Economic Gap Widens for Blacks

Your Take: A recent report calls on policymakers to address racial inequality in jobs and income.

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The economic recovery following the worst recession since the Great Depression is quickly approaching its third anniversary in June. Many people probably don't feel up to celebrating as they struggle to find good jobs and pay their bills while continuing to feel the economic pain left over from the Great Recession.

This is especially true for communities of color, as we document with our colleague, Jane Farrell, in a recent report released by the Center for American Progress. Our research shows that communities of color generally enjoy less economic security than whites, often substantially so, and in some instances, the gap in economic security by race and ethnicity has widened during the recession and the subsequent recovery. This is particularly the case for African Americans.

The economic security of communities of color lags behind that of whites in large part because they have less access to good jobs. The portion of all communities of color without employer-provided health insurance, for instance, tends to be greater than that of whites, even though some communities of color -- Latinos and Asians -- have similar employment opportunities as whites. The share of African Americans without health insurance in 2010, the last year for which data are available, was 20.8 percent, and the respective share for Latinos was 30.7 percent during the same time. This compares to 18.1 percent of Asians and 11.7 percent of whites without health insurance in 2010. Having a job is clearly not enough to enjoy the same economic security as whites, although it is a good start.

This gap in access to good jobs is even clearer when we look at what communities of color are earning, compared to their white counterparts. As of the fourth quarter of 2011, median weekly earnings for African Americans were $617 (in constant 2011 dollars) and Latinos earned $549. In comparison, whites earned $774.

There has also been a rapid rise in the number of African Americans and Latinos who are working at or below the federal minimum wage. From 2009 to 2011, a full two years into the recovery, the number of African Americans earning minimum wage increased by 16.6 percent and Latino minimum-wage workers increased by 15.8 percent, while whites only increased by 5.2 percent.

The data show that in some instances, the gap in economic security widened during and after the Great Recession, especially for African Americans. Economic security for most groups started to improve after 2009, while it stayed low for African Americans in 2010 and 2011. The unemployment rate, for example, was lower at the end of 2011 than at the end of the recession in June 2009 for all groups, except for African Americans.

The African-American unemployment rate at the end of 2011 was 15.5 percent and thus higher than the 14.9 percent black unemployment rate at the end of the recession in June 2009. Unemployment rates have fallen for all groups in 2012, but African Americans have years of catching up to do and still have unemployment rates that are twice as high (13.9 percent) as those of whites, who had an unemployment rate of 7.3 percent in the first quarter of 2012.

Our general conclusions from the data do not uncover anything new. Communities of color have experienced persistently and substantially less economic security than whites for decades. And, historical experience also shows that recessions typically prove worse for communities of color than for whites. Unemployment rates rise faster and further and stay higher longer for communities of color than for whites.

Furthermore, African Americans already did not benefit as much as other groups did from the economic growth of the last economic recovery from 2001 to 2007. That is, African Americans were already economically more vulnerable than other groups before the Great Recession started at the end of 2007. The data only show that racial and ethnic inequities got substantially worse than in the past few years due to the severity of the recent economic crisis.

Communities of color can ill afford for policymakers to dither again on identifying and implementing targeted policies that will start to shrink the existing racial and ethnic inequities. Accelerating the still rather anemic job creation is obviously a top priority to create more economic security for all households.

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