The U.S. economy buffeted by yesterday’s storms seem to have made it safely, if not completely, free from the damages of The Great Recession. The recent meeting of the Federal Open Markets Committee also gave credence not only to the dovish approach of Fed Chair Janet Yellen, but also the quiet confidence in a moderate growth for the job market. She noted that “economic activity has been rising moderately so far this year. Job gains have been solid, on average, since the beginning of the year, and the unemployment rate has declined.”
There were 222,000 jobs added in June, supporting Yellen’s cautious optimism.
This of course, is welcome news and is supported by the June 4.4 unemployment rate despite the overall weak labor force participation rate of 62.8 percent, that was little changed from the previous month, as was the involuntary part-time workers -- those working part-time but would prefer full-time, as was discouraged workers at 514,000.
What did change? The gap between black and white workers, for the first time since April 2000 came in at 7.1 percent, and 1.5 percent points down from a year ago, the smallest gap, on record, between black and white Americans.
"This trend is exactly what we want to see" as the economy gets closer to full employment, said Elise Gould, a senior economist at the Economic Policy Institute. The rebound in available jobs after the recession has attracted millions of Americans back into the labor force. With the unemployment rate back at a post-recession low, the economy is nearer to the theoretical level of full employment, at which everyone who wants a job and can work is employed,” reported Business Insider.
Despite the good news, the historical lag between the two groups is still present. And according to the Bureau of Labor and Statistics is 7.2 percent, with whites at 4.0.
It’s been well established that income inequality has never been greater than it is, and the figures for black unemployment are part of that conversation. In December of last year, it was noted by many that Illinois -- the Land of Lincoln - held the nation’s highest black unemployment, in the nation, at 15 percent, according to the Economic Policy Institute, which, a year ago showed that “Nationally, African Americans had the highest unemployment rate in June, at 8.6 percent, followed by Latinos (5.8 percent), whites (4.4 percent), and Asians (3.5 percent).”
For 2016, there were some surprises, and for the “second quarter of 2016, the African American unemployment rate was lowest in Texas (6.1 percent) . . . since the fourth quarter of 2015, the black unemployment rate in Illinois has risen 1.9 percentage points as unemployment has increased 0.7 percentage points statewide.”
“Seventeen states had African American unemployment rates below 10 percent in the second quarter of 2016—in 13 of these states, the rate was equal to or lower than the second quarter national average for African Americans (8.5 percent),” noted the EPI.
Reason, like analysis also comes into play when looking behind the figures, and the right-leaning, Illinois Policy Institute, took a stance from their governor, Bruce Rauner, and remarked, “This has resulted from policymakers’ yearslong neglect of Illinois’ economy. Illinois’ political leadership has ignored opportunities to encourage economic growth while enacting taxes and regulations that have stunted job creation. These anti-job policy decisions have helped create a situation where Illinois’ most economically vulnerable residents are the least well-off of any state considered by EPI’s study, which focuses on the half of U.S. states with larger black populations.”
It should also be noted that IPI received a sizeable donation from Rauner, before his election, which throws their reasoning into question.
The dwindling manufacturing and industrial base, long the bulwark of unskilled labor for African-American men, plays a role, as does racial segregation in the state’s schools, and the ever growing politicization in Chicago Public Schools that has seen an unequal funding formula that is based on real estate values, and a recalcitrant Rauner, who sees current efforts at balancing the education budget, at helping their unfunded pension, which is at $130 billion, and growing.
“Illinois has the nation’s largest funding gap between high-poverty and low-poverty districts, with the highest poverty districts in the state receiving nearly 20 percent less funding than districts with the lowest poverty levels.”
With a student population that has a majority that is nearly evenly divided between black and brown students, political will comes into play, and in turn, lack of that will reduces social capital for Illinois blacks, and helps maintain that high unemployment figure.
“A study by the University of Illinois at Chicago’s Great Cities Institute in January found that joblessness among young black men in the city of Chicago was alarmingly high—with unemployment among black 20- to 24-year-olds at 60.2 percent in 2015. That report found that the decline in available jobs was directly tied to the decline of manufacturing in Chicago and “the emptying out of jobs from neighborhoods,” a contrast from the professional level services” downtown, said Chicagoist.com.
Overall for 2017, June figures showed the overall figure of 8,600 jobs added, in Illinois, with an addition of 900 manufacturing jobs added, with increases in professional and business services, and leisure and hospitality.
Local PBS Station WTTW earlier noted that “In Illinois, the white-black unemployment gap is especially wide. While nationally, African-Americans are unemployed at 2.1 times the rate of their white counterparts, blacks in Illinois are unemployed at a rate nearly three times higher than whites.”
“When unemployment decreases at a national level, we have to break it down by race,” said Janelle Jones, author of the report. “Saying simply that unemployment is down is really leaving behind entire communities who have barely recovered since the Great Recession.”
“When unemployment decreases at a national level, we have to break it down by race,” said Janelle Jones, author of the report. “Saying simply that unemployment is down is really leaving behind entire communities who have barely recovered since the Great Recession.”
Some solutions for the corresponding rate of poverty are to increase the minimum wage -- also a national debate - but one that is fraught with political assault and those who oppose it say, like Michael Lucci, vice president of IPI argues that the increase can only further damage prospects for African American employment
He said, “These laws effectively ban job opportunities that might otherwise employ young black men and women in the Chicago area,” and. “The first solution is to stop digging a deeper hole with minimum wage hikes and roll back the misguided minimum wage hikes in Chicago and Cook County.”
On the opposite side of the argument is Jones who says, “that African-American workers have been largely impacted by jobs in the manufacturing and construction sector which have failed to return to pre-recession levels. She also points to another EPI report that finds “no significant evidence that job losses in the post-2007 period were driven by federal minimum wage increases.” Institutions with better wages, and more worker protections and unions, Jones says, prove to be more stable for African-Americans.”
Paying lower wages to increase employment is an issue for Jones, who remarked, “If the only way we can employ African-Americans is through low-wage jobs, that is a problem,” she said. “We can either design an economy that only employs minorities at low wages, or we can design an economy that raises the floor and let’s everyone have some bargaining power and a living wage.”
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