COVID Turned African American Employment Upside Down


Black Unemployment has jumped from 5.8 % in February to 16.8% in May.

As 2019 marked a decade-long economic expansion, African Americans were enjoying the record high employment rate and economic stability, until the coronavirus pandemic and shutdown turned their worlds upside down, reported by The Wall Street Journal.

“It was like everything was falling into place, and now it’s all paused,” Anthony Steward said. He cooked at Fiserv Forum, home stadium of Milwaukee Bucks at an hourly wage, but now he is among the many laid off in the food-service industry.

In February, the black unemployment rate was at 5.8 percent, almost the lowest of the records since 1972. But now, the number skyrocketed to 16.8 percent in May, the Labor Department released.

Unemployment numbers have been historically higher in the black community. For the black community, the unemployment rate reached 10 percent from September 1972 through November 1994, and also from July 2008 to February 2015. The highest was during the last recession at 16.8 percent, similar to the number in May.

In a better economy, the racial gap in employment was less of an issue. In August 2019, when the black unemployment rate was at its lowest of 5.4 percent, it was just 2 percent above the rate for white workers. As 3.5 million African Americans lost their jobs in March and April, they saw less of a bounce back in May compared to whites and Hispanics. While the private sector had more employees resuming jobs in May, Valerie Wilson, an economist at the left-leaning Economic Policy Institute noted that the public sector, municipal governments and school systems who are large employers of African Americans, cut thousands of jobs.

Even before the pandemic with a record low unemployment rate, African American families still weren’t financially well prepared for a public health crisis. The Federal Reserve released data showing that African American families’ median net worth was $17,600 in 2016, compared to white families’ $171,000 median.

The black community has severely fallen victim to the coronavirus disease, as most of the African Americans lived in dense urban areas and had jobs that cannot be done from home. More than 20,000 African Americans have died from COVID-19 infection, making up 23 percent of total deaths in the country, while African Americans only represent 12.5 percent of the domestic population, according to the National Center for Health Statistics.

Racial disparities in the U.S. had “formed a powder keg that exploded over the past few years,” said Andre. Perry, a scholar at the Brookings Institution. “The property damage and the wealth losses created by structural racism in housing, education and health care has caused more damage than any riot could possibly cause.”

See the full report here.


Economics, Finance and Investing