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April 4, 2015

Washington Update: Unemployment Rate for African Americans Is Higher Than Prerecession Levels In 28 States

By Lecia Imbery

For many, 2014 was a good year to get a job. By December 2014, the unemployment rate had fallen to 5.6 percent, the lowest it had been since June 2008. Nearly 250,000 jobs were being added every month. The gains in job growth were especially important for African Americans, who had the largest increase in the share of adults and with job, according to a new paper from Valerie Wilson at the Economic Policy Institute (EPI).

Despite these gains, however, the unemployment rate for black workers (10.4 percent in Feb. 2015) is nearly double the national unemployment rate (5.5 percent) and more than double the unemployment rate for white workers (5.1 percent). Another paper released last week by Wilson and EPI shows that black unemployment levels are higher than pre-recession levels in at least 28 states. In fact, the unemployment rate for black workers was 11 percent at the end of 2014 – higher than the national unemployment rate at the height of the recession and 2.4 percentage points higher than the black unemployment rate before the recession. This great graphic shows the huge differences in unemployment rates between whites and blacks by state.

I heard Wilson speak on Monday at an event on full employment hosted by the Center on Budget and Policy Priorities (you can watch the event, which features former Federal Reserve Bank Chair Ben Bernanke, as well as other great speakers, here). At the event, she talked about why full employment is a better destination for our economy, especially for African Americans, than full recovery: full recovery would be getting us back to pre-recession levels, but full employment would be going further, where everyone who wanted to work could find a job. The closer we get to full employment, the more income and quality of life goes up for those near the bottom of the economic ladder.

All of the speakers, including Ben Bernanke, agreed that getting to full employment could not be achieved by the Federal Reserve alone. The economy needs direct federal spending to create jobs. Both of these papers show the continued need for policies and investments in programs that create jobs, as well as investments in programs that help the unemployed and underemployed until those jobs are available. The Congressional Progressive Caucus budget, House Budget Committee Democrats’ budget, and the Congressional Black Caucus budget would accomplish these goals. On the other hand, the budget resolutions passed by the House and Senate would get 69 percent of cuts from programs for people with low or moderate incomes without the job-creating measures included in the alternative budgets mentioned above. In short, the House and Senate budgets would increase poverty and inequality.

When Congress comes back to DC in mid-April, they’ll work on coming up with a compromise between the two chambers’ budget plans, and there are many more steps before specific cuts would be enacted. Help us stop these cuts and implement programs that move us towards full employment by sharing in the comment space below examples of the ways lives are changed for the better by federal programs in your community. Or, if you work for a service provider agency, please share data or anecdotes about the effectiveness of programs.

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