Young, Black, Gifted and Underemployed

When it comes to jobs, income and acquiring wealth, race still matters more than education.

Graduates of Hampton University (Jim Watson/AFP/Getty Images)
Graduates of Hampton University (Jim Watson/AFP/Getty Images)

(The Root) — President Ronald Reagan’s 1984 re-election campaign is notably remembered for a political television commercial with the opening line, “It’s morning again in America.” The optimism expressed in the narration suggested that improvements to the U.S. economy since the recession of the late 1970s were due to Reagan’s policies. It was a winning message. But the ad featured all-white faces and excluded African Americans and every other racial minority.

The more things change, the more they stay the same.

The Great Recession of 2007 has been compared to America’s economic woes under President Jimmy Carter. This card was mostly played by Republicans during the 2012 election; they hoped that the stain of Carter’s one-term presidency might spell doom for Barack Obama by Democratic association. That didn’t work.

What wasn’t discussed was the plight of American workers during the recession years of Reagan’s first term, which saw lifetime wage declines and long-term wealth gaps, and no full recovery from extended periods of unemployment and underemployment. History is now repeating itself, with the worst disparities affecting young black and brown people.

Research based on data from the Bureau of Labor Statistics shows that 15.9 percent of Americans were “underemployed” in 2011. This includes the long-term unemployed, discouraged workers who have abandoned looking for work altogether and part-time workers who can’t secure enough hours to sustain a living wage.

For young people — with high school diplomas and four-year college degrees — the landscape is even worse. The underemployment rate for 18- to 24-year-olds was 28.6 percent in 2011, compared with 16.6 percent for 25- to 34-year-olds and 12.8 percent for adults over the age of 35. Disparities based on race were staggering: 42.6 of African Americans under 25 were underemployed, and 32.6 of Hispanics. Only 24.5 percent of young whites were underemployed.

President Obama’s recent commencement address at Morehouse College alluded to difficulties faced by young black males entering a fragile labor market, and the underlying statistical data are undeniable — showing that young people who pursue a college education may be at a disadvantage over the long term because student-loan debt is crippling the millennial generation.

Despite a steady economic recovery, most private-sector jobs created have been for low-skilled service-sector work. American industry is competing with the BRIC countries (Brazil, Russia, India and China), while U.S. corporations continue to move jobs offshore. Generations X and Y (those under 40) in this country are outmatched by advanced technologies that rely on fewer workers, and these young people must compete with citizens of developing economies, who work longer hours for less pay.

Lisa Kahn, a labor economist at Yale University, studied the earnings of men who graduated from college during the deep recession of the early 1980s and found that the higher the unemployment rate was at the time they graduated, the less they earned. And those workers never caught up. “The effects were still present 15 or 20 years later,” she said. “They never made that money back.” Kahn posits that the same is happening today.

Darrick Hamilton suggests that “occupational segregation” plays a large role in the wage gap. “Nearly 90 percent of U.S. occupations can be categorized as racially segregated,” said Hamilton, co-author of an Economic Policy Institute paper called “Whiter Jobs, Higher Wages.” The study showed that in jobs in which black men were underrepresented, the average salary was $50,533 annually, but in occupations in which black males were overrepresented, the salary was $37,005. Controlling for education and skills, the racial discrepancy persists.