The unemployment rate among black Americans dropped to 6.8% on December, the lowest rate ever seen since the Bureau of Labor Statistics started keeping records in 1972, according to statistics released Friday by the Department of Labor.
The Bureau of Labor Statistics (BLS) has tracked the unemployment rate for black Americans at age 16 or older for the past 45 years and the rate has never fallen below 7% during that time period, however black unemployment is still significantly higher than other racial groups: whites had a 3.7 percent unemployment rate, while Asian American unemployment rate came in at 2.5 percent. Hispanic Americans had an unemployment rate of 4.9 percent.
In August, 2017 the unemployment rate among Black Americans had fallen one percent over the previous year from 8.4% to 7.4%, while the participation rate for black Americans rose one percent.
“Black Americans were one of the hardest hit groups during the Great Recession and throughout much of former President Barack Obama’s two-terms in office. The unemployment rate for this group was 13.7 when Obama took office in 2009, reaching a height of 16.8 in March 2010,” according to the Daily Caller.
That said, unemployment statistics are often misleading, as the official rate, “U3”, does not include; discouraged workers, marginally attached workers, or part-time employees for purely economic reasons. As of December, 2017 the broadest measure of unemployment, “U6” for all Americans was at 8.10%.
Due to the misleading statistics, lower unemployment can be attributed to fewer Americans looking for work (unemployed people who aren’t actively seeking a job are not counted as unemployed), while young Americans are also staying in school before entering the workforce.
Fox News provides a handy Q&A on black unemployment:
Q. Given the record-low unemployment rates, is this the best job market ever for blacks?
A. Not necessarily. As with nearly all demographic groups, a smaller proportion of blacks have jobs now than before the Great Recession, in part because of retirements, more people staying in school and discouraged would-be workers.
The best job market for African-Americans might actually have been in 2000, when 61.4 percent of black adults were employed, the highest proportion ever. That figure fell below 52 percent in the depths of the recession, and is now 57.9 percent.
The same pattern occurred for other groups. Two-thirds of Latinos were employed in 2000; now, only 62.5 percent are. About 65 percent of whites were working in 2000, far higher than the current 60.4 percent. (The data for Asians goes back only to 2003.)
Q. Why is the African-American unemployment rate higher than the rate for whites?
A. The main reason is discrimination, according to most research. Valerie Wilson, director of the Economic Policy Institute’s program on race, ethnicity and the economy, notes that even when African-Americans have similar levels of education or experience, their chances of being unemployed are higher.
“That’s what begs the question of what else could be the major reason,” Wilson said.
Nancy DiTomaso, a business professor at Rutgers University, says her research has found that whites likely benefit from networks of family and friends that don’t intentionally exclude blacks or other minorities. Yet, nevertheless, their networks have the effect of helping whites get jobs more readily than blacks.
Q. What about other ethnic and racial groups?
A. Everyone is benefiting from the healthy job market. The unemployment rate for Latinos was 4.9 percent in December, just above the record low of 4.8 percent reached in June.
And the jobless rate for Asians was 2.5 percent in December, just above the record low of 2.4 percent set in 2006.
Q. What factors have helped lower unemployment for African-Americans?
A. One major reason, Wilson says, is that many more black Americans are college graduates than in the past. That doesn’t completely offset the effects of discrimination. But among all groups, college graduates have lower unemployment rates than those with less education.
Another driver is economic: When the national unemployment rate falls to ultra-low levels, employers typically cast wider nets to find the workers they need. As they do so, they typically start pulling in more people from historically disadvantaged groups. These include job-seekers with less education as well as racial minorities.
With the current U.S. unemployment rate at a 17-year low of 4.1 percent, that appears to be what’s happening.
Some economists want the Federal Reserve to hold off on raising the short-term interest rate it controls for exactly this reason: Raising that rate could slow growth just as the benefits of the economy’s expansion are spreading to disadvantaged groups.
Q. Where might the unemployment rate for African-Americans go from here?
A. It depends on the economy. Most economists expect healthy growth this year, fueled in part by the Trump administration’s tax cuts for individuals and companies. That should lower unemployment for all Americans.
Typically, the African-American unemployment rate is about twice the rate for whites and is more volatile. Wilson calculates that for each percentage-point change in the rate for whites, up or down, the rate for African-Americans will swing by about 1.6 points.