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Fixing Black America’s Crisis in Unemployment

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At first glance, the federal Department of Labor’s monthly report released August 1 seemed to contain good news: the unemployment rate fell from 6.4 percent in June to 6.2 percent in July.

But the seeming good news was a mirage: the decline stemmed from the fact that nearly half a million jobless workers who had been looking for work stopped their search entirely, and so, weren’t counted as being in the labor force at all.

In other words, the unemployment rate improved statistically only because the number of people looking for jobs fell faster than the number of people holding jobs.

That destroys whatever good one might have found in the unemployment rate for Blacks dropping to 11.1 percent in July, from June’s 11.8 percent; and to 8.2 percent for Hispanics, from June’s 8.4 percent. The unemployment rate for both months for Whites remained stable at 5.5 percent.

There’s little question that the fresh statistics on the unemployment situation are dispiriting. More than 9 million Americans are out of work. Nearly 1.6 million have been jobless so long they’ve exhausted their 26-week unemployment benefits; and another million or so are close to that economic precipice.

Moreover, economists and other observers of the labor market say the immediate prospects for getting some significant number of these Americans back to work are not promising.

That’s because while that measurement of economic health called productivity—which is the amount of goods and services produced for each hour workers work—is increasing, the overall economy isn’t growing fast enough to spur businesses to hire workers
Instead, they’re continuing to lay workers off.

That’s the harsh reality behind the necessarily abstract, numbers-filled federal report.

One economist summed up his feeling about the monthly labor market indicators for the New York Times with the words, “Except for the rise in temporary workers, there was nothing good in this report.”

That summary aptly describes the situation facing the African-American jobless who are being the most severely buffeted by the “equality gap” that separates all African Americans from the American mainstream.

Since the recession hit in early 2001, and since it officially ended in late 2001, the Black unemployment rate has returned to its historic “twice-as-great-as-Whites” ratio (and the Hispanic-White rate has also returned to its historic ratio as well).

The long economic boom of the 1990s destroyed the old shibboleths that the ratio stemmed from poor Blacks not wanting to start at the bottom of the job ladder and work their way up. Late in the decade, when the fruits of the boom finally forced the creation of millions of jobs in the low-wage service sector, poor Blacks mounted a “jobs rush” that drove the Black unemployment rate to an all-time low of 7.2 percent in 1999.

Now, evidence is accumulating that African Americans are suffering disproportionately from the economy-wide falloff in jobs.

It includes a recent study of New York City’s economy over the last decade which found that while Black males made the smallest gains of all groups in job-holding during the 1990s, they’ve experienced the biggest percentage drop in job-holding since 2000.

In addition, a recent report in the Times found that nationally Black unemployment is increasing faster than at any time since the 1970s and that the losses have been largely in manufacturing, where the pay for Blacks has been historically higher than in many other fields.

The Black unemployment situation amounts to a crisis within the overall national unemployment crisis, and it demands concerted action. The high rate of Black unemployment from the 1970s to the 1990s produced many severe problems that bedeviled not just Black America, but America as a whole.

Can the American society of this more economically challenged, and politically anxious, world withstand a return to sharply disproportionate unemployment ratios for African Americans and Hispanic Americans?

The National Urban League emphatically says no.

At our annual conference in Pittsburgh last week, I pledged that the League would soon convene a “Commission on Jobs and the Urban Economy” to develop a new economic plan for the nation’s cities, where the large majority of African Americans live.

We’ll consider five specific areas: closing the skills gap; energizing African-American business development and entrepreneurship; persuading major corporations to invest more in more urban communities and inner city neighborhoods; directing public and private investment through tax and fiscal policies to repair the crumbling infrastructure of our cities; and making home ownership more affordable and available for all Americans.

And we intend to produce specific proposals for action.

Unfortunately, they won’t answer the immediate need of those currently out of work for jobs.

But we’ll work as hard as we can to ensure that in the future no analyst will feel the need to describe a federal report on unemployment by saying “there was nothing good in this report.”

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