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Job Prospects for People of Color Remain Bleak Job Prospects for People of Color Remain Bleak

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Job Prospects for People of Color Remain Bleak

At some point in 2014, 1 in 5 black workers will be unemployed, along with about 13.6 percent of Hispanic workers. It's time for new policies to stimulate demand.


Heidi Shierholz, with the Economic Policy Institute since 2007, researches policies that affect middle- and low-income families. She has a bachelor's in math from Grinnell College, a master's in statistics from Iowa State, and a master's and doctorate in economics from the University of Michigan.(Courtesy photo)

Each month, the official unemployment rate provides the share of the labor force unemployed in that month. But this understates the number of people who are unemployed at some point over a longer period, since someone who is employed in one month may become unemployed the next, and vice versa.

Therefore, the official annual unemployment rate—which is actually the average monthly unemployment rate for the year—is much lower than the share of the workforce that experienced unemployment at some point during the year.


The average annual unemployment rate in 2013 was 7.4 percent, but we estimate that 12.7 percent of the workforce, or more than one of eight workers, was unemployed at some point in 2013. Given unemployment projections for 2014, it is likely that 11.3 percent of the workforce—more than one of nine workers—will be unemployed at some point this year.

It is important to keep in mind that aggregate labor-market measures mask enormous variation by race and ethnicity. For racial and ethnic minority workers, the employment situation is significantly worse than it is for white non-Hispanic workers.

The 2013 unemployment rate for Hispanics was 9.1 percent, significantly higher than the overall 2013 unemployment rate of 7.4 percent. An estimated 15.3 percent of Hispanic workers were unemployed at some point in 2013.


The 2013 unemployment rate for blacks was 13.1 percent, far higher than the highest overall annual unemployment rate over the last 70 years. An estimated 19.6 percent of black workers (nearly one in five) were unemployed at some point in 2013.

Given unemployment projections for 2014, it is likely that 13.6 percent of Hispanic workers and 17.4 percent of black workers will be unemployed at some point this year. The labor market is improving extremely slowly for all major groups, but the employment situation of African-Americans remains at something more akin to depression-level conditions.

In the current weak recovery, the lack of job opportunities means that more than 35.8 percent of the unemployed have been unemployed for more than six months, so many of the millions of workers who will be unemployed at some point this year can expect potentially ruinous, lengthy periods of unemployment. In December, the extensions of unemployment-insurance benefits passed by Congress during and in the aftermath of the Great Recession were allowed to expire. Allowing extensions to expire when the labor market is still so weak is unprecedented in the context of previous unemployment-insurance extensions in downturns prior to the Great Recession: The share of the workforce that is long-term unemployed is nearly twice as high today as it was in any other period when Congress allowed an extended benefits program to expire.

It is important to note that the root of today's weak labor market is weak aggregate demand—businesses have not seen demand for their goods and services pick up in a way that would require them to significantly increase hiring.


This means that the economy needs policies that will stimulate demand. In the current moment this can most reliably be accomplished through expansionary fiscal policy: large-scale ongoing public investments, the reestablishment of public services and public-sector employment cut in the Great Recession and its aftermath, and the reinstatement of federal unemployment-insurance benefits.


The Next America welcomes op-ed pieces that explore the political, economic and social impacts of the profound racial and cultural changes facing our nation, particularly relevant to education, economy, the workforce and health. Email us. Please follow us on Twitter and Facebook.

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