achieve for African Americans.