Black unemployment rate falls to 11.9 percent

21st January 2014   ·   0 Comments

By Freddie Allen
NNPA Washington Correspondent

(NNPA) – The unemployment rate for Blacks dipped to 11.9 percent in December, according to the Labor Department, largely because likely workers, discouraged after months of searching for jobs with little prospects, have simply stop­ped looking.

According to the Labor Depart­ment, the unemployment rate for Black men over 20 dipped from 12.1 percent in November to 11.5 percent in December and the jobless rate for Caucasian men fell at half that rate, from 5.9 percent in Nov­ember to 5.6 percent in December. The unemployment rate for Black women over 20 was 11.1 percent in November and 10.4 percent in December.

The unemployment rate for Caucasian women over 20 remained flat from November to December at 5.3 percent, the lowest rate for all adult worker groups.

“The unemployment rate gave a false impression,” said Valerie Wilson, an economist and vice president of research at the National Urban League Policy Institute. “People have left the labor force.”

Steven Pitts, economist at the Labor Center at the University of California at Berkeley, Calif., agrees.

“A good portion of the drop in the unemployment rate came from people dropping out of the labor force,” he said.

The labor force participation rate, the measure of workers who are employed and actively looking for work, was 62.8 percent in December, the lowest rate since 1978.

Considered a more accurate barometer of the workforce than the unemployment rate, the participation rate for Blacks was 60.5 percent in November and 60.2 percent in December compared to Caucasians who also experienced a decline from 63.2 percent in November to 63 percent in December. The economy shed more than 300,000 workers in December and only added 74,000 jobs.

December’s jobs report comes on the heels of back-to-back months that added more than 200,000 jobs to the economy.

“This report is disappointing,” said Wilson. “There were a lot of expectations that things would continue on this level.”

The average unemployment rate for Blacks was 13.8 percent in 2012 and decreased to 13.1 percent in 2013. The average jobless rate for Caucasians was 7.2 percent in 2012 and 6.5 percent in 2013.

The average participation rate for Blacks was 62.6 percent in 2012 declining to 61.2 percent in 2013. The participation rate for Caucasians fell from 64 percent in 2012 to 63.5 percent in 2013.

“In December there were 20.6 million workers who were either unemployed or underemployed (10.4 million officially unemployed, 7.8 million involuntary part-time workers, and 2.5 million marginally attached),” wrote Heidi Shierholz, an economist at the Economic Policy Institute. “Racial and ethnic minorities have been particularly hard-hit by underemployment.”

According to EPI, the underemployment rate for Blacks was 21 percent and the underemployment rate for Caucasians was 11 percent.

Not only do Blacks suffer disproportionate rates of underemployment, long-term unemployment, due to a number of factors including discrimination in hiring practices, continues to plague the Black community.

“The biggest challenge besides the labor force participation rate is long-term unemployment that affects African Americans disproportionately,” said Wilson. She said, “It was very short-sighted of Congress to allow unemployment compensation to expire.”

Shortly after Christmas, Con­gress let the benefits expire for 1.3 million Americans. According to the Center on Budget and Policy Priorities, if Congress fails to reach a deal to extend Emergency Unemployment Compensation (EUC) program, almost 5 million jobless workers will lose that economic lifeline by the end of the year.

Some critics of the EUC program argue that it encourages dependence on the government and that workers lack the skills required for available jobs, which increases the unemployment rate.

Shierholz countered that in today’s economy the “lack of demand for goods and services makes it unnecessary for employers to significantly ramp up hiring”

Wilson agreed.

“In order for people to get hired, demand has to increase,” said Wilson. “If people have jobs they will spend more money.”

This article originally published in the January 20, 2014 print edition of The Louisiana Weekly newspaper.