A close look at recent increases in the black unemployment rate

Elise Gould

Elise Gould Senior Economist, EPI

Everything from weather to furloughs made it hard to draw any major conclusions from this month’s employment report, but one recent worrisome trend persisted—a continued increase in unemployment for black workers.

The Labor Department’s February employment report showed job growth effectively stalled last month, rising just 20,000. That was much lower than anticipated and substantially weaker than the prevailing trend of the last few years. The average over the last three months came in at a more solid 186,000, likely a better reflection of underlying trends, given the unusually harsh weather in February. At the same time, wages grew 3.4 percent over the year, the highest so far in the economic recovery from the Great Recession.

Turning to the separate household survey, the unemployment rate ticked down to 3.8 percent, while the labor force participation rate and the employment-to-population ratio (EPOP) held steady. The overall unemployment rate has sat at or below 4.0 percent for the last 12 months, averaging 3.9 percent over the year. The black unemployment rate, on the other hand, averaged 6.4 percent over the last year and has been increasing in recent months. For comparison, white unemployment tracked the drop in overall unemployment in February and has averaged 3.4 percent over the last year.

Given relatively small sample sizes and data volatility, I try to not to make a huge deal about any month-to-month trend. So, when the black unemployment rate started rising in December 2018, there was a good chance it was a blip. That so-called blip has happened for three months in a row. Black unemployment hit a low of 5.9 percent in this business cycle back in May 2018 and has exhibited relatively normal fluctuations in the ensuing months. It rose from 6.0 percent in November to 6.6 percent in December, then again to 6.8 percent in January and 7.0 percent in February. The black unemployment rate hasn’t been above 7.0 percent in over a year. Because of the volatility and concerns about monthly data reliability, the figure below smooths out the black and white unemployment rates, graphing both the monthly data (in light blue and green, respectively) as well as a three-month moving average (in dark blue and green, respectively). The three-month moving average is in a darker shade because that’s what I think is the underlying trend and what we should focus on.

Over the last three months, black unemployment averaged 6.8 percent, up from 6.1 percent the prior three months. This significant uptick is concerning. It does appear that the labor force participation rate ticked up slightly between the prior three months and the most recent three months (62.3 percent to 62.5 percent). Taken on its own, this is a sign that black workers may be (re)entering the labor force in the hopes of finding jobs. But, at the same time, the black employment-to-population ratio fell twice as far over the same comparison period. The black EPOP averaged 58.2 percent the last three months, down from 58.6 percent the prior three months.

The rise in black unemployment did not happen at a time when white unemployment also increased sharply. Over the last three months, white unemployment averaged 3.4 percent, exactly half as much as the black unemployment rate (6.8 percent), and only ticked up slightly over the previous three months (from 3.3 percent). As the economy continues to move towards full employment we would expect there to be some closing of the black–white unemployment gap, so the recent trend is troubling.

We cannot definitively say this is a trend that is going to continue, but it is certainly an indicator to watch in coming months. That’s especially true given widening wage gaps between black and white workers in recent years.

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Reposted from EPI

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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