Who’s Right About Black Unemployment?

My attention was captured by an editorial in the Las Vegas Sun criticizing the use of unemployment statistics for blacks by the Trump Administration:

Although the Bureau of Labor Statistics reported the overall black unemployment rate at 6.2% in May 2019, Perry argues compellingly that the figure doesn’t tell nearly the whole story.

Perry also shows that not only are African-Americans struggling with overall employment, they face an enormous gap in joblessness compared with whites.

In the black-majority cities of Atlanta and New Orleans, for example, unemployment is five times higher among blacks than whites — 11.5% compared with 2.5% in Atlanta, and 11.3% compared with 2.3% in New Orleans. Perry notes that gaps of at least 3.9% exist in all 10 of the nation’s largest black-majority cities.

Zooming out and looking at the nation’s 28 black-majority cities with at least 65,000 residents, Perry found that 25 had higher unemployment among blacks than whites.

Who’s right? I think they both are. Here’s the Bureau of Labor Statistics’s most recent employment situation report:

Among the major worker groups, the unemployment rates for adult men (3.3 percent), adult women (3.2 percent), teenagers (12.7 percent), Whites (3.3 percent), Blacks (6.2 percent), Asians (2.5 percent), and Hispanics (4.2 percent) showed little or no change in May. (See tables A-1, A-2, and A-3.)

and here’s what the Brookings report to which the editorial refers says:

Take the 10 largest black-majority cities. In each of these cities, the black unemployment rate is 3.9-10.8% higher than that of white residents. Black residents of Atlanta and New Orleans experience unemployment rates of 11.5% and 11.3% respectively, figures more than five times larger than the white unemployment rates of 2.5% and 2.3%. In Macon-Bibb county, Ga., the black unemployment rate (11.5%) is quadruple the white unemployment rate (2.7%). For a list of cities included in the map, as well as the accompanying data, click here.

The Great Recession of 2007-2009 saw the aggregate unemployment rate peak at 10.0% in October 2009. 10 years later, black communities continue to face disproportionately high unemployment.

How can these disparities coexist with the notion of full employment? Full employment, informally defined, means that there are more jobs than people looking for them. But the concept is an imperfect measure of economic achievement. Unemployment rates that fall too low can drive inflation. Full employment fails to capture other nuances of the labor market, prioritizing job quantity over quality. As we use the term today, full employment is colorblind. Like the unemployment rate, the national data masks racial differences.

Note, too, the graph above (sampled from the Brookings report). As you can see black unemployment is presently lower than at any time since Nixon was president, the white unemployment rate is presently lower than at any time since Reagan was president, and the gap between the two is at an historic low.

That doesn’t even touch on the highly important subject of the black male labor force participation rate, which is persistently high. The black female labor force participation rate is higher than the white female labor force participation rate.

Still, I agree with bottom line of the editorial and the report. The black unemployment rate in black majority cities is too high. I would submit the following hypotheses:

• Black majority cities are mismanaged and undercapitalized. The remedial action would be to implement measures that improved governance and attracted businesses.
• The policies that have been adopted over the last 35 years did not help black people. Those policies include business regulations, trade policies which led to American deindustrialization and education policy. Whatever effect higher education has on wages it does not apply to at least half the people. We can’t accept policies that coldly leave those people behind. The remedial action are to reduce trade with China by whatever means necessary, restructure federally-subsidized educational loans to focus on tracks that will lead to gainful employment, and constrain business regulation to what’s actually necessary.
• Illegal immigration is not good for native-born blacks. The remedial actions would be to change our immigration policy to a skills-based system, limit immigration to what is actually necessary to promote economic growth, and reduce illegal immigration.

If I had been given the opportunity to ask one question of the Democratic presidential candidates, it would have been “What will you do to improve the employment and life prospects for young, urban, black men?”