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By Catholic Online (NEWS CONSORTIUM)

7/4/2014 (11 months ago)

Catholic Online (www.catholic.org)

Black-white unemployment gap appears to have emerged in the 1940s

When African-Americans marched on Washington in 1963, it was under the banner of "Jobs and Freedom." There remains a great inequity with the former; the number of unemployed blacks in America remains twice as much as whites, and has remained that way for largely six decades, beginning in the 1940s. The reasons behind this unemployment disparity is complex.

The jobless rate among whites last month was 6.6 percent; among blacks, 12.6 percent. The unemployment rate for blacks has averaged about 2.2 times that for whites.

The jobless rate among whites last month was 6.6 percent; among blacks, 12.6 percent. The unemployment rate for blacks has averaged about 2.2 times that for whites.

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By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

7/4/2014 (11 months ago)

Published in Business & Economics

Keywords: Unemployment, black Americans, white Americans, disparity


LOS ANGELES, CA (Catholic Online) - The earliest year for which the Bureau of Labor Statistics has consistent unemployment data by race, in 1954, the white rate averaged five percent and the black rate averaged 9.9 percent.

The jobless rate among whites last month was 6.6 percent; among blacks, 12.6 percent. The unemployment rate for blacks has averaged about 2.2 times that for whites.

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For the largest disparities among unemployed blacks and whites, in the late 1980s, black unemployment was as much as 2.77 times that of white unemployment. The manufacturing sectors that employed disproportionate shares of African-Americans at that time dried up.

Ironically, the smallest gap between black and white unemployment came in the summer of 2009 during the Great Recession. White unemployment at that time rose so high, so fast, that the black jobless rate was "only" 1.67 times higher.

This disparity appears to have emerged in the 1940s, according to a 1999 analysis of Census data. Although labor economists, sociologists and other researchers have offered many explanations for the persistent two-to-one gap, theirs is no consensus on causes. One 2011 working paper, after reviewing existing research on wage and unemployment differentials among blacks and whites, concluded that "none of the existing models of race discrimination in the labor market explains the major empirical regularities."

Blacks are "the last to be hired in a good economy, and when there's a downturn, they're the first to be released," William A. Darity Jr. of Duke University told Salon in 2011, is one common explanation.

Furthermore, a 2010 article testing that "last hired, first fired" hypothesis against panel data from the Current Population Survey (from which the unemployment rate is derived) found considerable support for the "first fired" part but not for the "last hired" part.

It was found that while blacks are in fact disproportionately likely to lose their jobs as the business cycle weakens, but the hiring side is more complex: "[E]arly in the business cycle, those blacks with a stronger attachment to the labor force (i.e., the unemployed) are the first hired. Blacks who are nonparticipants tend to be hired late in the business cycle when labor demand is particularly strong."

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