The Jobs Are Coming Back—But Are They Black?

January’s employment numbers are encouraging—and the White House hopes new support for small business will turn the tide.

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The employment statistics for January are out—and the jobless rate for America now sits at 9.7 percent. While the country lost 20,000 jobs last month, this figure is a slight improvement over December’s rate of 10 percent, and a five month low. The United States gross domestic product grew by a healthy 5.7 percent in the last quarter of 2009, and in some sectors—manufacturing, part-time health work, and the automobile industry, for example—there are signs that recovery is happening. In addition, the number of involuntary part-time workers (who had been working fewer hours because of job scarcity) dropped by roughly 850,000, suggesting that employers are converting part-time employees back to full-time jobs.


The unemployment rate is still differentiated by gender and race: Joblessness among women decreased to 8.4 percent, while for men it dropped by a smaller amount, to 10.8 percent. But the news for black America is not so encouraging: While the overall rate of unemployment dropped slightly, the unemployment rate for African-Americans rose to 16.5 percent, and for black men rose a full percentage point to 17.6 percent—a high for the ongoing recession.

Christina Romer, chair of the president’s Council of Economic Advisers, doesn’t have a clear reason for why this is happening to black America. “In terms of what in particular is driving that, we don’t yet have the answers on that,” she said, while briefing reporters on the new numbers. “There is of course…what economists would call ‘noise,’” she continued, suggesting that month-to-month movement in the jobless rate does not yet constitute a pattern.

But since the beginning of the recession in late 2008, African-American job losses have steadily ticked up—and been consistently four to five percentage points higher than the nation at large. The president acknowledged the mixed news at an event promoting small business recovery in Maryland. “These numbers, while positive, are a cause for hope but not celebration, because far too many of our neighbors and friends and family are still out of work,” he said.

Long-term trends in employment are still uncertain: Other metrics in the January Bureau of Labor Statistics report indicate that productivity has increased in the last half of 2009—meaning that even after the recession, fewer workers may be necessary to perform the same amount of work. Romer added that the administration will seek to solve the problem soon: “The fact that it’s more for African-Americans emphasizes that it’s important to try targeted actions to deal with this.”

The administration, which has shifted its focus to job creation in the first weeks of 2010, is promoting a number of immediate steps to open up credit to employers and speed hiring. Romer touted the president’s economic policies in 2009—the financial rescue plan, loan modification for housing, and the Recovery Act—for stopping major bleeding.

The Recovery Act in particular focused on supporting energy efficiency retrofits, infrastructure investment, and essential government services like police and civil workers. “All of those have been essential to that change in trajectory,” she said. But new initiatives involving tax credits, loan guarantees, and other incentives to raise wages, will help the restaurants, repair shops, contractors and startups that, with other small businesses, employ up to half of private sector employees. Under the terms of the White House proposal, employers with less than 500 workers will receive a $5,000 tax credit for every new worker hired this year—and be exempted from capital gains taxes in 2010. A proposed tax on large financial institutions will fund the creation of a $30 billion small business lending pool. The limit on “Express” loans from the federal Small Business Administration will temporarily increase to $1 million.

Small businesses, which also suffered the worst of the real estate market collapse, will be assisted in refinancing mortgages and staving off foreclosure. And the health-care reform legislation that has passed both houses of Congress also seeks to reduce the burden on small businesses paying for employee coverage. “In context, this is really part of an integrated package of programs and proposals that were announced over the last week to create a small business jobs agenda,” said SBA administrator Karen Mills.

But many of these provisions, particularly the $30 billion fund for lending, will require Congressional action. “The president wants legislation on his desk as soon as possible,” added Romer. Rep. Barbara Lee of California, Democratic chairwoman of the Congressional Black Caucus, concurred. “There remains an urgent need to create jobs and stimulate the economy for the unemployed,” she said after the employment statistics were released. “It is also imperative that those efforts target communities with the highest rates of chronic unemployment.”

The CBC has already negotiated provisions in the $154 billion jobs bill that passed the House of Representatives in December that will assist neighborhoods and cities where 20 percent of the population is living below the poverty line. While this additional $6 billion might be included in a final bill, the Senate, which will take up the same agenda this week, has made no indication that they will focus on hard-hit communities of color. Nevertheless, the White House is pushing for these fixes where it can. “We know that there are limits to what government can do to create jobs,” said Obama. “What government can do is fuel that engine by giving entrepreneurs and companies the support to open their doors and to expand and to hire more workers. That's exactly what this administration intends to do.”


Dayo Olopade is Washington Reporter for The Root. Follow her on Twitter.

Covers the White House and Washington for The Root. Follow her on Twitter.