Black Unemployment Levels Drop Dramatically — Because So Many Black Americans Are Leaving the Workforce

According to new data from the Department of Labor, unemployment levels for Black Americans dropped significantly in July — but the news isn’t as positive as it might sound on the surface.

Bloomberg’s Catarina Saraiva has reported that “the decrease came as workers left the labor force, an indication that the jobs recovery remains uneven.”

Citing figures from the U.S. Department of Labor released on Friday, August 6, Saraiva reported that “the jobless rate for Black Americans fell to 8.2%, the lowest level since March of 2020, and down from 9.2% in June [2021].”

But that’s where the good news stops. While Black people (Black men in particular) did experience a decline in unemployment, those gains weren’t the result of new jobs or an improving job market. Instead, those gains were a result of lower participation within the job market itself.

When a person decides to no longer participate in the job market — when they physically decide to stop looking for work — unemployment numbers go down. But while there may be fewer people physically looking for work, those individuals remain unemployed. Experts say this “drop” in unemployment paints a misleading picture, making the economy appear better than it actually is.

“Behind the lower rates is a drop in participation for both Black men and women, as well as Latina women aged 20 and over,” Saraiva reported. “Most other major groups, including White Americans of both sexes and Hispanic men, saw an increase in the ranks of workers last month.” 

According to the Federal Reserve, tracking unemployment levels and participation in the job market is one of the most important things to ensure the economy recovers from the COVID-19 pandemic. The agency said a “broad-based and inclusive” assessment of employment in the United States is paramount to evaluating how different demographics are rebounding — and how future job-stimulating policies get introduced.

To that end, Saraiva reported that “the unemployment gap between Whites and Blacks [has] narrowed, but rates for both Blacks and Hispanics remain above the national rate, which was 5.4% in July.”

Saraiva also noted that the unemployment rate for Asian Americans is below the national level, at 5.3%. According to demographics tracked by the U.S. Labor Department, although Asian joblessness (defined as without a job but actively looking for work) was the farthest from pre-pandemic rates, with the participation of Asian Americans ages 25 to 54 reaching a 12-year high in July, Pew reports that Asian Americans overall have the highest percentage of long-term unemployment since the pandemic.

According to Saraiva, one positive to take away from last month’s job report: “The unemployment rate [for women] fell to 5.2% from 5.7% as the number of women in the labor force increased modestly, and 649,000 more women became employed.”

But that doesn’t mean the so-called “she-cession” is over just yet.

“The female labor force is still down nearly 1.7 million workers since the start of the pandemic, compared to a shortfall of 1.4 million men,” Saraiva said.


Related: For more recent diversity and inclusion news, click here.