MLK Holiday and Black Unemployment: What Must Be Done?

As the country celebrates Martin Luther King Jr. National Holiday, it is an appropriate time to reflect on what must be done to improve the employment of blacks during the economic recovery. This question is important because clearly, economic growth alone is not enough. Blacks find themselves in a unique situation –as the economy improves the rising tide is lifting all boats except theirs.

The employment picture remains a very dismal one for African-Americans. Each month when the Labor Department publishes its report on employment and unemployment, the figures illustrate how large the black-white unemployment disparity is, and how progress for blacks is occurring at a snail’s pace relative to progress among other groups. Given the unique labor market problems encountered by African-Americans and the inability of those problems to be resolved by economic growth, it is time that the government forms a National Commission on Black Unemployment. The commission should explore all the dimensions of the problem and make recommendations to the Congress and President regarding the most appropriate solutions. Although society is becoming increasingly accustomed to race neutral policy prescriptions, the unique nature and dimensions of this problem merit special attention; just as did the financial meltdown, the automobile industry crisis, and the national deficit and debt.

There is an old adage which says that blacks are the “last hired and first fired.” However, another wise saying is even more befitting to the current status of blacks.  The observation was made 20 years ago by Ray Marshall, the distinguished labor economist and former Secretary of Labor. During a casual conversation, the always astute Prof. Marshall observed that the problem in today’s economy is not so much that blacks are the “last hired and first fired.” Rather, a more accurate description is that “black workers are always an increasing percentage of declining industries.” His observation, made 20 years ago, is even more appropriate today, especially given the globalization of the economy and lingering effects of the Great Recession.

Over the last year, the economy continued to recover from the worst recession since the Great Depression. As economic growth picked up, the official unemployment rate declined from 9.4% to 8.5%. While that rate is still much too high, the improvement was welcomed relief to corporations who have been hoarding money rather than investing because they were uncertain about the future. It is even better news to millions of workers who have been struggling with long-term unemployment and under-employment.

The improving labor market has not been experienced by all race and ethnic groups. Blacks, in particular, have been left behind. In December of 2010, black unemployment stood at 15.8% – in December of 2011 it was still 15.8%. In contrast, over the last year Hispanic/Latino unemployment decreased from 13.0% to 11.0%, and white unemployment decreased from 8.5% to 7.5%. So black unemployment is twice the level of white unemployment, and it appears to be stuck in the mud, and not improving.

The benefits of economic growth are not being felt by black workers. Because employment among other groups is improving while it is stagnating among blacks, the latter is becoming an increasingly larger percentage of all unemployed workers. While the Gazelle Index Economic Outlook expects overall unemployment to improve significantly over the coming year, our expectations are different for black workers.

The high rate of black unemployment has many dimensions which merit special attention. For example, its causes can be can be traced to significant racial disparities in the following categories: educational achievement; the location of jobs vis-à-vis employment opportunity, especially in urban areas; incarceration rates among men, women and youths; crime victimization rates; health and wellness; wealth and income; business development; industry and occupational employment characteristics; and the effects of discrimination past and present. While the list is long, it only partially reflects the many ways in which the problem is manifested. One thing is certain however, growth is not enough. A National Commission on Black Unemployment is needed for the same reasons the country formed commissions to better understand and address other persistent problems, e.g. the financial meltdown, national debt and automobile industry recovery. As a measure of the need for such a Commission, one simply has to look at the fact that blacks now comprise 11.6% of the workforce but 22% of all unemployed workers, a share that is increasing monthly as employment among other groups improves and that among blacks stagnates.