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- The Black unemployment rate ticked up in August, as more Black Americans looked for work than found jobs.
- That runs counter to the narrative of labor shortages and difficulty companies are having with hiring.
- Experts say the numbers may show an inequitable recovery.
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In August, the unemployment rate went up for Black Americans, even as more Black workers found jobs, and it shows an unfortunate side of the recent labor shortage.
According to the Bureau of Labor Statistics' most recent jobs report, 135,000 more Black Americans were employed in August than in July. But the number of Black workers entering or reentering the labor force was even higher, with an additional 287,000 working or looking for work.
That larger jump in the labor force led to an increase in the Black unemployment rate from 8.2% in July to 8.8% in August, while unemployment declined over the month for the other race and ethnic groups tracked by the BLS. It's telling that so many Black Americans are seeking jobs, yet employers keep talking about how hard it is to find workers.
It's the "the self-evident discrimination in the labor market revealing itself," according to Dr. William Spriggs, an economics professor at Howard University and the chief economist for the AFL-CIO. He added: "The numbers this time are just startling."
Spriggs said that the numbers are like a "sledgehammer," especially in contrast with numerous stories about how much employers are struggling to find workers.
"This is discouraging," Spriggs said. "And the constant reports: 'There's a labor shortage. We can't find anybody!' These numbers say, no, it's not that you can't find anybody - you can't find the people you want. This is two different things."
It's the latest datapoint showing the uneven economic recovery that Black workers face. Black unemployment has remained stubbornly higher than average unemployment throughout the recovery; in August, it was 8.8%, compared to the overall rate of 5.2%. The white unemployment rate was 4.5% in August.
"It's an indicator that we shouldn't ignore a possible K-shaped recovery," Daniel Zhao, a senior economist at Glassdoor, said about the elevated Black unemployment rate. "It's something that we need to be careful of after every crisis."
In a K-shaped recovery, jobs and incomes grow for higher-income Americans - and the opposite is true for lower-income workers. Americans of color, especially Black Americans, have borne an uneven and disproportionate economic impact from the pandemic. That's on top of already persistent gaps in unemployment; as Insider's Madison Hoff reports, the unemployment rate for Black Americans has been "roughly double" that of white workers in most of the years since that number has been tracked.
"It's been a systemic problem in our country for a long time," Labor Secretary Marty Walsh told Insider. "Black unemployment rates have always been higher than white unemployment rates, oftentimes double that."
He added that, coming out of the pandemic, "we have to make sure that we don't leave any community behind."
"We have to make sure that we do everything we can to make sure that there's opportunities for folks to get back into the workforce - and not just back into the workforce, but put them in a position to get a chance to get into the middle class," Walsh said.
Spriggs said it will be a "very bumpy fall," and that August's report could jeopardize a chance of equitable recovery. And that comes after what Spriggs said is "the most equitable recovery plan ever," perhaps alluding to the American Rescue Plan.
He said that the additional money in unemployment insurance was "vital" in getting liquidity to Black and Latino households, who often have less in savings. But there's still a long-term unemployment problem persisting.
"If you get rid of the pandemic extended unemployment program, that's like half the Black workers by definition aren't going to be eligible to get any benefits," Spriggs said. "It couldn't be worse. It couldn't be worse than if you just designed 'I want Black workers to suffer.'"