The surge in labor market demand resulting from the pandemic has led to one of the fastest job recoveries ever, bringing the national unemployment rate down to historic lows and benefiting millions of Black workers who lost their jobs and quickly finding new ones.
It is uncertain if these gains will be permanent, as economists expect a recession later this year. Black workers suffer disproportionately during recessions and recessions because a greater proportion of them work in lower-wage industries that are more prone to layoffs.
“This has to do with a tight labor market,” said Daniel Gao, chief economist at Glassdoor. “Employers have been more aggressive in finding workers which has benefited black workers in particular. But if the economy slows, you may see a weakening of the labor market for black workers.”
Economists say the black unemployment rate in the United States tends to be twice that of whites because of systemic racism and other broad structural forces, such as differences in access to education.
The unemployment rate is even lower than in years when then-President Trump often takes credit for the black unemployment rate that hit a record low during his tenure, according to Bureau of Labor Statistics data going back to 1972.
The record low black unemployment rate is a win for the Federal Reserve, which has been accused of widening economic inequality. Through a years-long policy of low interest rates that helps more workers get and keep jobs, these policies also boost the wealth of people who have investments or want to buy homes, which can outpace Americans of color.
Fed officials have argued that a tight labor market is key to reaching out to groups that have historically been left on the economic margins.
The pandemic has led to a sharp rise in Black, Asian, and Latino homeownership
Federal Reserve Chairman Jerome H. Powell often says his goal is to work toward a job market that lifts everyone up.
“I’m going back to the job market we had in 2018. ’19, ’20” Powell He said At a press conference in December. “What that looked like was that the wage increases for people at the bottom end of the income spectrum were the largest. The gaps between racial groups and gender were at their smallest levels in recorded history… So this seems like something that would be really good for the economy and the country, if we could get back till then. “
Rachel Siegel contributed to this report.
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