To be a poor man is hard, but to be a poor race

in a land of dollars is the very bottom of hardships.

W.E.B. Du Bois

Unemployment and Race: It Matters©

Mark Monroe

February 28, 2010: Updated August 27, 2010

              There is little debate that in the first seven (7) months of 2010 this country is still in the grips of a recession.  As such, any report by the government that will potentially affect the checkbook of individuals becomes newsworthy.  However, the news rarely presents a complete story. This article is about how the absence of information in a recent news story on the economy, skews how the data is received.

        The following is the opening line from a February 5, 2010, Associated Press (AP) article offering a little bit of hope for the economy. “The outlook for jobs became a bit less bleak with January's unexpected decline in the unemployment rate, which fell to 9.7% from 10%.”[1] (Figure 1)[2] While the drop in unemployment is a positive, the article goes on to say, “But those gains resulted from seasonal adjustments to the data. Without those adjustments, the data show fewer people had jobs last month.”[3]  At the end of July 2010, the seasonally adjusted rate was 8.8%.  There is a little confusion whether or not there is any improvement in the economy, based on how the numbers are counted.  One set, seasonally adjusted shows an improvement, while the non-adjusted figures do not.  In addition, who is counted as unemployed, affects the overall presentation of the data.  Just because a person is an adult and out of work does not mean that they are automatically counted.  The Department of Labor (DOL) has specific definition, “People are classified as unemployed if they meet all of the following criteria: they had no employment during the reference week; they were available for work at that time; and they made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons laid off from a job and expecting recall need not be looking for work to be counted as unemployed.”[4]  Left out of the over all statistics are people who are institutionalized and people unable or unwilling to look for work.  

 

 Even with all the confusing data, it is safe to say the unemployment situation, even with the reported improvement, is still a problem.  On average, the unemployment rate was steadily increasing from December 2007 to December 2009, with a slight decrease starting in January 2010. (Figure 1)  When the government announces the rate for the whole country, it appears as if we are all feeling the pain of these economic times.  When it was revealed that there was a drop, the appearance was that it dropped for everyone.  Has the impact of the recession been truly felt equally for all Americans?

 

 Figure 2[5] shows the comparative unemployment rate[6] between Whites[7] and Blacks[8] since December 2007.  It should be noted at the beginning of this period the difference between White females (lowest unemployment rate) and Black males (highest unemployment rate) was 4%.  With the numbers release by the Department of Labor on February 4, 2010, that gap reached its peak at 10.8%.  The gap has closely slightly to a difference of 9.6%.  The unemployment rate, on average, decreased between December 2009 and July 2010, for the nation as a whole, which is a good thing, however at the same time it increased for Black males and females.  The only conclusion that a person can draw from these numbers is that the recession and the lack of employment has hit Black males harder then White males, White females or Black Females.    

 If the claim is that Black males are significantly impacted as compared to their White counter parts, then the next step is to see how they compare against other groups.  For example, Hispanics[9] from December 2008 to July 2010 the unemployment rate rose from 9.9% to 12.1%, with a peak at 13.1% in October 2009.  But even at 12.1%, they are 4.6% below that of Black males.  Evan when the rate is compared with the non-seasonally adjusted[10] number for male foreign-born workers, which is 9.5%, Black males are still 5.2% higher.[11]  Again, these numbers do not say anything except that Black males are significantly impacted by the current employment situation.  The numbers may indicate there is a disparity, but they do not show why it exists.

 

      One possible source for an answer is to review the educational attainment statistics in relation to the unemployment rate.  Figure 3 shows, that on average, the higher a person’s educational level is, the lower the unemployment rate is.  This intuitively makes sense; the reason that many people continue with the educational process is to improve their marketability.  The July 2010 numbers show that the unemployment rate for a person without a high school education is 9.3%[12] higher than a person with a four-year degree or higher.  If we break this statistic further down by race, we find another phenomenon is revealed.  The information in Figure 3 would suggest that educational attainment is an important factor in gaining and retaining employment.  However, the information provided in Figure 4 would suggest something else is in play in the job market.  According to the data, the unemployment rate for Blacks with a two (2) year degree is higher than it is for Whites with just a High School Diploma and the same disparity holds true for Blacks with a four (4) year or higher degree.  Their unemployment rate is higher than it is for Whites with just a two (2) year degree.   Suggesting that race does play a significant factor in employment opportunities in this country.

      

 While the employment statistics for Blacks are appalling, there is another group that is in worse shape.   For the employment statistics that were just presented, the information for Whites, Blacks, Asians[13] is easily accessible.  A review of the data presented on the DOL’s web site will reveal that only three (3) races are routinely reported.  What is hard to find is any information on the indigenous population of America.  Admittedly, the Bureau of Labor Statistics (BLS) and the DOL, in an effort to comply with the 2000 Census data does not routinely report data on some racial groups.  “To accommodate the new guidelines, the race categories that now appear in Bureau of Labor Statistics (BLS) publications are white (and no other race), black or African American (and no other race), and Asian (and no other race). The number of respondents in the remaining categories—American Indian or Alaska Native, Native Hawaiian or Other Pacific Islanders, and persons who selected more than one race category—was determined to be too small to develop employment and unemployment estimates of sufficient reliability for monthly publication.”[14][15][16]  Going to the DOL or the BLS web sites it is a challenge to find any relevant employment information on these groups. 

 

      The next couple of paragraphs are going to focus on the data that is available for American Indians because the employment picture appears to be bleaker, that is even with the difficulty of finding the available data.   The primary source of employment information for this group is supposed to be the Bureau of Indian Affairs (BIA).  While the BIA has a fixed reporting requirement governed by “Public Law 102-477, the Indian Employment, Training, and Related Services Demonstration Act of 1992, mandates that the Bureau of Indian Affairs (BIA) publish, not less than biennially, a report on the American Indian and Alaska Native population who are eligible services provided by the Secretary of the Interior to American Indian and Alaska Native People.”[17]  But even with this requirement, the last published report was release in 2005.  Therefore, the data available from the BIA for review is five (5) years old.  No one demographic group’s employment situation has improved in the last five (5) years, so this article is going to assume that the same holds true for the American Indian population.  

       Counting American Indian unemployment becomes difficult based on a number of factors.  Estimates at the start of 2009, based on report published by data Economic Policy Institute (EPI), have the rate at 13.9%[18] while the BIA reported in 2005 the unemployment rate at 49%.  The EPI report is basing its information on the data it was able to uncover from the BLS.  In a Democratic Policy Committee press release on February 19, 2009, Senator Byron Dorgan (D-ND), chairman of the Senate Committee on Indian Affairs[19] (SCIA), stated that the average unemployment rate for Tribal communities is roughly 50%.  Even with the difference in timing, it is easy to see that the number differs greatly between the BLS, BIA and the SCIA.  This is due in part to the methodology used by the agencies.  The BIA is looking at the population near or on the various reservations across the country.  The BLS is looking at unemployment figures for the country as a whole.   But that does not adequately explain a 36% disparity in reporting.  The major disparity comes from who the BLS considers in its figure, there is a significant segment of the American Indian population who are unemployed, but do not fit into the BLS definition, and therefore not counted.      

       Regardless of the data source, the data consistently shows that the recession has hit three demographic groups harder than the rest of the country.  The report published by EPI, describes the disparity, “American Indians, like Hispanic Americans and African Americans, have had the misfortune of experiencing double-digit unemployment rates for most or all of 2009.  In the first half of this year, the American Indian unemployment rate averaged 13.6%. This rate is up from 7.8% in the last half of 2007, and it is 5.4 percentage points higher than the comparable 2009 white rate. All groups are being hurt by the Great Recession, but the pain is more severe in communities of color.”[20]  The author is clearly stating what many people have suspected or known, race still plays a major role in employment decisions in this country.  Roughly, 150 years after the Civil War, and 130 years after the Indian Wars, skin color determines a person’s worth.

       How people approach the information that has been presented will depend greatly on their current economic status.  If the reader of this article is a White male, that happens to be in the 9.1% that is unemployed, they may be aware that unemployment affects other racial groups more, but that will not be their first concern.  Usually the first concern will be finding work to sustain themselves and their family.  But as a nation, we have a responsibility and a vested interest in reducing the unemployment rate for all people of this country.  To barrow a phrase from Jean-Jacques Rousseau there is a social contract that exists between the citizens and the government.  Loosely translated the contract requires/mandates mutual support of the citizens.  Rousseau describes the purpose of the contract was to, "Find a form of association which defends and protects with all common forces the person and goods of each associate, and by means of which each one, while uniting himself with all, may still obey himself alone, and remain as free as before."[21]  The only way to achieve this balance and cooperation is if the society provides for the security for all its citizens.  Security, in the context of this article, is economic security.  Deny a significant segment of the citizenry access to gainful employment and there will be a decay of the society.   This decay will be caused in part by the strain on public programs and the disillusionment of the citizens towards their society.  

       Senator Jesse Jackson Jr., when he was speaking to the issue of reparations for slavery, hit the nail on the head when it comes to economic stability of Americans.   "We should provide a full employment economy with jobs for ALL Americans, create a health care system that provides comprehensive and universal health care for ALL Americans, create a mixed economy that provides affordable housing for ALL Americans, invest in a public school system that provides a quality and multicultural education for ALL Americans, not just something for African Americans."[22]  According Senator Jackson, providing viable employment opportunities for all will help resolve many race related issues in this country.   But this can only be achieved if the effects of the recession are equally distributed.  Make the 9.7% apply to all working demographic groups.

       Over two hundred years ago, Adam Smith clearly outlined the importance of labor to the wealth of a nation. “The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.”[23]  Labor, the production of goods and services, is vital for the economic recovery for this country.   It is through employment that good and services are produced, but the workers have the income to purchase the items created. 

       Talking about the recession the economist Robert Heilbroner wrote, “National flood of income was indubitably imposing in its bulk, but when one followed its course into the millions of terminal rivulets, it was apparent that the nation as a whole benefited very unevenly from its flow.  Some 24,000 families at the apex of the social pyramid received a stream of income three times as large as 6 million families squashed at the bottom.”[24]  According to Heilbroner, the wealth of this nation is squarely in the hands of a few individuals.  He later explains how unemployment starts to influence the economy.  “It was employment that was the hardest to bear.  The jobless millions were like an embolism in the nation’s vital circulation; and while the indisputable existence argued more forcibly than any text that something was wrong with the system, the economist wrung their hands and racked their brains and called upon the spirit of Adam Smith, but could offer neither diagnosis nor remedy.  Unemployment—this kind of unemployment—was simply not listed among the possible ills of the system; it was absurd, unreasonable, and therefore impossible.”[25]  What is interesting is that he was not writing about the economic recession of 2010, he was writing about the recession of 1920’s.  Almost 100 years separate these two economic events, yet the particulars surrounding it are the same.  The poorest section of the population takes on the brunt of a down economy. 

       Putting as many people to work is essential to recovery because high unemployment rates are expense to a society to maintain.  This is simply Economics 101 high unemployment causes:

1. An increase use of unemployment benefits

2. Increase use of social services

3. Increase in the default rate of loans

4. Increase in criminal rate

5. Decrease in productivity

6. Increase in health issues

7. Decreased revenue from taxes

       This list is by no means complete.  Nevertheless, it does give an insight into the fiscal impact the recession has on people and industry.  Given our historical background of keeping African Americans, American Indians, and Hispanics at an economic disadvantage, why should people of color be included in the initial recovery?   One of the arguments is that it is the “right” thing to do, based on the theological and mythological foundation of equality that this nation claims to be based on.  The myth is “Liberty and Justice For All”.  Justice is not just limited to the legal system.  People are entitled to economic justice as well.  

       From an economic standpoint this also makes sense, as I just said unemployment is expensive.   The country needs the economic buying power that these groups can bring to the table, if fully employed, is in the billions.

    However, it takes more than just a job to create economic success; the citizens need to believe that the national interest supports them as well.  Along with employment, there are four (4) other pillars support a society. (Figure 5)  These pillars include housing[26], education, healthcare, and the means to have a sense of identity and self worth. If any groups feels that they are not supported then it is hard for them to give support back.  The statement by John F. Kennedy, “And so, my fellow Americans: ask not what your country can do for you—ask what you can do for your country.”[27]  Is something that you can ask of a people who have been supported by their government, it is not something you can ask of a people that have not.    

  

There are three (3) points that the reader should pull form this article.

1.  Assumptions that are made from just on (1) data are rarely complete.

2. Race does play a role in employment decision.

3. It is in the best interest of this country to keep its population employed. 

© August 2010 All Rights Reserved

 

1. Drop in jobless rate points to modest improvement. http://news.yahoo.com/s/ap/20100205/ap_on_bi_go_ec_fi/us_economy. Accessed February 6, 2010

2. http://www.bls.gov/cps/#data access August 27, 2010

3. IBID

4. Employment Situation Technical Notes www.dol.gov

5. Source Table A-2. http://www.bls.gov/news.release/empsit.t04.htm. Accessed August 27, 2010

6. The unemployment rate is a percentage of those in the labor force who are unemployed.

7. White is defined as a person having origins in any of the original peoples of Europe, the Middle East, or North Africa.

8. Black is defined as a person having origins in any of the black racial groups of Africa.

9. Hispanic is defined as a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race.

10. Which should be higher then seasonal adjusted numbers

11. Foreign born male employees unemployment rate for January 2010 was 12.7% source table  A-7 

12 Source Table A-4 http://www.bls.gov/news.release/empsit.t04.htm accessed August 27, 2010

13. Asian is defined as a person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian Subcontinent, including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.

14.  Mary Bowler, Randy E. Ilg, Stephen Miller, Ed Robison, and Anne Polivka. Revisions to the Current Population Survey Effective in January 2003. http://www.bls.gov/cps/rvcps03.pdf.  Accessed February 8, 2010

15. Native American is defined as a person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment.

16. A Native Hawaiian or Other Pacific Islander is defined as a person having origins in any of the peoples of Hawaii, Guam, Samoa, or other Pacific Islands.

17. 2005 American Indian Population and Labor Force Report. http://www.bia.gov/idc/groups/public/documents/text/idc-001719.pdf. Access February 9, 2010

18. Austin, Algernon. American Indians and the Great Recession: Economic Disparities Growing Larger. http://epi.3cdn.net/1aaad254862c0b29b6_2em6bnkyh.pdf  Access February 8, 2010

19. I am willing to bet that most people did not know that the BIA or the SCIA even existed.

20. Austin, Algernon. American Indians and the Great Recession: Economic Disparities Growing Larger. http://epi.3cdn.net/1aaad254862c0b29b6_2em6bnkyh.pdf  Access February 8, 2010

21. Rousseau, Jean-Jacques.  The Basic Political Writings. On The Social Contract. Book I Chapter VI. Translated Donald Cress. Hackett Publishing Company, Indianapolis/Cambridge 1987. Page 148

22. An Apology For Slavery? Contrition Carries Conditions. Jackson, Jesse Jr. June 17, 1997. http://www.jessejacksonjr.org/

23. Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Penguin Books. 1986. 104

24. Heilbroner, Robert. The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers. Simon & Schuster. p 250

25. IBID p 252

26. Housing represents more than just the physical structure; it also includes food, utilities, clothing and necessities. 

27. John F. Kennedy Inaugural Address Friday, January 20, 1961