Black Unemployment Rate Hits Record Low of 5%

Black Unemployment Rate Hits Record Low of 5%

Black unemployment

A hiring sign is displayed at a restaurant in Prospect Heights, Ill., April 4, 2023. (AP Photo/Nam Y. Huh)

The Black unemployment rate sank to a record low in March, with Black workers seeing a first-ever labor force participation rate higher than whites. However, a recession could reverse the gains for Black workers who have historically been disproportionately impacted during economic downturns.

The gap between the Black and white unemployment rate is a benchmark of inequality in the labor market, Bloomberg reported. Black unemployment weighed in at 5 percent in March, down from 5.7 percent in February, to hit the lowest level since data started being collected in the early 1970s, but it’s still 1.8 percent higher than the 3.2 percent rate for white Americans.

“This is a victory,” said Howard University Professor William Spriggs, chief economist for the AFL-CIO. “It’s not only that Black unemployment is low. It’s also that, for the first time, a higher share of Black people are working than white people.”

Three years ago, Black unemployment was at a pandemic high of 16.8 percent, compared to record white unemployment of 14.1 percent.

In March, the Black labor force participation rate of 64.1 percent was nearly two percent higher than that of white workers.

Black men have historically experienced the lowest labor force participation rate compared to white and Hispanic men. By contrast, a higher share of Black women tend to work than white or Hispanic women.

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The number of employed Black Americans has risen fast for five straight months as some of the most sidelined workers get hired in the tight job market, Bloomberg reported. While many employers still report difficulty finding workers, there are some signs the labor market is cooling. Job openings in February fell to the lowest since May 2021 and layoffs are in full swing.

The rise in Black employment reflects key pandemic-era changes in the labor market, Washington Post reported. Black workers have an outsize presence in service-sector jobs that recently experienced large gains. Health care, social assistance programs, restaurants and bars, and the government, which all hire Black workers disproportionately, each added 50,000 new jobs in March, according to the Bureau of Labor Statistics.

Most policymakers and economists expect the U.S. labor market to begin cooling as higher interest rates jeopardize those historic gains. Federal Reserve Chairman Jerome Powell has been accused of trying to slow hiring that would put historically vulnerable people, especially Black people, at the greatest risk of job losses.

That hasn’t happened yet. March data shows that the Black employment gains were led by Black women, for whom joblessness fell to a record low 4.2 percent. The unemployment rate for Black men rose from 5.1 percent in February to 5.2 percent in March.

Experts cite remote work as a reason for increased Black employment. Companies that embraced remote work during the pandemic were often better positioned to boost the number of Black and minority workers in their workforces. Remote work allowed those companies — including many of the well-paying tech giants — to recruit outside their home base, getting access to more potential candidates. Research suggests that working from home is particularly attractive for Black employees, workers of color and working mothers, Washington Post reported.