New Report Warns of Growing Race Gap In Employment

January 22, 2010

The Economic Policy Institute has issued what it rightly calls “grim 2010 projections” for the employment prospects of our nation’s racial minorities.

Here are some lowlights from the “downcast” forecast, along with some calculations by yours truly.

The overall unemployment rate is expected to peak at 10.7% in the third quarter of 2010. But for blacks, the projected rate is 17.2%. This is in part because minorities “began the recession in a recession,” with the black unemployment rate more than double the white unemployment rate–higher, in fact, than the current white rate.

In the third quarter of 2009, the white unemployment rate was at or below 9% in all but nine states. In the 18 states for which there are reliable data black unemployment rates were all double digit. By the projected 2010 peak, the black unemployment rate will be over 17% in 11 of these states and over 20% in five.

The race gap is writ large in the District of Columbia.

  • In the third quarter of 2009, the black unemployment rate was 11.9% higher than the white unemployment rate. This is larger than any of the reported state race gaps except South Carolina’s, which is a mere 0.1% higher.
  • By the 2010 peak, the white unemployment rate will have increased by 0.4% and the black unemployment rate by 1.3%–more than three times as much as the white rate.
  • The difference between the white and black rates will have grown to 12.8%–again greater than the difference in any state except South Carolina.
  • Yet the increase in the black unemployment rate since the recession set in will be just about at the median–another indicator that black unemployment in the District is a long-standing problem.

The EPI report is a call to action for a job creation strategy that targets states and populations with the severest employment problems. And, indeed, the race gaps it documents clearly show that we can’t count on a rising tide to lift all boats.

The administration and Congress are going to be under pressure to put as many people as possible back to work as soon as possible. But if they focus only on raw numbers, low-income minorities and their communities will again be left behind.

In December, the unemployment rate for adults over 25 without a high school diploma was more than three times greater than the rate for those with a bachelor’s degree or higher. For teens, the rate was 23.6% and for black teens an appalling 48.4%.

So there’s an urgent need to build education and training into job creation programs, including meaningful work-learning opportunities for low-income youth. And we need, at long last, to commit to resolving other problems underlying the employment race gap.

And what if we don’t? Well, according to EPI, the black child poverty rate will increase to more than 50%–more than half of all black children beginning life with two strikes against them. A recipe for millions more trapped on the bad side of the economic divide.


We Need Action On the Job Crisis Now

December 14, 2009

For months, President Obama has been preoccupied with Afghanistan, the climate change summit and getting a health care reform bill passed. The rest of the country has been saying, Do something about JOBS!

And with good reason. We’re told that the November unemployment figures are good news. But 15.4 million American workers are unemployed–over 38% of them for more than six months. An additional 10 million have given up looking for work or are working part-time because that’s the best they can do.

The situation is even worse for black and Hispanic workers. Unemployment rates for them are 15.6% and 12.7% respectively. The Economic Policy Institute says it expects 40% of them to be unemployed or under-employed at some point over the next year. Worst off are black teenagers, with an unemployment rate close to 50%.

The economy continues to shed jobs, though at a much lower rate than earlier this year. Looking at the Bureau of Labor Statistics’ latest job openings and labor turnover survey, EPI figures there were 6.3 job seekers for every job opening in October.

The ratio of seekers to jobs will grow unless something dramatic happens. Because it won’t be enough for employers to stop eliminating jobs. EPI says the labor market would have to grow by an average of 581,000 jobs a month to bring the unemployment rate back down to its pre-recession level.

Now the President has outlined a plan to jump-start job creation, using funds appropriated for the bank-bailout. I’m still chewing it over. So, I suspect, are members of Congress–except, of course, the House Republican leadership, which is dead set against more spending.

What Congress can–and should–do is act on the most urgent elements now. Otherwise, the extended unemployment insurance provisions in the economic stimulus package will expire–notwithstanding the recent legislation to extend them.

A new brief by the Center for American Progress Action Fund and the National Employment Law Project says that 1 million workers will lose job benefits in January unless Congress acts. By March, the number will have increased to 3.2 million. NELP has a customizable e-mail we can send to support the needed legislation.

Congress should also immediately extend the COBRA health insurance subsidies. Beneficiaries have already started losing these. Millions more could face a tripling of their premiums in the months to come.

A third priority are the stimulus provisions that have helped states balance their over-stressed budgets. An estimated 900,000 jobs will be lost unless Congress extends these ASAP.

More about them in another posting.


Prisoner Reentry Programs Need Improvement

September 8, 2009

I recently argued that our criminal justice system needs an overhaul. Our sentencing policies send far too many people to prison–and for too long. The exploding costs of maintaining such a system–totaling $44 billion in 2007–are eating away at state coffers.

Many states are reexamining their correction policies because of massive budget shortfalls. According to a recent report by the Vera Institute of Justice, at least 22 states have reduced their departments of corrections budgets.

Most of the savings will come from changes to sentencing policies and the early release of non-violent offenders. But unless reentry programs are improved, many of those released will likely be recommitted, which will undercut budget savings.

The Bureau of Justice Statistics conducted studies of prisoners released in 1983 and 1994. Both found that a whopping two-thirds of those released were back in prison within three years. There’s no evidence to suggest that this trend has changed.

The major reasons for recidivism are straightforward. Many ex-offenders face significant barriers to quality employment and unstable or nonexistent housing arrangements. They also suffer from a greater than average prevalence of severe mental disorders, chronic infectious diseases and substance abuse–and, at the same time, lack of access to health care.

Many prisoner reentry programs do not effectively address these problems. For example, the Urban Institute reports that among those in prison in 1997, approximately 40% had not completed high school or attained a GED. Nevertheless, less than half received educational or vocational training.

Not surprisingly, it’s extraordinarily difficult for these individuals to obtain employment upon release. Last month, the unemployment rate for Americans who were 25 and older and lacked a high school diploma was 15.6%. On top of that, survey data indicate that many employers are averse to hiring people with criminal histories, even if they are qualified for the available job.

These barriers to employment reduce public safety because ex-offenders who acquire and maintain employment are less likely to engage in drug dealing, violent crime and property crime.

Clearly, we need to do a better job of preparing prisoners to constructively reenter society. Fortunately, Dr. Bruce Western of Harvard University has an intriguing proposal for a national prisoner reentry program.

The core element would be up to a year of transitional employment for parolees. Prisoners would be prepared for such employment by achieving functional levels of literacy, job skills and job readiness prior to release. Those not enrolled in education programs would work in in-prison industries making products that could be used by state and local governments.

Transitional employment would be combined with transitional housing and substance abuse treatment. Western also proposes the adoption of less punitive parole policies and the elimination of bans on federal benefits for people with criminal records.

He estimates the total cost of his proposal to be about $8.5 billion per year. States could cover some of the costs with money that currently goes toward housing prisoners. But Western would also have federal funds distributed to states that adopted specified reentry standards.

He argues that the social benefits of adopting his proposal, e.g., increased economic productivity and reduced crime, would total about $10.8 billion per year.

I’m not ready to say Dr. Western’s proposal is the right one. But it certainly grapples with many of the difficult issues associated with recidivism.


Is Race Discrimination Just History?

August 3, 2009

The recent Supreme Court decision in the New Haven firefighters case has launched a spate of op-eds on affirmative action. Did the Court drive a stake in its heart? Does it really matter if it did?

Shelby Steele, a senior fellow at the right-leaning Hoover Institution, thinks no. The real problem today, he says, is “black underdevelopment,” not discrimination. True, some blacks still suffer from deprivations rooted in past discrimination, but “we also live in a society where race is no longer a significant barrier to advancement.”

Last month, the Center for American Progress co-hosted a panel discussion on black male unemployment. You’d think panelists were talking about a different world.

I was most struck by findings presented by Algernon Austin, Director of the Economic Policy Institute’s Program on Race, Ethnicity and the Economy. Happily, they’re summarized in an article that asks, “Why Is the Black Male Employment Rate So Low?”

The article presents research that contradicts common answers to this question. No:

  • It’s not that black men lack a work ethic because they wouldn’t be counted as unemployed unless they were actively seeking work.
  • It’s not that they reject jobs they think pay just “chump change” because, on average, the lowest wage they’ll accept is lower than the the average that’s acceptable to whites.
  • It’s not that they lack the skills employers are seeking because the greatest black-white employment gap is among high school dropouts, i.e., those competing for low-skill jobs.
  • It’s not that employers prefer the “soft skills” and cultural sophistication that people from well-off families tend to have because black teens from families earning $75,000 to $100,000 a year have a lower employment rate than poor white teens.
  • It’s not that black males don’t live where the jobs are because the difference in employment rates between black males in cities and suburbs is much greater than the difference for white males.

So, the argument goes, if it’s not any of these things, what’s left but race discrimination? It may, as Austin says, be subtle–even unconscious. But it’s no less a barrier to equal opportunity than the old in-your-face kind.

And if that’s so, then the “ultimate measure” of blacks equality with whites has to be something more than “parity in skills and individual competency,” Steele notwithstanding.


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